1Introduction
1.Despite some recent progress, disabled people still have much lower employment rates than those without disabilities. In mid-2016 in the UK, 49% of disabled people aged 16–64 were in work, compared with 81% of non-disabled people. The disability employment gap—the difference between the employment rates of disabled and non-disabled people—therefore stood at 32 percentage points. This is an improvement of two percentage points since 2013; there were 550,000 more disabled people in work in mid-2016 than in 2013.1 The gap has however widened from 30 percentage points in 2010, largely reflecting improvement in the non-disabled employment rate (see Figure 1, below). The UK fares poorly in international comparisons, and has a disability employment gap above the European Union average (see Figure 2, below).
Figure 1: Disabled and non-disabled employment rates, UK, 1999–2015
Source: Resolution Foundation, Retention Deficit, June 2016. Note: Annual rolling averages, historical dashed lines represent trends based on age 18–59 (women)/64 (men). Breaks represent changes in the survey questions or methods.
Figure 2: The UK fares poorly in international comparisons of the disability employment gap
Gap in the employment rate between those report a disability and those who do not, aged 15–64: 20112
Source: Jones, M. Disability and labour market outcomes, IZA World of Labor, April 2016
2.The Government has set itself the goal of achieving “full employment” in this parliament.3 Achieving this will require making substantial progress on reducing the disability employment gap. The 2015 Conservative manifesto pledged to halve the gap, and a subsequent press release from the Department for Work and Pensions (DWP/The Department) suggested this would be achieved by 2020.4 The commitment to improving disabled people’s employment rates was subsequently re-stated in the 2015 Autumn Statement, and by the current Secretary of State for Work and Pensions, Rt Hon Damian Green MP.5
The scale of the challenge
3.Halving the gap would require an extra 1.2 to 1.5 million disabled people to be in employment.6 Of the 3.5 million disabled people who are currently out of work, the majority are economically inactive—either not looking for, or not currently available for work (see Figure 3, below). Two million of the 3.5 million cite their health or disability as their main reason for being out of work, suggesting that a further 1.5 million are disabled but do not cite their disability as their main reason for being inactive.7 Research by Shaw Trust, a provider of employment support for disabled people, indicated that a higher proportion of disabled people who are economically inactive want to work, compared to their non-disabled counterparts.8 One part of the challenge is, therefore, to consider how those who are disabled and unemployed or economically inactive, but who could work given the correct support and working environment, can be helped to do so.
Figure 3: Many more disabled people than non-disabled people are economically inactive
Proportion of disabled and non-disabled people who are employed, unemployed, or economically inactive, October-December 2015
Source: Learning and Work Institute, Halving the Gap, July 2016
4.Reducing the disability employment gap is not simply a matter of getting currently unemployed disabled people into work. The Government must also look to stem the flow of people from work into unemployment due to ill-health. This is because:
- There is substantial evidence that being in appropriate employment is good for health, and that having a disability need not necessitate dropping out of work;9
- 83% of people who have a disability acquire it while they are in work;10
- Some 400,000 people leave the workforce after developing a disability or work-limiting condition each year;11
- More people will work into older age in future. As older people are more likely to be ill or disabled, the prevalence of illness and disability in the working-age people will increase. 15% of people aged 16–24 have at least one health condition that limits their day-to-day activities in some way. This increases to 42% of people aged 45 to 64, and 57% of people aged 65 to 74.12
This suggests there is a major role for in-work support for disabled people. It also illustrates a need for support for employers to help their employees to stay in work, to proactively address causes of ill-health at work, and to bring about cultural change on work and disability.13 This imperative has been recognised in a number of Government reviews on work and health: notably Dame Carol Black’s Working for a Healthier Tomorrow and the subsequent Review of Sickness Absence, and Liz Sayce’s review, Getting in, Staying in and Getting on.14
Employment support for disabled people
5.Since 2010–11, disabled people who are out of work and in receipt of benefits have been eligible for both the Work Programme and Work Choice schemes, which are the Department’s main welfare-to-work programmes. Those claiming Jobseeker’s Allowance (JSA) and in the Employment and Support Allowance (ESA) Work-Related Activity Group (WRAG) can be mandated to take part in the Work Programme (although different conditions apply to their participation), or can choose to take part in Work Choice if eligible.15 Those in the ESA Support Group (60% of all ESA claimants) cannot be mandated to take part in any programme, but can volunteer to take part.16 The Work Programme has performed poorly for ESA claimants. While around one in four JSA claimants obtain a job after referral to the Work Programme, the same can only be said of one in seven new ESA claimants and one in sixteen in the ESA “Other” category, which includes former Incapacity Benefit claimants.17 Work Choice delivered much better outcomes: 59% of individuals referred to it in 2014–15 moved into sustained employment. It is, however, a much smaller programme, and we have previously reported concerns that it was poorly targeted towards those disabled people with the most significant barriers to work.18 The DWP also has some initiatives and programmes aimed at disabled people who are in work or about to move into work, and their employers. These include the long-established Access to Work scheme, and the newer Fit for Work service and Disability Confident campaign.
