Disability employment gap Contents

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5The disability benefits system

159.Disabled people of working age can claim Employment and Support Allowance (ESA), a benefit paid to people whose disability or health condition limits how much they can work. This is sometimes referred to as contributory or “new style” ESA because people may only claim it if they have paid enough in national insurance contributions. Disabled people can also claim Universal Credit, the Government’s main welfare benefit, which contains an additional disability element. DWP says that, in addition to financial support, ESA provides “support to get back into work” for people who are able to work.271

160.In a February 2021 report for the Social Market Foundation, Time to think again, Matthew Oakley of the Social Market Foundation, a think tank, said that the benefits system is “failing” disabled people, and that the Government should use its Green Paper on health and disability support to set out a new approach.272 Tom Pollard, an independent policy expert who previously worked for DWP, said that the overall caseload for disability benefits (ESA, the equivalent groups in Universal Credit—that is, people who have been assessed as having limited capability for work or work-related activity—and older incapacity benefits) has risen by 12% over the past five years, despite population growth of only 3%. This, he argues, shows that the Government has made “very little progress” in supporting disabled people into work over the past few years.273 The increase is shown in the graph below.

Figure 6: Total caseload of IB, ESA and UC-equivalent, May 2015 - May 2020

Source: Tom Pollard (DEG0003)

161.We heard evidence that, for many people, their experiences of the disability benefits system have had a detrimental impact on their mental health. Catherine Hale, Founder and Director of the Chronic Illness Inclusion Project, said that “the insecurity of the benefit system, the flaws in the assessments, the onerous process of appeals and the frequency of reassessments” leads to many claimants living on a “treadmill of anxiety”.274 Dr Jed Boardman of the Royal College of Psychiatrists said that, during his experience of working with people with serious mental health conditions, many claimants experienced “enormous anxiety” when required to undergo a reassessment which, in some cases, resulted in patients relapsing.275

The Work Capability Assessment

162.People who apply for ESA must undergo a Work Capability Assessment (WCA), which is designed to assess whether they are fit for work or not. Following completion of a WCA, applicants are placed into one of three groups:

• Fit for work: People in this group are deemed to be fit for work and must carry out activity such as looking for work;
• Work-related Activity Group: People in this group have to carry out activity to prepare them for returning to work, for example attending work-focused interviews at a Jobcentre Plus;
• Support Group: People in this group do not have to carry out any work-related activity.

163.Several witnesses who gave evidence to our inquiry criticised the WCA. In his report, Matthew Oakley said that the system of disability benefit assessments, which can require claimants to undergo repeat assessments, has not only created “trauma” but has not reduced the number of disabled people claiming benefits. He said:

At the same time as failing to deliver a reduction in the number of people on disability benefits and the associated costs, the ongoing assessments, reassessments, delays, appeals and subsequent results have caused trauma and upheaval to millions of people, and created an environment of fear and distrust towards the DWP among ill and disabled people, and the organisations representing them.276

164.Professor Dame Carol Black, who carried out an independent review of sickness absence for the Government in 2011, described the WCA as “not fit for purpose”.277 Ben Baumberg Geiger, a Senior Lecturer at the University of Kent, said that the WCA has “fundamental failings” which cannot be addressed “by a bit of tweaking”, and that the process does not capture how claimants’ lives are affected by their health condition or how this relates to their experiences of work.278

165.James Taylor of Scope told us that the WCA can be “anxiety-inducing” for claimants. He said:

We know from many disabled people and colleagues’ research and other research over the years that the WCA is very stressful for people and it is anxiety-inducing. It is often overturned and is taken to tribunal and found in the claimant’s favour most of the time. Therefore we want to see it rebuilt with disabled people at the heart of that policy making and input and sharing their experiences and crucially, as you said, separating financial support from employment support.279

Scope has called for DWP to replace the WCA with a new assessment for determining what financial support ESA claimants are entitled to, with a separate, optional assessment for determining their employment support needs.280 Sarah Rawlings of the MS Society, which supports people with multiple sclerosis, agreed that the WCA should undergo “significant change”, and said that DWP should use its upcoming Green Paper on health and disability support to set out how it will improve it.281

