Welfare Reform Bill

Memorandum submitted by Scope (WR 21)

Scope welcomes the opportunity to contribute to the Committee’s consideration of the Welfare Reform Bill and looks forward to providing more detailed oral evidence about the measures within the Bill and their impact on disabled people and their families.

About Scope

Scope is a leading disability charity that supports and works with disabled people and their families at every stage of their life. We believe disabled people should have the same opportunities as everyone else and we run campaigns with disabled people to make this happen. Scope operates in England and Wales and provides localised, individual care and support, residential, information and advice, employment and education services for disabled people and their families. As a charity with expertise in complex support needs and cerebral palsy we never set limits on potential.

Scope’s response

In this submission we have focused on our most pressing concerns in relation to the provisions in the Welfare Reform Bill and have tried to avoid substantive discussion of issues that have been raised by other disability organisations whose submission we support.

Our submission focused on:

1. Compliance with human rights obligations

2. Time-limiting the payment of contributory ESA

3. Reform of Disability Living Allowance (DLA)

4. Removal of Community Care Grants and Crisis Loans

Scope is also a member of the Disability Benefits Consortium and supports wider concerns made in their submission to the Committee.

1. Compliance with human rights obligations

The Explanatory Notes accompanying the Bill include a section on the compatibility of its provisions with articles in the European Convention on Human Rights (ECHR), and there is a statement of compatibility - at the start of the Bill - referring to provisions contained in the Bill [1] . However, this does not cover any subsequent statutory instruments provided for in the Bill [2] .

Statements of compatibility are intended to ensure human rights analysis is undertaken at an early stage when developing legislation. Despite the Government’s assertion of compliance, not all the draft regulations have yet been published and, as such, significantly limits the extent to which the Bill, as a whole reform, can be subjected to necessary levels of Parliamentary scrutiny.

With so many wide-ranging powers being introduced, that put greater emphasis on conditionality, sanctions and loss of benefits, we are concerned that this is a worrying precedent being set. As the Joint Committee on Human Rights (JCHR), which, as part of its legislative scrutiny of the Welfare Reform Bill in 2009, noted; ‘where the Government’s view on compatibility relies on safeguards to be provided in secondary legislation’ it is important that ‘draft regulations are published together with the Bill [3] ; something that had also been commented on in its report [4] on the Welfare Reform Bill 2007. We are concerned that the Government, through this new Bill, will exacerbate this problem, as by not specifying the safeguards that it considers necessary for the provisions and regulations to be compliant with Convention rights, there is a risk that the provisions in the Bill will be implemented in a way that could surmount to incompatibility with Convention rights.

Most significantly we would draw the Committee’s attention to the need for sufficient safeguards to protect rights from arbitrary interference in the implementation of regulations. There is significant evidence of the problems arising from the application of conditionality and sanctions for, for example, Employment & Support Allowance (ESA) claimants. Our long-standing concerns include the fact that the Work Capability Assessment (WCA) does not effectively measure fitness for work and that application of the assessment is producing inappropriate outcomes (reflected in the high rate of successful tribunal appeals [5] ), with the risk of financial sanction and even complete withdrawal of benefits for non-compliance.

As such, we remain concerned at the lack of effective safeguards (as no substantive detail has been provided in the absence of draft regulations) against these powers being exercised in a way that could breach Article 6, Article 8, Article 14 and Article 1 Protocol 1 Convention rights by being a disproportionate and arbitrary interference with them.

We would ask the Committee to:

§ request from the Government further detail, data and modelling relating to provisions on the face of the Bill and in forthcoming regulations to enable the Committee to truly understand the cumulative impact of the proposed measures on disabled people and their families.

§ seek explicit commitment from the Government that all the conferred powers in the Bill to make regulations will be assessed and exercised in compliance with the rights in the Convention.

§ request from the Government further information about key human rights issues arising from the Bill including, whether the linking of benefit payment to specific work-related requirements will be administered, without discrimination, and in a way which is compatible with the right to respect for private and family life and property rights (Article 8, Article 1 Protocol 1 and Article 14 of the ECHR).

2. Time-limiting the payment of contributory ESA

The Bill makes provision to time-limit entitlement to Contributory Employment & Support Allowance (ESA) for those in its Work-Related Activity Group to a maximum period of 365 days. After this time, the claimant will be able to claim income-based ESA, if they have no other source of income or savings under £16,000.

We believe that this measure penalises those who have paid National Insurance contributions during their working life and acts, further, as a disincentive to this group to re-renter paid employment. As a result of the provision, people who have withdrawn from work due to illness will be under undue pressure to return. We believe that the limiting of Contributory ESA to a year is arbitrary (see our concerns above about compatibility with the ECHR) and goes against the Government’s own data about projected time taken to enter / re-enter employment.

Without the necessary amount of time to manage their condition and a more productive taper of support towards re-entering work (beyond a financial incentive), some disabled people may feel it financially necessary to re-enter work before they are ready. Ultimately this can lead to a worsening of condition management in the workplace, a deterioration of the condition itself and an increase in additional costs associated with it.

