Disability employment gap Contents

Conclusions and recommendations

1.The Department has to date chosen not to set absolute targets for reducing the disability employment gap, on the basis that it is sensitive to change for reasons other than the impact of policy. We understand this rationale. Clear reporting and measures of progress are, however, essential to keeping the goal of halving the gap in focus and ensuring transparency over whether and where progress is being made. This is especially so because halving the gap—and indeed, going beyond this where possible—is an ambition that will, in all likelihood, not be achieved by 2020. It is a long-term ambition that requires long-term thinking and a consistent approach. The Department can do much to lay the ground for this by introducing clear expectations, and detailed measurements and reporting standards now. Only through measuring outcomes will it be possible to identify and spread good practice. (Paragraph 13)

2.We recommend the Department commit to gather data and report on a range of measures, including, but not limited to, those using the Labour Force Survey. It should report on measures of disabled people’s experiences of the quality of work, surveys using questions that give specific examples of mental or physical difficulties in carrying out day-to-day actions in determining whether an individual is “disabled”, and progress on reducing employment gaps for different conditions. It should also conduct research into how difficulties associated with different conditions have been surmounted. (Paragraph 14)

3.As the Labour Force Survey is likely to remain the most widely-used measure of disability and the clearest means of tracking the Government’s progress, we recommend the ONS and DWP commit together to not making further changes to the Labour Force Survey question on disability for the next ten years, to enable consistent tracking over time. (Paragraph 15)

4.Achieving the Government’s ambitions on the disability employment gap will require a sustained commitment from a range of different agencies, Departments and external stakeholders beyond the DWP. Businesses have a vital leadership role to play, and bringing in health and education services is also of great importance. It is important that efforts are co-ordinated to ensure that all of those involved are working consistently towards the same goal. We recommend that the Government publish a Disability Employment Strategy, building on the outcome of the green paper consultation. This would bring together the initiatives already announced that relate to halving the gap, build on them, and ensure that this seen as a shared, long-term objective and priority across all relevant Departments. It should then commission an annual report on progress towards meeting its strategic goals, drawing on the improved monitoring that we recommend. (Paragraph 18)

Supporting disabled people into work

5.We welcome the Department’s decision to exempt some severely disabled claimants from repeated reassessment for ESA. This will reduce pressure on disabled people (and their families, carers and so on). It should also reduce assessment costs for the Department and waiting times for assessments. We invite the Department to set out in response to this report both when it intends to introduce this change, and the criteria it will use to identify claimants that will be exempt. (Paragraph 24)

6.The Work Capability Assessment is fundamentally flawed. The Department should quickly begin the process of reforming it. We are pleased that the Department is looking at how it can take a more flexible, personalised approach to providing unemployed disabled people—including those with the greatest needs—with support. We are, however, concerned that the Work Capability Assessment model proposed in the Department’s green paper would place more responsibility on Work Coaches than is appropriate for their current levels of expertise, particularly in terms of re-assessing and varying conditionality over time. We reiterate the recommendation from our Future of Jobcentre Plus report concerning developing a front-line, senior disability specialist role for Work Coaches. If Work Coaches are to be handed much more discretion over setting conditionality, it is imperative that they do so from a well-informed position. (Paragraph 28)

7.Disabled people who want to work and feel they might be able to do so with some assistance should have access to support wherever possible, irrespective of the type and level of benefit that they are claiming. It is important that Work Coaches encourage claimants to access programmes and resources where appropriate, and that individuals feel that they are able to take steps towards work without risking their benefit entitlement. A “keep in touch” discussion could help claimants who would like to take steps towards work to access support, while ensuring that they understand that this will not affect their benefit entitlement. We are concerned, however, about the green paper’s suggestion of applying conditionality to people in the ESA Support Group. We recommend that the Department does not immediately proceed with the idea of mandating contact between Support Group claimants and JCP. There is limited evidence to support this being a helpful approach, and some evidence that it is counter-productive. We recommend that any steps to engage the Support Group are introduced on a voluntary basis, and are led by the needs of individual claimants. We also re-iterate our previous recommendation, supported by Government, that participation by disabled people in contracted-out DWP employment support programmes should be voluntary and free from the risk of sanctions. This should extend to JCP programmes for the Support Group. (Paragraph 29)

