Ed Holmes is a Senior Researcher at Reform.
The Queen’s speech laid out the vision of “helping working people get on, supporting aspiration, giving new opportunities to the most disadvantaged.” While there have been big steps forward in helping many groups into work over the last few decades – with lone parent benefit claims around half their peak and unemployment claims a fraction of their ’80s and ’90s level – job outcomes for people with health conditions or disabilities have been the key failure of welfare policy in recent years. When Employment and Support Allowance (ESA) was introduced, it was predicted there would be a million fewer claimants within a decade. Instead, the number has barely changed: from 2.6 million then to 2.5 million today.
In a similar way, there are hopes that Universal Credit (UC) will help move us from a situation, as Iain Duncan Smith said in a speech to Reform last year, where “too many sick and disabled people [are] languishing in a life without work, when work is actually possible for them.” While in some ways UC will improve work incentives and simplify the application process, in others it simply replicates the problems of the old system. It retains an expensive, stressful separate benefit gateway for people with disabilities. The so-called ‘Work Capability Assessment’ is about neither work, nor capability, nor is it a true assessment of anything. It has instead become an adversarial encounter where claimants are asked to prove they are ‘as sick as possible’ to claim the higher rates of ESA benefit, as well as a medical assessment bearing little relationship to identifying what can positively be done to assist them back to work.
Coupled with the weak or non-existent conditions that have to be fulfilled for continuing to receive the benefit and little access to employment support, it is not surprising that, even for claimants deemed more able to carry out activity to help them move towards work – the Work Related Activity Group (WRAG) – only 1 per cent left the benefit in the quarter to May 2015 – despite a clear majority wanting to work. Reform is clearly necessary both to ensure the welfare state remains affordable and legitimate, and to ensure people with disabilities gain from the social, health and financial advantages of work wherever possible.
The Government (though defeated in the Lords last week) has already gone some way towards reducing the financial incentives to claim one benefit over another by reducing the WRAG rate to that of Jobseeker’s Allowance. But it will have to go further to fulfil the Conservative manifesto pledge to halve the disability employment gap. Reform’s report, out today, proposes a series of radical reforms to achieve this. It proposes a single out-of-work benefit for everyone regardless of health condition. This would allow the diagnosis of a claimants’ barriers to work to take place separately from consideration of which out-of-work benefit they are eligible for. Reducing the rate to around that of Jobseeker’s Allowance would release savings which could be redeployed to provide additional support to the most severely disabled through the extra costs benefit Personal Independence Payment benefit (which is available both in- and out-of-work) and greater investment in employment support. Following the approach outlined to create a ‘smarter state’ by David Cameron last September – emphasising earlier, more comprehensive interventions – this should allow the development of effective, personalised treatment plans to address a claimant’s health problems.
Such reforms are unlikely to be without controversy. But piecemeal reforms have been tried before and found wanting. Addressing the fundamental flaws of the existing system could both tackle the scale of the challenge as well as be a lasting legacy for this Parliament.