Background
4. Nearly one in five people of working age in private households
have a current long-term disability: 7.1 million people (3.7 million
men and 3.4 million women). In autumn 2001, the overall ILO unemployment
rate for disabled people was 8.3 per cent compared with 4.8 per
cent for non-disabled people. Approximately half of the disabled
population in the UK are economically inactive (44 per cent of
men and 52 per cent of women), compared with only 15 per cent
of the non-disabled population (9 per cent of men and 21 per cent
of women).[2]
5. The employment rate at Spring 2002 for disabled people is 48
per cent, compared with an overall employment rate of 74.6 per
cent. Since 1998, employment rates for disabled men and women
have increased and the gap between the overall employment rate
and that for disabled people has decreased. In the year to Spring
2002, the employment rate for disabled people increased by 0.6
percentage points and the gap between the overall employment rate
and the disabled persons rate narrowed by 0.8 percentage points
to a 26.6 percentage point difference.[3]
6. In the last twenty years, the number of people claiming incapacity-related
benefits has trebled. The Department uses the figure of 2.7 million
incapacity benefits claimants. This includes those on Incapacity
Benefit, Income Support and Severe Disablement Allowance (which
is being phased out). It also includes those who receive National
Insurance credits only. The largest group is those on Incapacity
Benefit. In November 2002, the number of Incapacity Benefit (IB)
claimants stood at 2.38 million - 1.8 per cent higher than at
the same point a year earlier, and 1.5 per cent lower than when
IB was introduced in 1995. Of these, 1.08 million - 45 per cent
of the total IB caseload - had been on benefit for five years
or more, 5 per cent more than a year earlier.[4]
The number of IB claimants now considerably dwarfs the number
of unemployed claimants, where, in contrast, numbers are falling.
In November 2002, there were 872,000 Jobseekers Allowance (JSA)
claimants, a fall of 1.09 per cent compared to 2001, whilst the
overall number who had been claiming JSA for a year or more fell
11.3 per cent over the year, to stand at 162,000.[5]
Overall expenditure on incapacity benefits is currently over £16
billion a year compared with £4 billion for the unemployed.[6]
Table 1: Caseload numbers for Incapacity Benefit, Incapacity
Benefit credits and Severe Disablement Allowance[7]
Year |
Total Caseload
|
Incapacity Benefit
|
Incapacity
Benefit Credits
|
Severe Disablement Allowance
|
1999-2000 |
2,575,000
|
1,505,000 |
740,000
|
330,000 |
2000-01 |
2,630,000
|
1,515,000 |
790,000
|
325,000 |
2001-02 |
2,645,000
|
1,505,000 |
825,000
|
315,000 |
Note:
Caseload figures rounded to the nearest 5,000
Source:
Caseload figures for 1999-2000, 2000-01, 2001-02, taken from the
respective Client Group Analysis (February quarter).
The following chart has been taken from the Department's Green
Paper:[8]
7. Geographically, the biggest concentrations of Incapacity Benefit
claimants are in former industrial areas such as South Wales,
Clydeside, Merseyside and the North East of England, where up
to a quarter of the working age male population is on incapacity-related
benefits.[9]
8. Under its 'employment opportunities for all' strategy, the
Government has set the DWP a Public Services Agreement target:
"Over the three years to 2004 to increase the employment
rates of disadvantaged areas and groups, taking account
of the economic cycle - people with disabilities, lone parents,
ethnic minorities and the over 50s, the 30 local authority districts
with the poorest initial labour market position - and reduce the
difference between their employment rates and the overall rate."
9. To date, the DWP has taken a number of steps to meet this target
and are consulting on the next stage of their strategy, as outlined
in the Pathways to Work Green Paper. Action taken so far
includes the introduction of Jobcentre Plus, with compulsory work-focussed
interviews for new and recent IB claimants; the national roll-out
of the New Deal for Disabled People (NDDP); the introduction of
WorkStep, replacing the former Supported Employment Programme;
and a range of tax credit and benefit reforms aimed at easing
the transition to work and reducing financial disincentives -
these include new 'Permitted Work' rules and the Disabled Person's
Tax Credit (soon to be replaced by the Working Tax Credit).
10. In addition, the employment provisions of the Disability Discrimination
Act (DDA) have been in force since December 1996 and are due to
be extended further in 2004. The current provisions protect disabled
employees and job applicants from unjustifiable discrimination
and require employers to make necessary reasonable adjustments
to premises or working arrangements to help people with disabilities.
