Disability employment gap Contents

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1Measuring disability employment

The Government’s target

10.In a 2017 policy paper, Improving Lives: the future of work, health and disability, the Government announced its ambition to get one million more disabled people into work by 2027.7 Analysis by the House of Commons Library shows that there would need to be 4.5 million disabled people in work by 2027 to meet the Government’s target.8 From June to September 2020, 4.3 million disabled people were employed compared to 2.9 million from April to June 2013.9 DWP attributes this rise to factors such as overall improvements in the labour market (illustrated by the fact that the number of non-disabled people in work has also increased), a relative increase in the number of disabled people in work compared to non-disabled people, and increased prevalence of disability within the population.10

11.The Government’s target is sometimes described as an “absolute” target, because it focuses on the actual number of disabled people in employment, independent of the number of non-disabled people. “Relative” targets, such as the disability employment gap, are based on a comparison of the number of disabled people and non-disabled people in employment. Critics of the absolute target have argued that the increase in the number of disabled people in work is distorted by the rising prevalence of disability in the population—that is, the number of people reporting that they have a disability—and overall improvements to the labour market (illustrated by the fact that the number of non-disabled people in employment over the same period has also increased). Relative targets, some argue, provide a better picture of how disabled people are faring in the labour market compared to their non-disabled counterparts. But relative targets also have disadvantages. For example, the disability employment gap could narrow even if the number of disabled people in employment decreases, if the number of non-disabled people in work falls at a higher rate.

12.The Minister for Disabled People, Health and Work, Justin Tomlinson MP, described the Government’s progress towards its target as “something to celebrate”.11 The National Audit Office (NAO), however, has said that the Government’s target “cannot be used to measure the success of its efforts”. In its 2019 report, Supporting disabled people to work, the NAO said that while the number of disabled people in work had increased, the Department itself had acknowledged that the increase “cannot be attributed directly to any particular cause, including its policies or programmes”, and that other factors, such as an overall rise in employment levels and the number of people reporting that they have a disability, have contributed to the increase.12 The NAO noted that, while the number of disabled people in work had increased in the previous five years, the number of disabled people out of work had remained the same, at around 3.7 million.13

13.In 2019, the previous Secretary of State for Work and Pensions, Amber Rudd, announced her intention to review the Government’s target during a speech made at the disability charity Scope, in which she said that she wanted to “set a new and more ambitious goal”.14 We asked the Minister whether the Department had reviewed the target following the former Secretary of State’s speech; in response, he told us that no work had been done on this.15 He did, however, say that the Department intends to adopt a new “ambitious” target that will “continue to focus minds”.16 The Minister also told us that this new target would be “codesigned” through the consultation process launched alongside the Department’s Green Paper on health and disability support.17 The Green Paper, however, makes no mention of a new target, and reiterates the Government’s commitment of getting one million more disabled people into work by 2027.18

Absolute and relative targets

14.The 2015 Conservative Party manifesto set a target of halving the disability employment gap, although it did not specify a timeframe for achieving this.19 Since 2015, the gap has reduced by 5.2 percentage points; it would need to decrease by a further 12 percentage points to meet the Government’s previous target of halving the gap.20 The graph below shows how the gap has narrowed since 2015:

Figure 2: The disability employment gap, 2015–20

Source: Disabled people in employment, Briefing Paper 7540, House of Commons Library, May 2021

15.We heard evidence that, while relying on the disability employment gap as a measure of disabled people’s experiences of work has its limitations, reducing the gap remains a useful target. Tom Pollard, an independent policy expert who has previously worked for DWP, said that the disability employment gap is a useful indicator but alone is “not sufficient for demonstrating meaningful progress”.21 He said, however, that there should be a “general target” aimed at closing the disability employment gap.22 Rob Geaney of the Royal National Institute for Deaf People (RNID), a charity that supports Deaf people and people with hearing loss, described closing the gap as a “necessary target”, but one that, by itself, does not provide a full picture of other issues that disabled people in employment face, such as pay and career progression.23

