Select Committee on Work and Pensions Written Evidence

Supplementary memorandum submitted by the Disability Rights Commission after the publication of the Welfare Reform Green Paper

  1.  In this submission we outline our initial reaction to the Green Paper "A new deal for welfare: empowering people to work" and clarify points from our evidence session before the committee on 13 February 2006 (see paras 5, 14, 19 of this submission).


  2.  The Disability Rights Commission (DRC) supports the overall direction of the Green Paper in emphasising employment opportunities for disabled people. Positive and constructive welfare reform has a significant role in facilitating disabled people's participation. Given our concerns about the culture of low expectations we believe that policy which is based on the best available evidence is an important tool in promoting such culture change.[78]

  3.  Since our original submission to the Select Committee we have refined our citizenship approach into three key principles, which we take in turn below.[79] Considerations of disability equality and human rights are relevant to all three. Our response to the consultation will evaluate how far the Green Paper meets our citizenship principles.


The role of employers

  4.  The Green Paper, and the occupational health strategy published by the government last October, include some measures—such as Statutory Sick Pay (SSP) reform—that may help to avoid people claiming Incapacity Benefit (IB) when, with the right adjustments, they could have stayed in employment. The DRC's research with the Health and Safety Executive, and Disability Discrimination Act (DDA) case law, shows that an overcautious approach to risk by occupational health services can result in disabled people losing their job or failing to secure one, particularly where mental health issues are concerned.[80] We will be making further proposals to government about employers' role in recruitment and retention including reforming SSP to introduce a more managed process consistent with DDA best practice. We also welcome wider access to services such as Condition Management Programmes including from people receiving SSP, which we had also recommended.

  5.  In our evidence session several employment issues were mentioned, and summaries of DRC research are attached.[81] The pre-DDA quota system required private companies with more than 20 employees to employ at least 3% of its workforce from the disabled person's register. It was rarely enforced (only 10 prosecutions in 50 years), employers ignored it and few disabled people registered.[82] Access to Work can enable people with support needs to retain employment, though there is apparently no information about its take up in the Pathways pilots.[83] Its budget was almost £59 million in 2004-05, increasing from £24.4 million in 1999-2000; on average, Access to Work breaks even if the job duration is less than a year.[84]


Reforms to incapacity benefits

  6.  We were pleased that some of the suggestions floated in the press (such as means-testing, time limits, mandatory job search) do not appear to be included (though not explicitly ruled out). Key aspects of the structure and conditions of the Employment and Support Allowance (ESA) only appear in broad outline, so the precise implications are unclear.

Benefit rules

  7.  We were pleased that the DRC will have a role in advising on the new assessment processes, and we will consider this further during the consultation period. However, the Green Paper is unclear about the relationship between:

    (a)  assessment for eligibility for benefit (the Personal Capability Assessment: PCA); and

    (b)  assessment of capacity to undertake work-related activity, which may be similar to the Capability Report, which has had a mixed response in Pathways pilot areas;[85], together with

    (c)  the underlying basis for the ESA, which has to move beyond incapacity for work.

  8.  People can be placed in a contradictory position under current incapacity rules so it is unclear how the ESA will address this. Distinguishing between what is allowed and required:[86]

    —    Currently people can risk losing benefit when undertaking work-related activities, so the activities listed on page 43 of the Green Paper need to be allowed under ESA rules. Existing "permitted work" rules and linking rules also need to be adapted for consistency with ESA eligibility. Current disincentives (eg the number of hours worked by people with learning difficulties)[87] need to be addressed as they can in effect deny people the chance to participate, which may be contrary to human rights obligations.[88]

    —    Any activities that are required (ie mandatory) need to meet key conditions such as high quality adviser support and effectiveness.[89] On the basis of current evaluation evidence, DRC supports the current package of rights and responsibilities in Pathways as representing a reasonable balance of conditions with safeguards (including pre-interview contact) and access to support. Any extended conditions should be similarly balanced. Inappropriate exposure to sanction would also raise human rights concerns.