Those who remain out of work and, after a year, are no longer be eligible for Contributory ESA and do not meet the eligibility eligible for income-based ESA (because, for example they have a partner who is working or have over £16,000 savings) will need to rely on the income of their partner or the savings they have accrued during their working life to meet their everyday expenses and health-related costs. This will put significant financial pressure on the household to cope with a reduction in income through lack of work, increased expenditure on condition management or health-related needs (the cause of withdraw from the workplace) and in some cases the disposal of their assets in order to receive the support they need from the state. This situation would both compound and increase the number of disabled people living, or at risk of living, in poverty.

As such we believe that this measure will drive greater reliance on state services, place households under financial and emotional stress and hardship, and distance from work those who have historically been engaged in paid employment, have careers and have paid contributions to the state. This is a punitive measure which contributes little to the Government’s aspiration of making work pay [6] , we strongly suggest a more effective way to raise employment levels in this group is to engage them in an positive and productive incentivising approach which builds on people's capabilities, confidence, aspirations and builds a road for them back to sustainable employment or work-related activity.

We would ask the Committee to support the removal of this clause from the Bill.

3. Reform of Disability Living Allowance (DLA)

Measures in the Bill set out plans to replace Disability Living Allowance (DLA) with a new Personal Independence Payment (PIP) from 2013. As the impact assessment states [7] , the reform is based on the Budget ambition of reducing total expenditure on the benefit by 20%. Based on the forecast growth for working age DLA expenditure, cutting spending by 20% in 2015-16 effectively means returning it to 2009-10 spending levels in real terms [8] .

We maintain that, by putting a savings target at the heart of DLA reform, the Government have failed to adequately understand or evidence what disabled people use their DLA for and the true extra costs that disabled people incur in our society. As such, these reform measures will not guarantee support for those who most need it, but rather restrict the numbers of people eligible for contribution and risk heightening levels of disability poverty [9] .

The inadequate understanding of the complexity of the additional costs is reflected in the Government’s replacement of the ‘care’ and ‘mobility’ elements of DLA with new ‘mobility’ and ‘daily living’ components in PIP. Whilst we welcome the Government’s attempt to diversify the proxies used in the assessment of additional cost, we are disappointed that the emphasis in this reform is placed on the severity of impairment and not on understanding the complex range of social factors that influence additional costs. Recent research by the think tank Demos shows that using a severity of impairment proxy does not accurately calculate disability-related costs and makes strong recommendations to include a wider range of factors, including type and standard of housing, employment status and access to transport systems [10] .

Including a wider range of social factors not only improves the accuracy of the assessment, but also makes visible actions other Government agencies and local authorities could take to reduce the costs that arise under their auspices, such as improving access to inadequate housing. The result of not including these wider proxies of cost is that the new PIP assessment will unwittingly find certain groups ineligible, as their condition will not be seen as severe enough to incur extra cost. The reassessment of approximately 1.8 million people of working-age who are currently in receipt of DLA [11] , therefore, have a substantial impact on those currently in receipt of the low (and in the case of the ‘care’ component mid) rates of DLA and, in particular, those with a learning difficulty, mental health conditions, on the autistic spectrum or with fluctuation and hidden conditions. Taken together with the real-term reductions in spending on social care and the tightening of eligibility for these (to ‘substantial’ and ‘critical’ levels) and other support services, this measure will have a considerably negative impact on the lives, prospects and finances of those who are found ineligible for PIP.

Given our reservations about the accuracy and effectiveness of the PIP assessment, and the potentially damaging consequences of its implementation, we feel that there is a need for the Government to put in place on the face of the Bill provisions that safeguard those who are currently in receipt of DLA (who may not be eligible under PIP) and makes transition arrangements that provide for the withdrawal of the financial contribution they have been reliant on to meet additional costs. Furthermore, DLA has acted as a passporting benefit to other financial support and services and we would welcome further clarification on the safeguards that the Government will put in place in its regulations to ensure that those currently accessing additional support can continue, if necessary, without having to receive PIP and are not adversely and disproportionately affected my the withdrawal of passporting.

Similarly, we would bring to the Committee’s attention the need for greater information and clarification in regards to age provisions in the Bill. Currently, the provisions suggest that a person will not be eligible to claim PIP after reaching 65 (or subsequent pensionable age), whereas in the DLA consultation [12] the Government assures that people over the age of 65 may continue to claim it if their needs continue. DLA makes an important contribution to the additional costs that older disabled people face and withdrawal would lead many into financial hardship and increased isolation. We would welcome an explicit statement of older disabled people’s eligibility for PIP after turning 65 years in the face of the Bill.

We are further concerned about how child claimants of DLA will fare under the DLA reforms. The Bill is unclear as to the provisions that will be made for children who are in receipt of DLA, whether they will be subject to a PIP reassessment and what the arrangement for those transitioning from children’s to adults services will be during the implementation of the measures. Transition can be an extremely expensive time for young children moving into adult provision and renegotiating their care, support and other financial resources. Lack of clarity around the implementation arrangements will only go to confuse this situation further and may lead to families and young people themselves having to subsume high additional costs associated with transition.

