Select Committee on Work and Pensions Written Evidence


Memorandum submitted by SCOPE after the publication of the Welfare Reform Green Paper

INTRODUCTION

  Scope's mission is to drive the change that makes our society the first where disabled people achieve equality.

  "Independent living" is what non-disabled people take for granted: living your own life, deciding what you want to do and making it happen.

  This is not a reality for many disabled people. Instead, disablism, the presumption that disabled people are inferior, and the attitudes that sustain and underpin this presumption, deny disabled people the opportunity to show what they can contribute to society.

  Incapacity Benefit is just one factor in the right of disabled people to equality, economic security and to protection from poverty. So any lasting solution to tackling benefits must ultimately be holistic and systemic, in accordance with the "Improving the Life Chances of Disabled People" paper. Many disabling barriers that face disabled people need to be tackled to enable their economic and community participation.

  We need to move towards building a system that values the contribution that all disabled people can make, whether in work or as citizens in the community, and enables them to maximise that contribution; that fundamentally alters the balance of risk and reward that face disabled people when they decide whether to work, or how to play a role as active citizens.

  All disabled people should have adequate recompense for the extra costs of disability, without means testing and whatever the perceived level of impairment, whether or not they are in work.

  Any reform needs to be much more flexible than the existing system, which treats IB claimants as essentially similar. Equally a simplistic work/can't work division is unfair, wasteful, disempowering and demoralising to all claimants.

  Disabled people must play an active and leading role in the debate on IB reform if it is to succeed—we hope this submission both makes it clear why this is essential, and encourages this to happen.

THE GREEN PAPER

  SCOPE welcomes the Green Paper and shares the government's view that incapacity benefits are in need of reform. However, SCOPE also believes that there is room for improvement in the current proposals.

  Immediately prior to the release of the Green Paper, SCOPE published its own paper on the reform of Incapacity Benefit.221[220] During the coming weeks, SCOPE will be aiming to engage DWP and the Treasury in a constructive dialogue with a view to securing detailed changes.

WHAT'S WRONG WITH INCAPACITY BENEFIT?

The name

  "Incapacity Benefit" sends the wrong signals. It implies that the men and women who claim this benefit are "incapable" of work. For the majority, this is simply not true.

Too many people are written off

  Incapacity benefits are too often a one-way ticket. Men and women slip on to them in response to specific circumstances—illness or perhaps job loss—but they do not necessarily move off again as circumstances change for the better. Nor do they maintain any contact with the employment services, who might be able to route them towards rehabilitation, retraining or job opportunities.

IB payments are surprisingly miserly

  No-one grows rich on incapacity benefits. In fact, anyone relying on IB alone would struggle to make ends meet. The present government's aim has always been "work for those who can, security for those who can't". It is questionable whether current benefits actually deliver on the second part of this aspiration.

BUT WHAT'S STILL GOOD ABOUT IT?

For some at least, IB does provide stability and security

  Incapacity Benefit provides a stable income for large numbers of non-employed adults. For men and women who would normally have difficulty in finding suitable employment because of ill health or impairment, or because of additional factors such as age, poor qualifications or location, this aspect of IB is invaluable.

IB shelters hundreds of thousands from the worst effects of job destruction

  Incapacity claimants are disproportionately concentrated in the older industrial areas of the North, Scotland and Wales. This fundamental point tends to get overlooked. What has happened is that in areas where the local labour market is difficult, one of the main groups losing out in the competition for jobs are men and women with health problems or impairments. On incapacity benefits, most people are financially better off than on Jobseeker's Allowance.

IB can provide the vital bridge to a state pension

  For many older claimants, incapacity benefits provide the essential support between the effective end of their working lives and receipt of state pension. This group embraces many who feel that a meaningful role for them in the labour market has disappeared and for whom ill health or impairment reduce the prospect of returning.

THE INGREDIENTS FOR SUCCESSFUL REFORM

  Fair and effective reform needs to bring together three ingredients.

