(This is the text of a speech by Mark Baker of Royal National Institute for Deaf people that he gave to the recent PCS conference in Brighton. He was asked to give the speech as Chair of the Policy Group of the Disability Benefits Consortium. The speech, therefore, was an expression of the consortium's views, rather than RNID's. (ed.))
First of all, let me thank you for the opportunity to talk to you today, and give you a perspective on welfare reform from the viewpoint of the claimant.
If I can just introduce myself – I’ve been working in the disability sector since 1997, and currently chair the policy group of the Disability Benefits Consortium. The DBC consists of over 25 national organisations that represent the needs of people why rely on disability benefits, providing an information-sharing resource as well as a campaigning function. It is this latter capacity that we have been involved in the ongoing programme of welfare reform over the past four years or so, lobbying ministers and meeting with civil servants.
When I first came to Cardiff in the dying years of the Thatcher regime, it was, I have to say, a city showing signs of neglect, with a future based more on hope than expectation. Twenty years on, and the transformation is remarkable – Cardiff has become a modern European capital city with a future to look forward to. But the success of Cardiff must not be allowed to mask the deep scars that remain in many parts of South Wales, scars left by deindustrialization that mark not only the landscape, but the communities and the people that live in them. The policies of successive governments have neglected too many people, leaving them to lives of poverty and exclusion, meaning that pockets of South Wales have some of the highest rates of Incapacity benefit claimants in the UK.
The aims of the ongoing process of welfare reform, we are told, is to give people the opportunity and the practical tools to lift themselves out of poverty and into paid work; And I expect that we’ll hear a lot about the theoretical debate behind welfare reform today – the ideological and scientific approaches and the vision of a flexible, engaging and unified welfare system. I’m here to look at the practical side of the equation, and show the gulf that is emerging between theory and practice – a gulf that too many of the people I represent may fall into.
I’m sure we all recall the clarion cry at the heart of reform - the oft-repeated promise to ‘get one million people off Incapacity Benefit and into work’.
This would be achieved by striking a new balance between rights and responsibilities – a ‘something for something’ culture wherein those who wish to claim from the state have to fulfil a series of duties not incumbent upon others. These include, for most claimants, engaging in work-related activity in the understanding that failure to do may result in the application of (I believe unnecessary) sanctions and a reduction in benefit. In exchange for this, the government is has promised better support, both financially and in terms of help in getting back to work. These, then, are the government’s conditions for conditionality – the carrot by which they justify the stick. We give you more, but we shall expect more from you in return. This, then, is the new politics of disability
Being immersed in the detail of this complex reform over such a period of time can make it difficult to select areas of particular concern, but with so much of the programme already in place, waiting to be launched onto a largely unsuspecting public, I’d like to concentrate on three issues that will affect not merely those people who will be likely to claim Employment and Support Allowance, but also those who are in contact with them, including JCP staff.
The issues are:
The Work Capability Assessment and its effects.
The rates at which ESA will be paid.
Employment services and long-term claimants.
The Work Capability Assessment
The Work Capability Assessment (or WCA) is the name of the new gateway for ESA, and its introduction will have major ramifications for new and current claimants alike. It’s predecessor, the Personal Capability Assessment was widely rated as being one of the most stringent gateways to disability benefits in Western Europe. Well, it just got tougher.
There are welcome improvements. The greater understanding of the barriers faced by people with mental illness. learning difficulties and Autistic Spectrum Disorder is a step forward, as is the combination of mental and physical disabilities. However, pilot studies undertaken by the DWP have shown that there will be a significant disallowance rate – one in eight of those who would have received IB will not receive ESA.
What does this mean? Well, for one thing, it means that the Government’s target of getting one million people off Incapacity Benefit is starting to look a lot easier.
The most obvious ramification is that there will be people with long-term health conditions and disabilities who will be denied access to ESA. The Government believes that there will be 60,000 more failed applications for ESA per annum than there are for IB. That’s up to 60,000 people every year who will have to claim JSA or Income Support instead.
A further issue concerns those people who are currently claiming IB, but who will either be migrated across to ESA in time, or will be subjected to the new WCA as the gateway to their current benefit. It can be assumed that the 12 per cent disallowance rate can be applied to these people, too. Currently, we have over 2.7 million people claiming incapacity benefits – and crudely, 12 per cent of 2.7 million is 324,000. If the WCA were applied immediately to the current Incapacity Benefit caseload, the government would already be more than halfway to its target.
This does rather suggest that there is a policy gulf between getting a million people off IB and getting them into work.
Now, what happens to those people who had been claiming IB, but are found to be ineligible for ESA? The answer, effectively given by Lord McKenzie of Luton in answer to a question by Baroness Greengross last week is ‘nothing’ – they can apply for JSA and Income Support, and can access such support as these benefits provide. According to the Secretary of State James Purnell, these people are now ‘not disabled’ and therefore do not require specialist help. These people, who had been found to be disabled have been magically recategorized as ‘able bodied’, merely by the application of the new assessment.
So, for these people, many of whom will have been out of work for some time, having been on long-term IB with no support in finding work, life will change a great deal. They will have to engage with the harsher regime of life on JSA, but they will not be eligible to receive the support that ESA had appeared to promise. There will be no tailored interventions, no condition management and no return-to-work payments for these people – and given the success rates of JSA, particularly with people aged over 40 with a poor health record, there will be little chance of finding work.
Furthermore, these people will be poorer. And as the first group earmarked for migration is younger people, this may well mean the further impoverishment of young families. For some people, the reality of welfare reform appears to differ markedly from its promise.
The rates at which ESA will be paid.
What about those who are deemed eligible for Employment and Support Allowance?