8.The Department must ensure that in attempting to ensure that disabled people comply with the conditions of their benefits, it is not inadvertently harming their work prospects. Sanctions, where applied, should be a means to an end rather than an end in themselves. We heard that inappropriate sanctions can cause significant hardship, which in turn can affect the health of disabled claimants and make a return to work less, not more likely. The Department must consider how it can enhance the protection that it offers to disabled claimants. Drawing on the outcome of the green paper consultation on the Support Group, and the Yellow Card trial, we recommend the Department develop a Code of Conduct for Work Coaches on applying sanctions to disabled people. This should incorporate existing safeguarding advice on protecting vulnerable ESA claimants. It should also include guidance on how to consider the impact on a disabled claimants’ mental and physical wellbeing when deciding whether to make a referral for a sanction. (Paragraph 31)

9.We recommend that the Department clarify in response to this report whether and how transitional protection will apply to current ESA claimants who experience a change of circumstances aside from those set out in Welfare Reform and Work Act 2016 regulations. (Paragraph 32)

10.We welcome the announcement of additional employment support for people in the ESA-WRAG group, including the consultation on introducing a more comprehensive package of support in Jobcentre Plus. We have heard concerns, however, about the decision to align the rate of ESA for new WRAG claimants with the current rate of JSA. Where new ESA claimants have unavoidably higher living costs related to their conditions, this may leave them with lower disposable incomes than JSA claimants. ESA claimants are not expected to find work as quickly as JSA claimants, having been assessed as having limited capacity for work, and are likely to need support for longer. Even meeting the conditions of their benefits by participating in work-related activity can incur expenses that are higher than those of non-disabled claimants. It is imperative, therefore, that alongside the JCP support package the Department provides additional financial support to people in the WRAG where it has identified that the new, lower rate will leave them unable to meet essential living costs related to their conditions and benefit obligations. (Paragraph 40)

11.The Government expects the new, lower rate for the ESA-WRAG to enhance incentives to work. The evidence is, at best, ambiguous. We heard substantial concerns about the possible impact of the new rate on disabled people’s capacity to look for and move into work. Ensuring that a financial support package is in place may go some way to mitigating this risk. We remain concerned that the Department’s rationale for its decision rests on limited evidence. Furthermore, the employment support-related mitigating strategies proposed are untested and dependent on the discretion and skills of JCP staff. In the case of the proposed “Personal Support Package”, they are unlikely to be fully implemented by the time the reduced rate is introduced. (Paragraph 41)

12.We welcome the Department’s acknowledgement that disabled people may have unavoidably higher living costs related to their health conditions, and its commitment to helping ESA-WRAG claimants who receive the new, lower rate of payment to meet these costs. Having made this commitment, the Department must ensure that it spends its money wisely, effectively targeting support towards those in need. This requires greater clarity than has been forthcoming on how the Department intends to do this. If the Department is to press ahead with this change, it must ensure that prior to its introduction it has set out a clear plan for identifying where new claimants have additional, unavoidable living costs relating to their conditions that they will struggle to meet with the new payment level, and how it will ensure that they are able to meet these costs. This will require dedicated financing, beyond the remit of current discretionary support available through Jobcentre Plus (for example, via the Flexible Support Fund). We recommend the Government set out its approach in response to this report, prior to implementing the new, lower rate. Failure to do this could undermine both the Government’s case that there will be positive behavioural change amongst claimants and the savings that it expects to make. (Paragraph 42)