The extensions to the DDA will end the small employer exemption
and the exemption of specific occupations (eg the police and prison
officers).
11. The Green Paper sets out a new strategy which will be piloted
in six areas at the end of 2003 focussing on four issues:
- Providing a better framework of support in the early stages
of a claim. This will incorporate a range of changes including:
shifting the timing of the first work-focussed interview away
from the initial point of claim; co-ordinating the interview and
the Personal Capability Assessment; increasing the frequency of
work-focussed interviews; claimants and advisers will draw up
a mandatory action plans together; and a new team of specialist
advisers will be created to work with people with disabilities.
- Providing direct access to a wider range of help to address
key health and non-health related obstacles. A 'Choices Package'
offering new referral arrangements and a simplified range of programmes
offering specialist and mainstream support will be piloted. In
addition, a new rehabilitation programme will be piloted to help
participants regain confidence to return to work.
- Improved financial incentives which enable claimants to
see that they are better off in work. A Return to Work credit
will be piloted to help those moving off an incapacity benefit
back to work. The credit will be paid through Jobcentre Plus at
£40 per week for 52 weeks where personal income in work will
be less than £15,000 a year. The Adviser Discretion Fund
will also be widened to support claimants in their return to work
activity.
- More support for people with health problems who move from
incapacity-related benefits to JSA. Those transferring from
incapacity benefits to JSA will automatically see a specialist
adviser and will draw up a Jobseeker's Agreement that reflects
residue health issues. Tailored support through the relevant New
Deal will be available without the normal waiting period.
1. Launching the Green Paper, the Secretary of State said, "No
longer must we treat people on Incapacity Benefit as if their
working life has come to an end. People on Incapacity Benefit
who want to work are faced with a system where too much seems
stacked against them...Our Green Paper is designed to end a terrible
waste of talent and experience. Most people who come on to Incapacity
Benefit have the potential to get back to work if they are given
correct and timely help...This is not about forcing sick or disabled
people into work. It is about encouraging people to look at their
options and helping those who want to work to achieve their goal
of getting a job."
2. The positive focus on tackling the barriers faced by disabled
people who want to work is very welcome. We welcome the Green
Paper and the positive tone in which it is written as a constructive
development. There are some elements of the pilots that we do
not believe need piloting and should be introduced across the
service as soon as possible. We reiterate a number of recommendations
made in the Committee's Employment Strategy report[10]
that the Government should simplify conditions of qualification
for schemes, devolve more discretion to front-line staff and to
recipients of funding, make greater use of intermediate labour
markets, tackle regional and local employment more effectively
and improve assistance for those contemplating self-employment
or starting a small business.
3. The bulk of this report takes the structure of the current
New Deal as given. However, we want to raise a prior question:
whether the design of the New Deal itself is the cause of a misallocation
of funds and an inflexible delivery system for clients. We highlight
below the fact that less than £50 million has been spent
on the New Deal for Disabled People since 1997, compared to £139
million for lone parents, nearly £500 million for those over
25 and over £1.3 billion for those under 25. Yet, there are
now far more people on incapacityrelated benefits than there
are lone parents or unemployed people claiming benefits - without
even taking into account those people who are economically inactive
and poor, but not eligible for any benefit. That pattern of resources
would be unlikely to have arisen if spending had developed in
relation to the numbers involved - in other words, if local offices
had been able to decide who to help from amongst their local population,
according to need. That pattern of resources may therefore be
the symptom of funding being allocated by central government,
and of it being parcelled up between rigidly defined programmes.
In turn, the inflexible nature of the programmes means that clients
are fitted into those programmes, rather than receiving packages
of help designed around their individual needs. We heard in Merthyr
Tydfil of the frustrating experience of advisers having to send
away IB claimants who had finally decided to seek work, but did
not qualify because they lived in the wrong ward. We invite
the Government to consider whether the driving cause of these
problems is the balkanised structure of the New Deal and, if so,
whether the different new deals, pilots and programmes should
be rationalised into a Single New Deal, with different eligibility
criteria for benefits but a single gateway for job help. This
flexibility would draw on the experience of Action Teams for Jobs,
and be aimed at all economically inactive people, whether claiming
or not.
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