Finally, the Bill outlines plans to remove the mobility component of DLA from people living in residential care homes from 2013. Included in the Bill are plans to push back the date for removing the component (previously 2012) and to conduct a review of the support given by DLA against the responsibilities of care homes [13] . We still believe that these reforms are unnecessary and poorly targeted measures to reduce expenditure. Removing the mobility component of DLA will significantly impede the ability of those in residential care to play an active role in their local community, be independent and maintain relationships with family and friends. We strongly believe that this measure should be removed from the Bill and do not believe that the Department fof Work & Pensions’ review will find a reliable justification for retaining it.

We would ask the Committee to:

§ recognising the inadequacy of a 20% cuts being the central driving force of welfare reform, and in acknowledgement of the significant impact that this will have on disabled people, ask the Government for further evidence supporting the rationale for this cut.

§ call on the Government to publish in full the regulations and assessments relating to PIP so that the provision can be analysed and scrutinised in their entirety.

§ seek from the Government more detail on transition arrangements, including safeguards on the face of the Bill for those not eligible for PIP who are currently in receipt of DLA.

§ seek clarification on eligibility and safeguards for the provision of PIP for older disabled people (65 years) and disabled children.

§ contest and reject provisions that seek to remove the mobility component of DLA from people living in residential care homes.

4. Community Care Grants and Crisis Loans

The Bill would abolish discretionary payments from the Social Fund. Discretionary payments are Budgeting Loans, Crisis Loans and Community Care Grants. Crisis Loans and Community Care Grants are to be withdrawn in 2013 [14] and replaced with a ‘new locally-based provision’ which is devolved to local authorities without ring-fencing. Community Care Grants help to cover emergency costs and act as an ‘important safety net for those in need’ [15] , ensuring that people can remain independent and out of residential care for as long as possible. Crisis Loans are loans to vulnerable people who need general living expenses covered in an emergency.

The Bill further removes the statutory duty requiring local authorities to deliver this service. We are particularly concerned that the consequence of this provision is that councils may choose not to provide the service and could use the funds provided for other purposes, creating an unevenly distributed across the country. Scope recognises that this service is in need of reform and could be more efficiently targeted. However, we are gravely concerned that the removal of these duties will surmount to disabled people experiencing financial hardship and crisis being pushed further towards state dependency and a greater risk of living in poverty.

We would ask the Committee to support retaining the statutory duty on local authorities to provide ring-fenced financial support to disabled people in crisis.

March 2011

[1] ‘In my view [Secretary Iain Duncan Smith], the provisions of the Welfare Reform Bill are compatible with the Convention rights’ see: http://www.publications.parliament.uk/pa/cm201011/cmbills/154/11154.pdf

[2] As has been the case with recently laid regulation, see for example the new Employment & Support Allowance Regulations: http://www.legislation.gov.uk/uksi/2011/228/introduction/made?view=plain

[3] Joint Committee on Human Rights (2009) Fourteenth Report of Session 2008-09– Legislative Scrutiny: Welfare Reform Bill : http://www.publications.parliament.uk/pa/jt200809/jtselect/jtrights/78/7807.htm

[4] Joint Committee on Human Rights (2007), Second Report of Session 2006-07 – Legislative Scrutiny: Welfare Reform Bill, http://www.publications.parliament.uk/pa/jt200607/jtselect/jtrights/34/3402.htm

[5] MoJ / Tribunals Service (2011) Quarterly Statistics for the Tribunals Service, 2nd quarter : http://www.justice.gov.uk/publications/docs/tribunals-stats-q2-2010-11.pdf

[6] DWP (2010) Universal Credit: W elfare that works : http://www.dwp.gov.uk/docs/universal-credit-full-document.pdf

[7] DWP (2011) Disability Living Allowance Reform : Impact Assessment : http://www.dwp.gov.uk/docs/dla-reform-wr2011-ia.pdf

[8] ibid

[9] Demos (2010) Destination Unknown : http://www.demos.co.uk/files/Destination_unknown_-_web.pdf?1286894260

[10] Demos ( 2010 ) Counting the Cost : www.demos.co.uk/files/Counting_the_Cost_-_web.pdf?1292598960

[11] Social Policy Research Unit ( 2010 ) Working-age ‘welfare’: W ho gets it, why, and what it costs :

[11] www.jrf.org.uk/publications/working-age-welfare

[12] DWP (2010) Disability Living Allowance Reform : http://www.dwp.gov.uk/consultations/2010/dla-reform.shtml

[13] D WP (2011) Disability Living Allowance Reform : Impact Assessment : http://www.dwp.gov.uk/docs/dla-reform-wr2011-ia.pdf

[14] DWP (2011) Local support to replace Community Care Grants and Crisis Loans for living expenses: A call for evidence

[15] Public Accounts Committee (2010) The Community Care Grant: Eleventh Report of Session 2010–11 : www.publications.parliament.uk/pa/cm201011/cmselect/.../573/573.pdf