13.Access to Work is a highly-valued scheme. It could be one of the Department’s most important tools in improving disability employment rates and helping disabled people to stay in work. Awareness of the scheme, however, remains low, and it is not without room for improvement. The Department should prioritise building on Access to Work’s impact to date, focusing on raising awareness and on improving the user-friendliness of the scheme. We recommend that the Department launch a publicity campaign for Access to Work, targeting disabled people, employers, and its own front-line staff. We further recommend that potential beneficiaries should be permitted to complete pre-eligibility checks in Jobcentre Plus without the requirement to have obtained an offer of employment, and that claimants should be allowed to take their awards, or pending awards, with them if they move jobs. (Paragraph 48)

14.Given the extensive evidence of the positive effects of Access to Work on disabled people’s employment rates and the commitment to extra funding for the scheme, we are surprised that the Department has never sought to quantify its benefits. It may even be self-financing. It may even be self-financing. We recommend that the Department carry out research into the costs versus benefits of Access to Work, to ensure that any further decisions on funding are made from a strong evidence base. (Paragraph 49)

Working with employers

15.The Government has little prospect of halving the disability employment gap unless employers are fully committed to taking on and retaining more disabled people. The relaunched Disability Confident, the Government’s flagship campaign to promote disability employment to employers, needs to address many of the criticisms of the original campaign. It is currently too early to assess its impact. Much of whether it is successful, however, will depend on it developing a high profile, reaching and signing up large numbers of employers, and being seen as a valuable accreditation for businesses—including those who might not otherwise engage. To assess whether Disability Confident is meeting its objective of increasing disability employment, and to learn lessons for future employer engagement strategies, we recommend that the Department commission an evaluation of the campaign before 2020. This should take into account what changes members display in their hiring and employee retention behaviour, as well as establishing whether it is attracting a broad spectrum of employers. (Paragraph 56)

16.Financial support, such as that provided through Access to Work, is clearly important to helping disabled people move into and stay in work. We heard, however, that being able to access specialist, and if necessary, condition-specific, bespoke, practical advice is at least as important for employers who are seeking to take on or manage disabled employees. There is no shortage of organisations offering such support—but often employers are not aware of what is available, especially locally. We recommend that the Department proceed with implementing a “one-stop shop” for employers, which should be linked to Disability Confident. A central feature of this should be signposting towards local, specialist services (including those that deal with specific impairment types) that offer support on making adjustments and on other aspects of employment retention. (Paragraph 61)

17.We welcome the Department’s measures to support employers of disabled people, such as the Small Employer Offer and the Fit for Work tax exemption scheme. We also recognise that where some forms of incentives, such as wage subsidies, have been trialled in the past, there has not been concrete evidence of success. Financial incentives could, however, encourage employers to undertake desirable behaviour, which in turn might encourage others and create a virtuous circle. It is clear that there is a great deal of interest in the role incentives for employers could play in tackling the disability employment gap, even if it is currently far from clear what sort of financial support package might work best in Britain. (Paragraph 66)

18.We recommend the Department test a range of approaches to incentivising employers, using a collection of small trials. These should test, for example, the impact of wage subsidies, incentives such as relief on National Insurance Contributions, and commissioning external organisations to provide support and guidance directly to employers. The Department’s evaluations should consider the effects on different industries and different sizes of business. In finding out what does work, the Department must also be open to discovering what does not. Sticking to the same safe strategies will continue to bring the same results. (Paragraph 67)

19.For too long, disabled people who want to work have lacked the support to enable them to do so. Developing a health condition or disability while in work has, too often, meant dropping out. Once unemployed, disabled people have faced obstacles both obtaining and staying in work. The large pool of unemployed disabled people who want to work is, however, a fantastic opportunity for the economy. We are pleased that the Government has recognised the imperative of halving the disability employment gap. We do not underestimate the scale of the challenge it now faces in making this vision a reality. The Government is aiming to achieve a reduction in the disability employment gap of a magnitude much greater than that seen in recent decades in the UK. Now is not the time for a cautious approach. (Paragraph 68)

30 January 2017