16.We asked the Minister why the Government had chosen to adopt an absolute target of increasing the number of disabled people in work in place of a relative target of reducing the gap. He told us that the absolute number has always been his “personal preference”, and that although the Department still measures the disability employment gap, the relative target “has its limitations”. The Minister argued that, by way of example, the disability gap had closed over the previous 12 months, but that the absolute number of disabled people in work had decreased because of the pandemic, suggesting that the closing of the gap does not necessarily represent any actual improvement in disabled people’s employment status.24

17.The Government’s decision to adopt an absolute target in place of a relative one has received criticism. The Trades Union Congress (TUC), which estimates that it would take around three decades to eliminate the gap completely, described the Government’s decision to adopt a new target in 2017 as a “disappointing reduction in ambition”.25 Professor Melanie Jones of Cardiff Business School said that the Government’s target is “not sufficiently ambitious”, and that at the time of its introduction, wider employment trends suggested that the Government would meet it “just on the basis of prior performance”.26 Dr Mark Bryan, Reader in Economics at the University of Sheffield, said that the Government’s target of getting one million more disabled people into work was equivalent to halving the disability employment gap at the time, but that changes in overall employment levels and the rise in disability prevalence means that this is no longer the case.27 Around 200,000 more disabled people need to be in employment for the Government’s target to be met.

18.The Centre for Social Justice Disability Commission, chaired by Lord Shinkwin, recommends that the Government should return to its previous target of halving the gap as, it argues, progress towards the Government’s absolute target is “distorted” by the increased prevalence of disability in the population.28 Professor Melanie Jones and Professor Victoria Wass also argue that absolute measures are susceptible to the increased prevalence of disability and wider economic trends.29

19.The proportion of the population who are disabled increased from 16.4% in 2013 to 19.9% in 2020.30 Professor Jones and Professor Wass say that this increase is largely caused by “broadened social interpretation of disability as awareness and acceptability of disability has grown” rather than changes in levels of health and functional impairment.31 Academics at the University of York and the University of Sheffield, in their submission to our inquiry, said that the increased prevalence of mental health problems is a significant factor behind the rise in disability prevalence.32 Joshua Reddaway, Director for Work and Pensions, Value for Money, at the NAO suggested that the rise in prevalence could be caused by an increase in number of people in employment reporting that they are disabled:

[…] Over time the number of people who have responded “Yes”, they are self-defining as disabled, has gone up year on year. What is interesting is that it is only people who are in employment where that trend has happened. There has been no similar trend in people who are either unemployed or out of work. What you have seen is this gradual increase in people in employment. In fact, it is pretty staggering numbers.

It is perfectly possible that what is happening there is that there is a general increase in disability in our society. […] It is more likely that there is something going on in the workplace where more people are willing to say that they are disabled in greater numbers.33

20.Professor Jones and Professor Wass recommend that, instead of relying on a single measure, the Government should use a “set of indicators” when monitoring disability employment.34 They said that the Prevented from Working by Disability (PWD) measure, which multiplies the disability employment gap by the disability prevalence rate, is a “valuable measure for policy, whether or not it replaces or supplements the disability employment gap measure”, as it takes the prevalence of disability into account. They acknowledged, however, that there is disagreement over whether it should be the Government’s headline measure.35 In addition, they recommend that the Government should monitor progress against a “basket of indicators” such as the size of the gap for different impairment groups and demographic groups, the gap between how much disabled and non-disabled workers are paid, and other indicators of job quality such as disability gaps in wellbeing at work and the number of people in precarious forms of work.36

21.Professor Jones and Professor Wass also recommended that the Government should monitor the rate at which disabled people leave and acquire work.37 The rise in the number of disabled people in work has been attributed to the fact that it has become easier for disabled people to find employment. Scope, however, said that disabled people face greater barriers to staying in, and are more likely to fall out of, work: its analysis of ONS data found that disabled people are more likely to more likely to move out of work (at a rate of 4–5% compared to non-disabled people [2–3%]).38 In its Green Paper on health and disability support, the Department acknowledged that, to improve employment outcomes for disabled people, ensuring that they are supported to remain in work is “equally important” as supporting people to find work.39 It has also set out how it intends to ensure that more disabled people are supported to stay in work in its response to the 2019 consultation, Health is everyone’s business.40