First of all, they will have to go through a thirteen week assessment phase, wherein they will receive a rate equivalent to that of Job Seekers Allowance. At the end of this period, successful claimants will not have their benefit backdated to the start of the claim, irrespective of how obvious their need might be.
The majority of successful claimants will be placed on the element of ESA that sees the claimant having to fulfil certain conditions – for today’s purposes, I shall refer to it as the ‘conditional’ group – these people will have to engage in work-related activity in order to continue to receive their benefit. A smaller minority of people with more complex barriers will be placed in the ‘support’ category – it having been recognised that they cannot reasonably be expected to engage with the world of work. How will these two groups of people fare under the new system?
In a letter to the 100 MPs with the highest number of Incapacity Benefit claimants on the 3rd of January 2006, then Secretary of State John Hutton promised reform that would “give genuine protection to those who truly cannot work”, and stated that we should not accept “a system that perpetuates hardship”. In the foreword to the Green Paper , he further stated that the welfare state must “focus its energy on tackling poverty and social exclusion”.
As well as these, repeated assurances were given by Ministers on the floors of both Houses that the main phase rate of ESA for those in the conditional group would be “paid above the present long-term IB rate”.
How do these promises measure up?
When the benefit rates were announced in March of this year, they were identical to the recently uprated long-term rates of Incapacity Benefit. The argument for this apparent volte-face being that the statements made were correct, in that the current ESA rates are higher than the rate of IB was at the time. However, we believe that whilst this may be technically correct, the fact that the basic rate of ESA will be paid at the same rate as the long-term rate of Incapacity Benefit currently undermines the argument that claimants will be getting ‘something for something’.
There are other discrepancies, too.
Calculations made by Disability Alliance show that whilst the introduction of ESA may benefit many people financially in the short term, their long-term prospects are bleaker. In fact, only single people in the support group will be better-off in the long-term – and some of those will actually be worse off in the short-term. Everyone else loses, relative to IB, over time. I shan’t explore the labyrinthine details, but these are the general facts.
For most single people in the work-related activity group, after the first year, their income will be £1.85 per week lower than it would have been on IB.
For many couples in the work-related activity group, after the first year, their income will be £12.85 per week lower than it would have been on IB.
For many couples in the support group their income will be £7.85 per week lower than it would have been on IB, for the entire duration of their claim. It’s also worth pointing out that this includes couples who are claiming on the grounds of terminal illness.
I think it’s time that these discrepancies were addressed and remedied. It seems strange that it should be couples who miss out the most – at a time when the government admits that it is failing to meet its challenging and laudable child poverty targets, that the welfare system seems to be driving some of the poorest families deeper into poverty.
Employment training and provision
It’s not my role here to debate the political ins and outs of contracting out the provision of employment support for disabled people. My personal view is that in nearly all cases, excepting only those where highly specialist provision is required, Job Centre Plus does as good, if not better a job than any generalist employment provider could hope to.
However, we are already seeing problems with the way that Pathways to Work is being rolled out across the country, in the way that contracts are written and subcontracts decided. Yes, Pathways has some excellent elements – return to work credit, condition management, tailored action plans, and we are seeing a more flexible attitude being adopted towards permitted work. All of these are good. However, none of them require the intervention of the private sector to make them work.
What concerns me more, though, is the ways in which placing support in the hands of the market will impact upon those people who face the greatest barriers to return to work. The impact, if you will, of economies of scale on the labour market.
Put simply, it does not cost the same amount to get all disabled people work-ready. People with mild musculo-skeletal conditions, or living with stress, debilitating though these conditions are, will not require as much support as, say, a profoundly deaf person who only uses British Sign Language to communicate. It can take a significant investment in terms of time and money to get a BSL-user close enough to the labour market for them to stand a realistic chance of getting a job. The same will go for blind people with no light perception, people with severe mental health disorders, acute learning difficulties or combinations of multiple conditions and barriers.
Now, put yourself in the place of the private contractor. With payment by results, and the only valid result being the numbers of people into work, where are you going to expend your resources?
The answer is obvious. You concentrate your resources on those already close to the labour market, confident that they will requite relatively little investment, and that a plentiful supply of new recruits for the new reserve army of labour is always available.
And it’s not just about cost. At RNID, we invest in getting profoundly deaf people into work, and we know better than most that you can train someone, support them, skill them, lead them to the employer’s door and ring the bell. But that doesn’t mean the door will open, or the candidate be ushered inside.
So again, it makes less sense to plunge resources into those furthest away from the labour market, as the labour market itself is least likely to engage with them. The system appears to disincentivize engaging with those people who need the most support, and instead reduces Pathways to Work to a simple unit / cost equation and the tawdry spectacle of spread-betting on the labour market.
Our fear is that the net result of this will see those people with the least chance of finding work being left on the margins of support – fulfilling their responsibilities, but without the realization of their rights. And for the majority, the longer they remain on benefits, the less money they will have compared to the IB system. It would appear as though reform will function to penalize some people on the basis that their employment service providers have failed them.
In conclusion, then, it seems to me that many of the promises that lay at the heart of the welfare reform programme have still yet to materialize. Instead of being supported off benefit and into work,
Many people will be thrown off one benefit and onto another, with little help to find work as a consequence.
Many people will actually be worse off under ESA than they would have been under the current arrangements.
Many people will not receive the support and assistance they need to gain and retain paid work.
I leave you with the question then, as to how the government’s stated aims can be met by these reforms. Whether the redrafting of the social contract between the state and the disabled individual strikes a fair balance between rights and responsibilities, or whether the government itself is failing in its own responsibilities to provide the very assistance, protection and care that it promised.