1 The number of Incapacity Benefit
1. Incapacity benefits are a group of benefits claimed
by working age people on the grounds of disability or ill-health.
During 2008-09, the Department for Work and Pensions (the Department)
spent £12.6 billion on incapacity benefits.
2. The number of people claiming incapacity benefits
peaked in 2003 at 7.7% of the working age population.
In August 2009, the number was 2.63 million (7.2% of the working
age population), and has remained in excess of 2.5 million for
over a decade (Figure 1).
Some 1.5 million of the 2.6 million people currently on incapacity
benefits have been in receipt for more than five years, indicating
that this a deeply intractable issue.
Around 650,000 people leave incapacity benefits every year and
whilst the Department does not have reliable information on the
destinations of around a quarter of these, it estimates that at
least 55% move on to other benefits like Jobseeker's Allowance
and Retirement Pension.Figure
1: Incapacity benefits claimants volumes over time
Source: DWP Work and Pensions Longitudinal Study
3. In 2006, the Department set an objective to reduce
the volume of incapacity benefits claimants by one million between
2005 and 2015. A key
part of its strategy to achieve this target has been mandatory
participation in the Pathways employment support programme for
new claimants of incapacity benefits. In contrast, most long-term
claimants have so far not been required to participate in Pathways,
but can do so voluntarily.
The Department also introduced the requirement for new claimants
to attend work-focused interviews in order to receive their benefit,
and to undertake a medical assessment earlier in their benefit
claim than in the past.
4. In October 2008, the Department introduced a new
benefit called the Employment and Support Allowance for all new
incapacity benefits claims. The Allowance established a new medical
assessment to help determine eligibility for the benefit which,
following the Pathways experience, is completed much earlier in
the claim. The Employment and Support Allowance also incorporated
the programme of Pathways obligatory work-focused interviews (Figure
2: Employment support routes for someone claiming incapacity benefits
5. The Department uses external contractors ('prime
providers') to lead the delivery of Pathways in 60% of Jobcentre
Plus districts, paying 70% of the contract value on the basis
of performance achieved. In the remaining 40% of districts, Pathways
is led by Jobcentre Plus, but it also draws on the NHS and external
contractors to support delivery.
6. The Department accepted that the Pathways programme
has not achieved the results intended in terms of the number of
people helped into work or net financial savings and, for the
£793 million spent on it to end March 2010, Pathways has
not provided a net return to the Exchequer.
Although there has been a reduction of 125,000 claimants in receipt
of incapacity benefits between February 2005 and August 2009,
the Department accepted that Pathways will have contributed only
modestly to this reduction, and cannot determine precisely its
7. Moving those new and repeat claimants who are
required to participate in Pathways into employment has proved
harder than the Department expected. This has impacted both on
the performance of the programme as a whole and on the performance
2 C&AG's Report, para 2 Back
Q 186 Back
C&AG's Report, para 1.1 Back
Q 167 Back
Ev 22 Back
C&AG's Report, para 1.5 Back
C&AG's Report, para 8 Back
C&AG's Report, para 10 Back
Derived from C&AG's Report, Figure 2 Back
C&AG's Report, para 9 Back
Qq 126-129 and 166 Back
Qq 158 and 159 Back
Q 134 Back