22.There is broad support for the premise that the Government should have a target for improving disabled people’s employment rates. Views about what that target should be, however, differ. Both absolute and relative targets have drawbacks. Although the overall number of disabled people in work has increased since 2013, this is largely because of factors such as overall improvements to the labour market, which have also affected non-disabled people, and an increase in the prevalence of disability. It does not appear to be as a result of substantial progress in addressing the specific barriers that disabled people face to finding and staying in work. A relative measure, on the other hand, provides a clearer picture of disabled people’s experiences of the labour market compared to their non-disabled counterparts, but reducing the gap is not necessarily a sign that more disabled people are in work: it could be that the number of non-disabled people in work has decreased. To be meaningful and effective, the target needs to combine both absolute and relative elements, to benefit from the advantages of both and to mitigate their disadvantages.

23.We recommend that the Government adopt a target with two elements: closing the disability employment gap and increasing the number of disabled people in work. It should re-adopt its previous target of halving the disability employment gap. Alongside this, it should adopt a new, more ambitious absolute target aimed at increasing the number of disabled people in work, as its current target is not sufficiently stretching. At today’s employment levels, halving the disability employment gap would mean that around 1.2 million more disabled people need to be in work (assuming that the number of non-disabled people in work stays roughly the same). The Government should adopt this as its absolute target, which it should aim to achieve by 2027. We were disappointed to find that the Green Paper on health and disability support does not make any reference to a new target. The Government must use its National Strategy for Disabled People to set out its plans to adopt—and achieve—a more ambitious target instead.

24.In isolation, however, even the measures underlying this target do not give a full picture of the Government’s progress on disability employment or disabled people’s experiences of work. Instead of relying on a single measure, the Government should collect data against a set of indicators. It should continue to monitor the absolute number of disabled people who are in employment and the rate at which disabled people leave or remain in work compared to their non-disabled counterparts. In addition, it should measure the difference in average pay between disabled and non-disabled workers and consider adopting further measures of disabled people’s job quality. The Government should also consider adopting the Prevented from Working by Disability measure, which accounts for the prevalence of disability in the population, as an additional indicator against which it can measure progress.

Collecting data on disability employment

25.The Government collects data on disabled people’s employment from three main sources: the ONS Labour Force Survey (LFS), the ONS Family Resources Survey (FRS), and the Understanding Society (USoc) survey, which is led by the Institute for Social and Economic Research at the University of Essex. While the LFS uses different methodology from the other two surveys, DWP says “comparisons between the three surveys show similar patterns and trends in disability employment across a number of years”.41

26.We heard that using a single measure of the disability employment gap can mask wide disparities in employment rates between different impairment groups. Data show that people with learning disabilities, mental health problems and epilepsy are least likely to be in employment, and that disabled people with multiple health conditions are less likely to be in employment than people with only one condition (62% of disabled people with one health condition were in employment from April 2018–March 2019, compared to 54% of people with two and only 26% of people with five or more conditions).42 The graph below shows the employment rates of people by impairment group:

Figure 3: Employment rate of disabled people by health condition

Source: Disabled people in employment, Briefing Paper 7540, House of Commons Library, May 2021

27.Dr Mark Bryan told us that the disability employment gap is higher for people with mental health conditions than people with physical conditions:

Fixing the disability employment gap is a very crude target anyway and there are several different disability employment gaps. You can define the gap according to gender, education level or type of condition. For example, the mental health disability gap, at 35 percentage points, is significantly larger than the physical health disability gap of 25 percentage points. The gap also varies a lot by region. This kind of crude measure does not take account of these things.43

28.The Business Disability Forum (BDF), a non-profit membership organisation, said that people with complex conditions such as deafblindness, speech impairments and severe energy-limiting conditions such as fibromyalgia and ME also face significant barriers to employment.44 We also heard that the disability employment rate can vary within broad impairment groups. The RNID, for example, told us that current data do not capture the variations in employment rates between people with hearing loss. It said:

We do not believe that the ONS currently collects the required data in order to make an informed judgement about the employment opportunities of different people within the group identified within the Labour Force Survey as having ‘difficulty in hearing’. When we refer to deaf people we use that to capture anyone with a hearing loss—from those who have what is clinically defined as a ‘mild’ hearing loss (defined as 25–40db, and means that someone may not be able to hear speech in a noisy environment) to those with a profound hearing loss (hearing at 90+db) and those who would consider themselves culturally Deaf and use British Sign Language as their primary language.45

29.Several witnesses we heard from during our inquiry recommended that the Government should make improvements to how it collects data about employment rates for people with different health conditions or impairments. The National Autistic Society (NAS) has previously called for the ONS to collect data about the number of autistic people in work.46 In July 2019, the Minister told the House that DWP was working with the ONS to add questions on autism to the Labour Force Survey.47 He subsequently said that the ONS had added these questions to LFS interviews carried out from January 2020.48 Giving evidence on 19 May, the Minister could not tell us when this data would be published, but he described the addition of questions on autism as a “positive development”.49 When asked if there were plans to collect more data relating to other specific impairments, he said that the Government plans to explore this through its forthcoming Green Paper and National Strategy for Disabled People.50

30.We welcome the fact that questions about autism have been added to the ONS Labour Force Survey, which will enable the Government to collect more detailed data about autistic people’s experiences of work. The Government should commit to publishing this data as soon as possible. It should also set out how it will collect more data on other impairment groups.

Data collection based on symptom groups

31.The ONS’ Labour Force Survey collects data based on diagnosis or which bodily systems are affected by a particular condition, rather than the symptoms that people experience. Catherine Hale, Founder and Director of the Chronic Illness Inclusion Project, a user-led organisation for people with energy-limiting chronic illness, energy limitation and chronic pain, described this as “an outdated medical model way of looking at disability in groups of disabled people”.51 She said that, according to data from the Family Resources Survey, one in three disabled people experience “impairment of stamina, breathing or fatigue”, and that these symptoms are shared by people with a range of health conditions, including autoimmune and musculoskeletal conditions, respiratory illness, fibromyalgia and long Covid. She recommended that the way data is collected through the LFS should be “redesigned” so that it allows for the collation of data about the employment status of people experiencing this broad category of symptoms, even if they have different diagnoses.52

32.When asked whether the Department would consider collecting data based on symptom groups, the Minister said that it is “always receptive to actively exploring further opportunities to have richer data”. Giving evidence alongside the Minister, Angus Gray, Director for Employers, Health and Inclusive Employment at DWP, said:

On the pure data side, we rely on the ONS labour force survey, so there are sample size limitations to how detailed the breakdown can be, because it is a sample-based methodology survey. But, as the Minister said, we are always keen to have conversations with them and with stakeholders about whether it can be improved. I think there will always be a limit to the specificity you can get to. I suppose there is a more general point about what the individual will most likely identify with and, therefore, answer. I do not have a view on that, but I guess that would be one of the questions you would ask: is that more likely to be easier for them to identify with, symptom-based things or diagnoses?53

33.The ONS’ Labour Force Survey (LFS) is currently unable to capture how people affected by the same broad symptom groups, such as energy limitation, are in employment. This is because the questions in the survey focus on medical diagnosis rather than symptoms. We recommend that DWP should work with the ONS to explore how it can use the LFS to collect employment data about people in groups who are affected by similar symptoms, even if they have different underlying diagnoses. This should include, but not be limited to, people affected by symptoms such energy limitation and stamina impairment, which can span a number of different medical conditions.