6.Existing welfare-to-work provision, and much of the additional support available to employers and to disabled people in work, operates throughout England, Scotland and Wales. The Welsh and Scottish Governments provide some of their own initiatives, including support for employers.19 Support may also be commissioned locally—for example, through local authorities. Provision to devolve welfare-to-work services is contained in the Scotland Act 2016. Provision is devolved in Northern Ireland.
7.The Government has announced and begun to implement further measures and changes to existing programmes that relate to disability employment, including:
- The introduction of a new, smaller Work and Health Programme to replace both Work Choice and the Work Programme from late 2017, and corresponding changes in the support provided to disabled people through Jobcentre Plus;20
- Updating and enhancing the Disability Confident campaign, from 2016;21
- Funding of £60 million per year from 2017–18, rising to £100 million per year by 2020–21 for practical employment support for disabled people, to be spent according to advice from representatives of disability charities and organisations;22
- Investing £43 million up to 2019–20 in trialling ways to provide specialist support for people with common mental health conditions, via the Work and Health Joint Unit;23
- Decreasing the ESA-WRAG benefit payment and Universal Credit equivalent, bringing it in line with the JSA rate from April 2017. The Government states this will remove “financial incentives that could otherwise discourage claimants from taking steps back to work”;24
- Investment in support to help people with specific conditions: for example, a £280,000 investment over two years in a social enterprise to support people with learning disabilities and autism;25 and
- Carrying out a consultation on several of aspects of employment support, including the Work Capability Assessment, detailed in Improving Lives: The Work, Health and Disability Green Paper (the green paper), published in October 2016.26
The scope and aims of our inquiry
8.In our report on The Future of Jobcentre Plus we made recommendations on several aspects of DWP support that relate to disabled people, particularly those who are out of work. These are summarised in Box 1, Chapter 3. In this inquiry we sought to build on these recommendations. We also aimed to look more widely at employment retention support for disabled people, support for employers to help reduce exits from work due to ill-health, and to consider how the Department can help bring about cultural change and encourage employers to take on more disabled people. We are grateful to everyone who has contributed to the inquiry. In the text our conclusions are set out in bold, and our recommendations, which require a government response, are set out in bold italic.
1 ONS, Table A08: labour market status of disabled people, November 2016. Data refer to July – September 2016. Due to change in the LFS survey question on disability in 2013 it is not possible to directly compare data prior to this.
2 From the European Union Labour Force Survey, 2011. 2011 is the most recent year for which data is available. The Resolution Foundation notes that “disability is defined slightly differently in this data – capturing those with ‘long-standing difficulty in basic activities”. The EU-LFS covers all EU countries, alongside Norway, Sweden and Iceland. Data refers to self-reported disability: in some countries, social and economic factors may make respondents more or less likely to report having a disability. 2011 is the last year for which data is available. Luxembourg’s very low employment gap can be explained, in part, by the country requiring employers to recruit a certain quota of disabled people or face fines.