The first is the government's aspiration to bring IB numbers down. This is reasonable at many levels. It is in line with the aspiration of a substantial proportion of claimants to return to work. However, headline numbers should not be the sole yardstick by which reform is judged.

  The second is the need to respect the legitimate concern of claimants to avoid being victimised. In theory it is not the government's intention to hound or impoverish anyone with sickness or impairment. On the other hand, the introduction of greater conditionality is sure to arouse fears.

  The third is the local and regional dimension. The Incapacity Benefit problem and the UK regional problem are two sides of the same coin. 62 local authority districts across Britain have an IB claimant rate in excess of 10 per cent of the working age population, but not one of these districts is in the South East, Eastern or South West regions or in London. In many parts of the country there is little to be gained by pitch forking large numbers out into the labour market and expecting them to find work.

THE GOVERNMENT'S CURRENT PROPOSALS

  Several aspects of the government's proposals deserve support.

  The aspiration to reduce IB numbers by one million within 10 years is consistent with the evidence on the share of IB claimants who say they would like to work. Nevertheless, that would still leave incapacity numbers far above their 1979 level and it remains true that with the right attitude among employers and with appropriate practical help, even many of the men and women with more complex impairments are able to engage in employment.

  The intention not to extend means testing is welcome. This had been a widespread fear and we trust that the government will not now re-open this issue.

  The proposal to introduce the benefit changes gradually, via new claimants, is pragmatic. This poses no threat to the entitlements of existing claimants, some of whom have been in receipt of IB for a very long time and have adjusted their lifestyle accordingly.

  There are other parts of the package that seem sensible—the intention to complete Personal Capability Assessment within 12 weeks, for example. The real issue here is about the operational capability to deliver within this timescale.

  There are greater doubts about the division of the new Employment and Support Allowance into two. In practice it is not easy to distinguish between claimants who might be encouraged to return to work and others whose degree of ill health or impairment ought to rule this out. The results of Personal Capability Assessments are often already contested, and on appeal overturned. The introduction of a second and higher hurdle could add a further layer of dispute.

  The requirement on most new claimants to prepare for work is the most innovative part of the package. What is certainly true is that claimants will not find work unless they first look for work, and this in turn often requires rehabilitation, re-training and re-motivation of the kind now proposed by the government. The difficult issue is the extent of compulsion.

  Overall, the government's current proposals fall some way short of a wholly satisfactory package:

    —    Too much faith is placed in the ability of the labour market to absorb large numbers of incapacity claimants.

    —    No account is taken of the huge variation in conditions around the country.

    —    The assumption that Jobcentre Plus can deliver the quality and quantity of services needed to re-engage claimants is questionable.

    —    Insufficient attention is given to the obstacles in the benefits system that deter claimants from looking for work.

    —    Applying the requirement to prepare for work to everyone on the lower level of the new benefit takes no account of personal circumstances, work history or location.

FOUR TARGETS FOR CHANGE

  SCOPE has so far identified four areas in which it would wish to see modifications to the current proposals.

1.  No Compulsion for those approaching pension age

  The government proposes that everyone on the lower level of the new benefit would be required to prepare for work. The compulsion would be backed by financial sanctions.SCOPE takes the view that men and women approaching state pension age should be exempt from this compulsory requirement. Their engagement in return-to-work activity should be voluntary.

  The arguments for this exemption are that:

    —    Many older workers in declining health will deeply resent the notion that after long and often arduous working lives they should once more be forced to contemplate a return to the labour market.

    —    Targeting the time and resources of the employment services at older workers who resent intervention is not an efficient use of public money.

    —    Claimants approaching pension age are especially numerous in the older industrial areas of the North, where there is likely to be the greatest difficulty in absorbing large numbers back into work.

  Older workers can and do make a substantial contribution to the economy. Where those on benefits can be re-incorporated back into the labour market this should be welcomed, but pragmatism and sensitivity is needed as well.