Mandatory reporting for employers

34.Some organisations have suggested that requiring employers to publish data on how many or what proportion of their employees are disabled could help to address the disability employment gap. Lord Shinkwin, Chair of the Centre for Social Justice’s Disability Commission, told us that mandatory reporting is “essential” for making progress towards closing the gap, citing the success of gender pay gap reporting. He said:

[Mandatory reporting] is absolutely vital because, as we have seen with mandatory gender pay gap reporting, that has moved the conversation in the boardroom on. […] The transparency and consistency that comes with workforce reporting is essential if we are to make measurable and tangible progress in closing or reducing the disability employment gap.54

35.Some organisations, while supportive of mandatory reporting in principle, stressed that care needs to be taken to ensure that the data it produces is accurate. Martin Sigsworth of the Thomas Pocklington Trust, a charity that supports blind and partially-sighted people, said that requiring employers to publish data on the number of disabled people they employ could help disabled people to identify “which employers do employ disabled people and are walking the walk”.55 He said, however, that some blind and partially-sighted people are reluctant to disclose their condition to their employer, which could affect the accuracy of the data. Rob Geaney of the RNID said that mandatory reporting could be a “useful tool”, but that because hearing loss is a “hidden disability”, not everyone will feel comfortable disclosing their condition to their employer. He said that there is a need to “increase the reporting and disclosure of disability in hearing loss to make sure that that mandatory reporting has value and it does not create false information”.56

36.The “disability pay gap” is a term used to refer to the difference between how much disabled employees are paid, on average, compared to their non-disabled counterparts. The TUC has said that disabled people face “double discrimination” at work: not only are they less likely to be in work, but they are, on average, paid less than their non-disabled colleagues. It found that non-disabled workers earned, on average, £1.65 more per hour than disabled workers in 2019, equivalent to 15.5% more. In 2020, this increased to £2.10 per hour, a difference of 19.6%.57 We heard that requiring large employers to publish data on the gap in pay between their disabled and non-disabled employees could also help to tackle the disability pay gap. Professor Kim Hoque and Professor Nick Bacon, academic researchers specialising in disability employment, argued that:

In addition to reporting the disability prevalence within their workforce, employers should also be required to report the mean and median disability pay gap in hourly pay and bonuses, the proportion of disabled and non-disabled employees receiving a bonus, and the proportion of disabled employees who fall into each pay quartile. This will identify whether disabled people are distributed equally across the organisational hierarchy or whether they cluster into lower level jobs and pay grades.

Disability pay gap reporting should be introduced as an extension of the current regulations on gender pay gap reporting. The government argued that gender pay gap reporting ‘is a key part of building a country that works for everyone’, by breaking down barriers to employment and career progression, thus creating ‘a more modern workforce’. This rationale applies equally to disability pay gap reporting.58

37.We asked the Minister whether the Department had considered requiring employers to publish data on the number of disabled people they employ and how much they are paid, relative to non-disabled employees. He acknowledged that there were “advantages” of requiring employers to publish disability employment data, but he cautioned against requiring employers to publish data on the disability pay gap, as it could risk penalising employers who had taken steps to recruit more disabled employees, but where those staff are in lower-paid entry-level positions. He said:

I did a visit to Foxes Academy in Bridgwater, which is a wonderful organisation that supports young adults with learning disabilities to have independent lives and progress into work. […] They ultimately go on to work in the local restaurants and care homes. Those are predominantly entry-level jobs and, therefore, would be at the lower pay scale. They are not, with all the will in the world, going to be likely to be the chief executives of those companies. There is a danger that if you just did crude disability pay reporting, an organisation that was taking that extra step to be an inclusive employer, to give them opportunities, would then potentially be punished in the disability pay reporting because it would skew the numbers.59

He added: “That does not mean we do not want to do it; it just means we have to tread very carefully”.60

38.Mandatory reporting, which would require employers to publish data about the number of disabled people they employ, could be a highly effective way of holding employers to account and driving forward progress on closing the disability employment gap. This data will only be accurate if employees feel comfortable disclosing their disability or health condition to their employer. Scrutiny of the published data is likely to act as an incentive to employers to create an environment in which people feel able to make those disclosures. We recommend that the Government should require larger employers (those with 250+ employees) to publish data on the proportion of their employees who are disabled.

39.We are not yet persuaded, however, that requiring employers to report data on the “disability pay gap” is the right way forward. We share the Minister’s concern that this data could risk giving a misleading impression of employers who have made genuine progress in recruiting more disabled people, but where those employees are in more junior positions. The disability pay gap, however, remains stark, and in its forthcoming National Strategy for Disabled People, the Government should set out ambitious and timed targets for how it intends to reduce it.