166.Criticism of the WCA has often focused on the fact that a significant proportion of “fit for work” outcomes are overturned on appeal. People who have undergone a WCA can request a Mandatory Reconsideration, which is carried out by the Department; if, following the Mandatory Reconsideration, the claimant is still dissatisfied with the outcome, they may appeal to an independent tribunal. Figures published by DWP in 2019 show that 67% of fit for work outcomes were overturned on appeal.282 Sarah Rawlings told us that people with MS had consistently raised concerns about the “accuracy and quality” of the WCA.283

167.The Minister acknowledged that the WCA system is “not 100% perfect” and that witnesses to our inquiry had made “fair challenges”.284 He told us that the Department plans to explore possible improvements to the WCA in its Green Paper:

We also recognise that the principle of the work capability assessment, a very fair challenge from stakeholders and people who have gone through the process, is that it is almost predicated to identify what you cannot do rather than what you can do, and it also creates perverse incentives within the system for people to then feel that they cannot seek to engage for employment opportunities for fear of potentially losing additional financial support. There are some in-built challenges that need to be reformed. We also need to look at better ways to bring forward earlier conversations to identify the support so they are not necessarily waiting to unlock those additional opportunities through the work capability assessment.

We have a real appetite to have a full and frank conversation with those people who have real lived experience, and again it will be a key part of our health and disability Green Paper. We are receptive to the challenges in this area.285

168.The Work Capability Assessment (WCA) is not fit for purpose. The fact that a majority of appeals against fit for work decisions are successful is evidence that it is not achieving its aim of supporting disabled people who can and want to work into employment. The assessment process can also create anxiety and distress for claimants, pushing them further away from the labour market in the process. We welcome the Minister’s admission that the system is flawed and needs to change, and we plan to look at this issue in more detail in a separate inquiry. We welcome the fact that the Department has now published its Green Paper on health and disability support. It says that it will consider how to address some of the existing problems with the disability benefits system, including whether it can achieve this within the current structure or whether “wider change” is needed. DWP should use this as a starting point to carry out wholesale reform of the WCA.

Sanctions and conditionality

169.People who are assessed as fit for work or placed in the Work-related Activity Group (WRAG) can receive a sanction, which is a deduction from their benefit award, if they do not meet the requirements placed upon them, such as looking for work or undertaking work-related activity (people placed in the Support Group are not required to undertake any work-related activity and therefore do not receive sanctions). In his 2018 report for the think tank Demos, A better WCA is possible, Ben Baumberg Geiger said that over a million disabled benefit claimants have received a sanction since 2010.286

170.Our predecessor Committees considered DWP’s approach to sanctions in two reports, published in 2015 and 2018. In its 2015 report, the Committee found that there was a “lack of evidence for the efficacy of financial sanctions in moving claimants with long-term health conditions and disabilities closer to employment or into work”. It recommended that DWP should test alternative non-financial forms of conditionality and explore alternative models of employment support, such as Individual Placement and Support, for people in vulnerable groups.287 Its successor Committee concluded in 2018 that there was an “urgent need for change” to DWP’s sanctions policy. That Committee recommended that the following groups should be exempt from sanctions:

a)People assessed as having limited capability for work;

b)People who fall outside this group but have an impairment or health condition and a valid Fit Note stating that they are unable to work;

c)Universal Credit claimants who are waiting for a Work Capability Assessment and have a valid Fit Note stating that they are unable to work.288

It also recommended that “the Department explore all options for allowing a warning, instead of a sanction, to be issued in response to any claimant’s first sanctionable failure.”289 In its response, the Government did not accept the Committee’s recommendation that it should exempt these groups from sanctions, but said that it would “explore options further” on how to “engage claimants in provision and conditionality”.290

171.Some organisations have criticised the approach to conditionality for disabled benefit claimants. UNISON, a trade union, expressed concern about the “punitive nature” of the sanctions and conditionality regime.291 Mencap, a charity that supports people with learning disabilities, said that sanctions can push people with learning disabilities away from the labour market and trap them in a “cycle of poverty”.292 Tom Pollard also told us that conditionality had had little impact on claimants’ job outcomes:

Both groups—those who are required and those who are not required to engage with DWP support—had very low job outcomes. You are talking about 4% of the caseload moving into work each year. Clearly conditionality isn’t a deciding factor in whether that support is effective or not.293

172.In his report, Ben Baumberg Geiger referred to evidence suggesting that sanctions “may have zero or even negative impacts on work-related outcomes”. He also said that there is “widespread anecdotal evidence that conditionality and sanctions can lead to anxiety and broader ill health”.294 David Stephenson of Mind, a mental health charity, said that sanctions and conditionality make it more difficult for claimants to “build trusting relationships with jobcentre staff and assessors” and leads to people being afraid of losing their benefits, which can undermine the effectiveness of the system.295

173.The Minister told us that while sanctions can be “an important part of the mix” for some claimants, they should only be used as a “last resort”.296 He said that the Department had taken steps to reduce the use of sanctions by improving how it identifies claimants who may be vulnerable. He recalled that, when he was a member of our predecessor Committee when it conducted an inquiry into sanctions in 2018, sanctions were being applied at a rate of about 4%. He noted that the figure was now much lower, saying:

Pre-Covid it was down to 1.7%. I suspect that will go further by making absolutely sure we are identifying those vulnerable claimants, providing where appropriate that independent advocate support, and having that one last push to try to find a way to build a positive relationship. You can tell I feel very passionate about this. It is a key theme of the health and disability Green Paper coming forward.297

In response to a Parliamentary Question, the Minister for Employment, Mims Davies MP, said that the Department is exploring the option of providing a written warning instead of a sanction for claimants following their first sanctionable failure to attend a Work Search Review.298 The purpose of a Work Search Review is to check whether claimants are meeting any requirements to look for work.

174.In its Green Paper on health and disability support, the Department recognised that some people are “nervous” about engaging with employment support and said that it has “rolled out a new approach to conditionality for disabled people and people with health conditions”.299 This approach applies to ESA claimants in the Work-Related Activity Group, Universal Credit claimants who have been assessed as having Limited Capability for Work, and both ESA and UC claimants who are awaiting a WCA. Under this new approach:

Work coaches have the option of applying no mandatory requirements if they feel this is appropriate for the person’s individual circumstances, but instead are encouraged to set voluntary steps the person could take to move towards or into work. These could include, for example, developing a CV or looking for suitable jobs online. Using their discretion, work coaches apply mandatory requirements only if and when they are needed.300

The Department said that this approach had been shown to be effective when tested, as Work Coaches “were able to apply more tailored activities to help people prepare for and progress in work”. It has now rolled this approach out nationally, “subject to ongoing evaluation”.301

175.Sanctions can have a negative impact not only on disabled people’s employment prospects, but on their overall wellbeing. The Minister told us that the conditionality regime forms part of a “menu of support” and that sanctions are only used as a last resort, but even he acknowledged that it is in “no one’s interest” for a sanction to be applied. We welcome the fact that DWP has very recently adopted a new approach to conditionality, with a focus on voluntary engagement, for some disability benefit claimants. But this change is long overdue. In response to this report, DWP should set out the evidence in support of its new approach, what involvement disabled people had in developing it, and what plans it has to evaluate it. It should also provide its most recent evidence on the impact of sanctions on disabled claimants, including on their mortality, as well as any lessons it has learned from the suspension of the conditionality regime during the coronavirus pandemic. It should also set out in response to this report the action it has taken in response to our predecessor Committees’ reports from 2015 and 2018 on benefit sanctions and their impact on disabled people and people with health conditions, including their recommendations that some groups should be exempt from sanctions and that DWP should explore options for non-financial sanctions and that it explore options for a warning to be issued for a first sanctionable failure. In particular, it should explain what it has done to engage claimants in provision and conditionality, as it undertook to do in 2018. It should commit to reducing the number of disability benefit claimants who are subject to conditionality and decrease the value of sanctions. The Department should only impose sanctions when all other avenues have been exhausted.