  9.  The PCA exemptions will be replaced by a new category of "reserved circumstances" based on the severity of the impact of someone's condition on their ability to function. Whilst this group will not be required to undertake work-related activities the Green Paper is silent as to what kinds of activities will be allowed:

    —    Will the benefit rules allow them, and existing incapacity benefits recipients, to participate in a wide range of activities like volunteering, part time and public appointments without facing financial penalty?

    —    How easy will it be to move between categories if appropriate?

  10.  A more rigorous approach is proposed for existing claimants based on increasing the frequency of work focussed interviews over time, regular PCAs and ad hoc case checks. The latter needs to avoid the problems of the Benefit Integrity Project and to balance correctness of benefit entitlement with the need for sensitivity in review procedures.

  11.  An integrated contributory and means tested benefit structure also raises questions, such as:

    —    How many recipients are likely to be means-tested, and what are their likely characteristics? (for example under 25 year olds have a lower personal allowance under Income Support than other adults but have the same basic rate as older adults for contributory IB).

    —    How will the different combinations relate to the categories of "reserved circumstances" receiving the additional support payment, and other ESA recipients receiving work-related premiums? Assuming each of these could receive either (a) means tested and contributory payments; (b) only contributory (c) only means-tested payments, this suggests six different combinations, rising to seven or eight when existing claimants (including former invalidity benefit recipients) are included. This presents a challenge to the longer term vision of a simpler system.

    —    What are the implications of absorbing the disability premium into the new ESA structure for:

    —  recipients of means-tested benefits who receive the premium on grounds that are not currently related to incapacity (such as receipt of DLA or registered blind);

    —  other benefits like Housing Benefit;

    —  recipients of other means-tested benefits such as lone parents, carers and unemployed people not on incapacity related benefits; and

    —  learnings disregards and other rules associated with receipt of the disability premium.

  12.  Around four in 10 current recipients have mental or behavioural conditions so the ESA needs to be designed around their needs. DWP research shows that only 37% of employers said they would in future recruit people with mental illness.[90]


Pathways roll out

  13.  Given the success of the current package, the DRC was pleased with the commitment to roll out Pathways nationwide. On the basis of current evidence, we believe that this suggests it is the package as a whole which has driven this success; for example mandatory work-focused interviews make a difference (in engaging staff and recipients) but Pathways seems to deliver a better work focus than in other integrated Jobcentre Plus districts.[91]

  14.  The government announced that £360 million would be available to extend a Pathways approach nationally. However there are different estimates of how much national roll out of the existing package might cost; one estimate is £500 million, or £167 million a year.[92] In our evidence session we may have given the impression of another figure—£1 billion; this looks high, assuming that coverage of a third of the country—already allocated—could cost in the region of £125 million by 2007-08.[93] So for example if national roll out was likely to cost £500 million, some £125 million could be deducted from that figure to account for spending already allocated. Given the different estimates a breakdown of current and projected costs by the government would greatly aid clarity on this matter. If the existing package was changed, the cost of national rollout would of course also be affected.

  15.  Whatever the precise costing, if benefit off-flows at the six month stage are running at around eight percentage points and this is twice as high as initial expectations, we would expect that the estimated costs of Pathways would be less than originally envisaged. Provided the employment rates hold up, upfront investment could result in savings in the longer term from reduced benefit payments and increased revenue from income tax and national insurance.

The role of the private and voluntary sectors

  16.  The impact of using private and voluntary sector providers to deliver Pathways in new areas without having to replicate existing provision will need to be closely evaluated as support may vary by locality, provider or individual adviser. Identifying the impact on employment rates by different impairment groups will be important. For example if contracts are based on outcomes, safeguards will be needed to ensure that providers do not have incentives to focus on those perceived to be closer to the labour market to the detriment of others with more complex barriers or potentially higher support needs.