3 Conservative Party, 2015 manifesto, May 2015, p.17
4 Conservative Party, 2015 manifesto, May 2015, p.19; DWP, Press release: First Disability Confident city sets out bold employment ambition, June 2015
5 HM Treasury, Spending review and Autumn Statement, Cm 9162, November 2015, para. 1.130; HC Deb 31 October 2016, c666-667 (Damian Green)
6 Oakley, M. Closing the gap: creating a framework for tackling the disability employment gap in the UK, Social Market Foundation, March 2016; Gardiner, L. and Gaffney, D. Retention deficit, Resolution Foundation, June 2016. The lower estimate assumes that there is no corresponding increase in the non-disabled employment rate, while the higher number takes into account both population growth and improvements in the employment rate of non-disabled people.
9 For overviews see: Black, C. Working for a Healthier Tomorrow, The Stationary Office, March 2008 and Waddell, A. and Burton, A.K. Is Work Good for Your Health and Wellbeing? The Stationary Office, 2006
10 DWP, https://www.gov.uk/government/collections/disability-confident-campaign, November 2016
12 Public Health England and The Work Foundation, Health of the Working Age Population, p.3
13 Disability Rights UK (DEG0041), The Work Foundation (DEG0094), Professor Ralph Fevre and Dr Deborah Foster (DEG0066), British Association for Supported Employment (DEG0033), Association of British Insurers (DEG0072), College of Occupational Therapists (DEG0063), National Autistic Society (DEG0060), Action for M.E. (DEG0031), Council for Work and Health (DEG0091), MS Society (DEG0062), Pluss (DEG0040), Joseph Rowntree Foundation (DEG0085), Scope (DEG0069), Business Disability Forum (DEG0042), Local Government Association (DEG0049), Equality and Human Rights Commission (DEG0089), Learning and Work Institute (DEG0086), Action on Hearing Loss (DEG0038)
14 Black, Working for a Healthier Tomorrow; Black, C. and Frost, D. Health at Work: An Independent Review of Sickness Absence. Cm. 8205, Department for Work and Pensions, November 2011; Sayce, L. Getting in, Staying in and Getting on: Disability employment support fit for the future. Cm 8081, June 2011
15 Work Choice is a specialist programme for disabled people, whereas Work Programme is available to all claimants, irrespective of health conditions. The Department does not collect data on how many JSA claimants have a disability. A summary of the differences between JSA, ESA-WRAG and the ESA Support group is contained in Chapter 2, Box 2 of this report.
16 DWP, Improving Lives: The Work, Health and Disability Green Paper, October 2016, para. 83. Whether a claimant is eligible for JSA or ESA, and which group (WRAG or Support Group) they are placed in if found eligible for the latter, is determined through a Work Capability Assessment. The different outcomes and requirements of claimants are explained in Box 2, Chapter 3 of this report.
17 DWP, Work Programme quarterly statistics to March 2016, June 2016
18 DWP, Work Choice official statistics, May 2016; Work and Pensions Committee, Welfare to Work, 2nd Report of Session 2015–16, HC 363, para 43
19 For example, the Scottish Government runs the Healthy Working Lives scheme to support employers and disabled people in work, and the Welsh Government provides the Workboost Wales service. Some DWP-led provision, such as Fit for Work, is not available in Scotland.
20 Spending on the Work and Health Programme, which will cater for some disabled claimants, will be only half of that spend on disabled people alone in Work Programme and Work Choice. Work and Pensions Committee,
The Future of Jobcentre Plus, 2nd Report of Session 2015–16, HC 57, November 2016. Para. 57–73.
21 Q172 (Penny Mordaunt). Disability Confident provides guidance and resources to employers, as well as an accreditation scheme.
22 Murphy, C. and Keen, R. Abolition of the ESA Work-Related Activity Component, November 2016, p.18
23 HL Deb 29 February 2016, c594. The Work and Health Unit is a joint initiative between DWP and the Department of Health.
24 Murphy, C. and Keen, R. Abolition of the ESA Work-Related Activity Component, p.3
25 DWP, Government backs social project in helping disabled people into work, December 2016
26 DWP and DH, Improving lives
30 January 2017