Hannah Titley is a Researcher at Reform.
Welfare reform was one of the big successes of the last Parliament. The Coalition’s approach was seen as radical but fair – recognising the need to overhaul a social security system that was no longer fit for purpose and increasingly lacked legitimacy in the eyes of the public. In this Parliament, the Conservative Government must now turn their attention to the big unmet challenge: the millions parked on sickness and disability benefits.
In 2008, Labour introduced Employment and Support Allowance (ESA) in an attempt to cut by a million the number of people on Incapacity Benefit (IB). Announcing the reform, John Hutton, the then Secretary of State, said: “Nine out of ten people who come on to incapacity benefit expect to get back into work, yet if you have been on incapacity benefit for more than two years, you are more likely to retire or die than ever get another job. That cannot be right.” Sadly the reform has failed to deliver. The systemic problems of IB were replicated in ESA: higher financial awards, little conditionality, and limited health and employment support. So whilst a decade ago there were around 2.5 million people on sickness benefits, today there are around 2.4 million.
By international standards, the UK does not fare well. One in 14 working age people are dependent on sickness benefits, compared to an OECD average of one in 19. This is despite a lower than average level of self-reported disability. Given the well-evidenced benefits of work, including for many sick and disabled people, the higher than average number of people claiming out-of-work sickness benefits long term is damaging for the economy and for the life chances of those individuals.
Encouragingly, the Government have already committed to halving the disability employment gap. The Conservative Manifesto stated: “we will transform policy, practice and public attitudes, so that hundreds of thousands more disabled people who can and want to be in work find employment.” Halving the gap would mean moving around one million disabled people in work – a formidable challenge, but the right one. Reform’s new report out today argues that achieving such radically different outcomes demands a radically different approach – piecemeal changes to the current system will not work.
New Reform analysis of sickness benefits over the past five years found a persistently high caseload that is increasingly young and mental health-related. In the last five years, the number of under 35s has increased by a fifth to 560,000. Despite the infancy of the benefit, a third of 16-24 year olds have already been on ESA for more than two years. Parking these claimants on long term benefits at an early age risks permanently detaching them from work, damaging their wellbeing and future prospects. Paul Litchfield, the independent reviewer of the Work Capability Assessment, has warned of a “lost generation”.
Almost 60 per cent of under 24s are claiming due to mental health problems. Across all ages almost half of the caseload is due to mental illness. This is a growing issue, and one for which the drivers are poorly understood. Unless the appalling lack of join up between health and welfare services is addressed – something the Work and Pensions Ministers at least are prioritising – this is unlikely to change. Health ministers must also show the same commitment to integrating services. Given the well evidenced benefits of work on people’s health, the prize of fewer ESA claimants is great for them too.
Radical change will take political will, but as the failed experience of ESA has shown, it is essential to delivering a step change in outcomes. With welfare reform remaining at the heart of the Government’s economic and political strategies, Iain Duncan Smith must show the same reforming zeal for tackling this as he has for delivering Universal Credit.