  17.  The disability equality duty could ensure that the extended role of the private and voluntary sectors as envisaged in the Green Paper drives up the quality of provision. The DRC is proposing approaches to commissioning and monitoring of contracts that promote disability equality, transparency, accountability and positive outcomes.

Jobcentre Plus and resources

  18.  The Green Paper sets out some challenging roles for Jobcentre Plus in the context of efficiency savings, though as we noted in our earlier submission, IB reforms were intended to benefit from savings elsewhere (para 40). It is unclear whether this would apply to Pathways roll out between now and 2008.

  19.  In our oral evidence session on 13 February we also referred to concerns about Jobcentre Plus practice in relation to the DDA. We would like to set the record straight by clarifying that there is very little evidence of concerns relating to Personal advisers in Pathways areas. A number of callers to the DRC's Helpline concern communications in inaccessible materials, procedures for benefit claims, and employment practice in DWP agencies.[94] From an examination of 84 calls between July 2004 and December 2005, only six appear to have originated from live Pathways localities and none appear to relate to Personal Adviser practice; two concerned employment practice in DWP agencies, two were non-disability related benefit queries, one concerned assistance with form filling and one regarding disallowance of IB.

  20.  Nonetheless we hope that the concerns as raised by callers and in our earlier submission (eg regarding communications with customers) will be addressed by Jobcentre Plus in the run up to publishing its Disability Equality Scheme by December 2006.[95]

  21.  We have offered to work with DWP to undertake a prototype disability equality impact assessment on the proposals contained within the Green Paper to enable the department to have a fuller understanding of the implications of proposals prior to implementation, and to provide a foundation upon which to build DWP's disability equality strategy.

78   As in the case of back pain management: see Waddell G and Aylward, M, 2005, "The Scientific and Conceptual Basis of Incapacity Benefits", TSO. Back

79   DRC, "Welfare Reform Policy Paper, January 2006". Back

80   See DRC response to the Social Exclusion Unit inquiry on Mental Health 2004. Back

81   ORB and Mori research. Back

82   See eg Oliver M and Barnes, C, 1998, "Disabled People and Social Policy: From Exclusion to Inclusion", Longman. Back

83   Thornton P and Corden A, 2002, "Evaluating Access to Work: A case study approach", DWP research WAE 138; HC Hansard 12 September 2005 col 2501w. Back

84   HC Hansard 19 July 2005 col 1628w; National Audit Office, 2005, "Getting and retaining a job: the Department for Work and Pensions' support for disabled people", HC 455 session 2005-06. Back

85   The Capability Report was intended to be available by the second work focussed interview but the response has been mixed, sometimes arriving too late or its content adding little to what was already known to the adviser at that stage: Knight et al, 2005, "Incapacity Benefit reforms-the Personal Adviser Role and practices: Stage Two", DWP research report 278. Back

86   DRC, 2005, "Shaping the IB Reforms Green Paper-Preliminary response from the Disability Rights Commission". Back

87   Beyer S et al, 2004, "Working lives: the role of Day Centres in supporting people with learning disabilities into employment", DWP research report 203. Back

88   See para 5 of our earlier submission. Back

89   "Conditions for conditionality", DRC briefing paper September 2004. Back

90   Bunt K et al, 2001, "Recruiting benefit claimants: A survey of employers in ONE pilot areas", DWP research report no 139. Back

91   See Blyth, B, 2006, "Incapacity Benefit reforms: Pathways to work pilots performance and analysis", DWP working paper no 26; Waddell G and Aylward, M, 2005, "The Scientific and Conceptual Basis of Incapacity Benefits", TSO. Back

92   DWP, 2005, "Opportunity for All, Seventh Annual Report 2005", Cm 6673; Stanley K with Maxwell, D, 2004, "Fit for Purpose: the reform of incapacity benefit", ippr. Back

93   Budget 2005, page 188. Back

94   Half a million calls were made to the Helpline in the first five years: Back

95   DRC, "The Duty to Promote Disability Equality: Statutory Code of Practice, England and Wales". Back

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