Charlotte Pickles, Senior Research Director, Reform:
The “jobs miracle” was one of the stand out features of the last Parliament. Employment is currently at the highest rate ever recorded, inactivity has not been lower since 1990 and unemployment has not been lower since 2005. Perhaps most encouragingly, wages are also, finally, on the rise.
All this is very good news and means that the Government can focus its efforts in this Parliament on tackling the disability employment gap. On whatever measure you use, progress in this area has been woeful. A decade ago, the employment rate for people with ‘disabilities that limit their day-to-day activities’ was around 47 per cent, in 2013 it was around 49 per cent. Successive governments have likewise failed to shift the out-of-work incapacity-related benefit caseload: a decade ago it stood at just under 2.7 million people, for 2015-16 it is forecast to be just over 2.5 million. With less than 1 per cent of people flowing off Employment and Support Allowance (ESA) each month, this lack of progress doesn’t look set to change.
Thankfully, the Government sees this. In a speech on work and disability delivered to Reform last year, Secretary of State for Work and Pensions Iain Duncan Smith said “we are committed to continuing to reform the system”. A white paper on the subject is expected soon. Last week Reform published Working welfare, a blueprint for what that reform should look like.
The premise of the paper is that achieving radically different outcomes requires a radically different approach. Halving the disability employment gap means a million more disabled people in work. When John Hutton, then Secretary of State for Work and Pensions, introduced ESA he announced that he expected a million fewer claimants within a decade. He talked about removing “perverse incentives” and tackling the “passive” incapacity benefit system. This ambition has not been met – the almost three-quarters of post-assessment ESA claimants that are in the support group experience a passive system and incentives to be found as ill as possible remain.
Working welfare seeks to tackle these issues via three key recommendations:
- remove all disability premiums and move to a single out-of-work allowance, reinvesting the savings in the extra costs benefit Personal Independence Payment and better back-to-work provision;
- scrap the Work Capability Assessment (WCA) and move to a single, online Universal Credit (UC) gateway which determines benefit eligibility and, akin to the Australian Job Seeker Classification Instrument, assesses distance from the labour market. Introduce a completely separate occupational health assessment for those who need one; and
- where appropriate use this assessment to develop a co-designed rehabilitation plan, with a personal budget to facilitate its implementation and conditionality to ensure compliance with it.
Collectively these reforms would deliver a simpler, more effective system for people with health conditions. Incentives would be aligned to supporting those who can do some work to do so (rather than the binary ‘fit/not fit’ for work model we currently have), and financial support would be better targeted at those experiencing high costs due to their disability. Government has rightly been ambitious in its goal of halving the disability employment gap, their white paper must match that with an equally ambitious vision of reform.
Responding to the report:
David Martin, Director of External Affairs, Papworth Trust:
Papworth Trust has sought to refine disability benefits over the years, but we would urge caution at any calls to change the principle of a benefit paid to disabled people regardless of their employment status. It was important when personal independence payments (PIP) were introduced that it retained the principle of recognising that having a disability may bring additional costs and is paid to someone whether they are in or out of work. Under this proposal by Reform and in an era of government cuts, we fear any steps to change the principle of PIP will ultimately lead to it being cut in the future.
Papworth Trust feels that one of the biggest barriers to work for ESA claimants is the fear of the unknown. It is the fear that if they accept a job and it doesn’t work out, what will happen to their benefits and how will they live. With claimants having to wait on average 9 months for a Work Capability Assessment (WCA), this lengthy wait creates additional anxiety and uncertainty for claimants when considering their job search. We believe there should either be an automatic entry route back onto ESA for claimants who have fallen out of work within a year, or recognising that a person’s condition might have improved over that time, a fast track route to a Work Capability Assessment for previous ESA claimants.
Papworth Trust believes there are a need for early intervention such as offering a comprehensive service for young people transitioning from SEN schools and colleges. Provide career planning, Access To Work advice, supported work experience and supported internships in order to raise the aspirations and expectations of these young people and work to prevent the numbers who become ESA claimants in the following months/years. We believe that by providing early intervention, we can reduce the numbers of disabled adults who are faced with additional barriers to employment, through long-term worklessness.
Mark Deal, Director of Work, Quality & Governance, Enham
Fixing the benefits system is only part of the problem when seeking a solution to the relatively poor employment rate for disabled people, compared to non-disabled people. Employers must engage positively and proactively in supporting disabled people to fill the job vacancies they may have, including being open to utilising tried and tested methods, such as job carving and job coaching. Most employers are understandably most concerned over ensuring the vacancy they wish to fill is done so by someone who can do the job required and fits the culture of the organisation. Through employers being more aware of the support services available (and will need to be even more available in any future programme) they will be in a position to employ people who have previously been excluded from the labour market.