DWP’s relationship with disabled people

Issues of trust towards DWP

176.During our inquiry, we heard that DWP is not well trusted by disabled people. Lord Shinkwin, Chair of the Centre for Social Justice Disability Commission, a think tank, and a Conservative Peer in the House of Lords said:

On your final point about Government engagement with disabled people, I am sorry to say, but, as a Conservative parliamentarian, I am mortified by the way that the DWP in particular treats disabled people—who after all are its main stakeholder—with such palpable disrespect.302

He said that the Government’s National Strategy for Disabled People will be received poorly if responsibility for carrying out the strategy sits with DWP:

Sadly, as I mentioned earlier, the PM’s strategy is not going to land well if it is entrusted to the Department for Work and Pensions to take forward. In fact, it will be as good as dead on arrival because not only does the DWP insult its primary stakeholders—disabled people—in many of its communications […] the culture is very much about doing things for disabled people rather than with them.303

Engagement with disabled people

177.We also heard concerns from several witnesses and organisations that the Government’s engagement with disabled people on development of the National Strategy for Disabled People had been poor.304 The RNID told us that it had not seen any evidence of the Cabinet Office, which is home to the cross-government Disability Unit, “engaging in substantive consultation” with disabled people on the Strategy.305 Moreover, the National Autistic Society told us that engagement with disabled people on the Strategy had been “very limited”,306 while UNISON, a trade union with over 200,000 disabled members, told us that it has had no engagement from the Government on development of the Strategy.307

178.In its report, How DWP involves disabled people when developing or evaluating programmes that affect them, the Social Security Advisory Committee (SSAC), an independent body that provides impartial advice on social security, said that the level of trust towards DWP from disabled people had “deteriorated over a period of successive administrations”.308 In meetings with DWP officials, SSAC heard that a lack of trust towards the Department from disabled people was “a major issue; and a barrier not only to joint working but to the effective delivery of their services. SSAC did say, however, that the Department’s intention to engage with disabled people is “genuine”, and that the Department is taking steps to rebuild relationships with disabled people. To help rebuild levels of trust with disabled people, SSAC’s report recommended that the DWP should develop a protocol for engagement which sets out the following seven principles:

• The principle that DWP will engage to the greatest extent possible in the prevailing context; setting out what models of engagement should be adopted in which broad circumstances.
• Principles about feedback and openness, so that disabled people know what they can reasonably expect when they are engaged by DWP.
• Principles for accessibility, so that disabled people with different impairments can have an equal voice.
• What DWP means by co-production and co-design, incorporating steering arrangements that give disabled people an influential say.
• How DWP will engage with different sorts of organisations, ensuring that user-led organisations, including small and local user-led organisations are actively and systematically engaged.
• A discipline for assessing whether DWP is hearing from a sufficiently wide variety of voices across the range of protected characteristics, and how it will proactively seek out people with particular experiences to remedy any gaps, for example people with experiences across the spectrum of different impairments, BAME disabled people with different heritages, homeless disabled people, disabled survivors of domestic violence – learning ways of doing it from best practice in government and in national health and social care organisations.
• A commitment that DWP will routinely provide feedback on the outcomes of engagement in terms of action taken, and engage disabled people in assessing whether changes have worked.309

179.In evidence, we asked the Minister for Disabled People, Justin Tomlinson MP, and John Paul Marks, Director General for Work and Health Services at DWP, whether the Department had accepted SSAC’s recommendation. The Minister told us that he was still “looking at” this issue.310

180.It is encouraging to hear that the Department is beginning to take steps to rebuild its relationship with disabled people. But the Department still has a long way to go. Effective and meaningful engagement with disabled people, when developing policy proposals that will impact them, is one way the Department can rebuild trust with disabled people. We were therefore disappointed to hear that the Department had not accepted the Social Security Advisory Committee’s (SSAC) recommendation that it should introduce a protocol for engaging with disabled people.

181.The evidence we heard suggests that the Department’s engagement with disabled people on developing its National Strategy for Disabled People has been poor. We recommend that the Department immediately accept SSAC’s proposal for a protocol for engaging with disabled people. In response to this report, the Department should set out a timeframe for when it will begin publishing information about its engagement with disabled people.