2.  A Time Limit on the Requirement to prepare for work

  The proposals do not include any time limit on the compulsory requirement to prepare for work. So presumably if a claimant failed to find work they would be required to keep on preparing for work until they actually found work, reached pension age or died. If they gave up, their benefit would be reduced.

  SCOPE takes the view that the requirement to prepare for work should be time-limited. If a sick or disabled claimant fails to return to work after a specified period their continuing engagement in preparation for work should become voluntary.The arguments for a time limit are that:

    —    Some individuals are always likely to find it difficult to return to work, not least because of their health problems or impairments. One of the reasons why so many men and women have remained on incapacity benefits for so long, and given up looking for work, is that they know they are unlikely to be employers' first choice.

    —    Years of failed job applications and courses that lead nowhere are likely to dispirit many claimants, possibly exacerbating mental health problems in particular.

    —    In more difficult local labour markets there is no realistic hope at present that more than a small proportion of incapacity claimants can be absorbed back into work.

  In the 1980s and 90s, many of the claimant unemployed were forced onto a merry-go-round of training courses and schemes that led nowhere. There is a danger that incapacity claimants will be forced down a similar route.

  Long-term engagement in unpaid voluntary work should be treated as a form of "work". Many disabled people do valuable unpaid work in the community. Given the barriers they face, for many this is the only way of making a contribution to their community and building self-esteem.

3.  Comprehensive benefit protection for those returning to work

  If claimants are to move into employment they have to perceive this option as financially worthwhile and relatively risk-free.

  SCOPE takes the view that there should be comprehensive benefit protection for incapacity claimants returning to work. If a job doesn't work out for whatever reason they should be able to return to the full package of benefits to which they were previously entitled.

  The arguments for comprehensive benefit protection are that:

    —    The actual benefits package to which many incapacity claimants are entitled is complex—IB is only part of the jigsaw. Therefore protection for IB alone (as presently proposed) is insufficient.

    —    Returning to work is an inherently uncertain process. For some there can be no certainty that health difficulties will not recur, and for others that they will be physically or mentally up to the job.

    —    Disability Living Allowance (DLA) creates disincentives. Although DLA is not means tested and should not be affected by finding employment, in practice a review can be triggered. Given the questionable standard of decision-making on this benefit, this adds to people's fear that looking for work endangers financial security.

  The full package to which claimants were entitled (including IB, DLA, Income Support, Housing Benefit, Council Tax Benefit and means-tested personal support) should be protected. If an individual's circumstances have changed, their benefits entitlement would in due course be re-assessed of course. Furthermore, the existing and proposed benefit protection needs to be better publicised—too many claimants are already unaware of their entitlements.

4.  A high quality roll-out for pathways to work

  The intention is that Pathways to Work will be rolled out across the whole country. However, it is not clear that the intention is to roll out the initiative in its present form. A cheaper, slimmed-down version may be the government's preferred option.

  SCOPE takes the view that there should be no dilution of the present model. Indeed, it may need to be beefed-up.

  The arguments for a high quality roll-out are that:

    —    In its present form, Pathways appears to work. The experience in the pilot areas is that the share of claimants returning to work within six months is up by around eight percentage points.

    —    If there is to be compulsion to engage in return to work activity, it is only reasonable that the employment services provide a high-quality service to claimants.

    —    As Pathways is rolled out further, away from the high IB areas where it has been piloted, it will encounter a client group that is increasingly skewed towards those with greater personal obstacles to re-entering employment. In the areas with lower IB claimant rates, many people with lesser health problems and impairments are already in work.

  The danger is that because Pathways requires a major commitment of staff time, rolling it out across the whole country will lead to corners being cut. A shortage of trained staff is an obvious short-term constraint. More generally, there is a danger that the aspiration to roll out Pathways will fall foul of the parallel government commitment to reduce civil service numbers.



220   Not the Green Paper!: The reform of Incapacity Benefit: alternatives to the government's proposals, SCOPE, London, January 2006. Back


 
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