Select Committee on Work and Pensions Appendices to the Minutes of Evidence


APPENDIX 4

Memorandum submitted by the Institute of Industrial and Commercial Law, Staffordshire University (ES 08)

INTRODUCTION: THE INSTITUTE OF INDUSTRIAL AND COMMERCIAL LAW

  1. The Institute of Industrial and Commercial law (IICL) is based within the Law School, Staffordshire University, Leek Road, Stoke-on-Trent Staffs ST4 2DF. The Institute has extensive links with industry organisations, including trades unions, employers' organisations, charities, research bodies, and other organisations with interests in employment, workplace, and industry/business issues. In addition to its research role the IICL organises and hosts seminars, workshops, and conferences on current issues—including those relating to employment law and policy.

  2. Its two most recent conferences, Fairness at Work and Disability, Welfare and Work—From Rhetoric to Rights?, have been on themes which are relevant to the committee's inquiry, including employment law reforms, the role of State in-work welfare for those who might otherwise be unemployed, and support through interventions in the employment relationship to counter the effects of discrimination—for example against groups like the disabled, incapacitated, and those working part-time. The Disability, Welfare and Work conference on 17 January 2002 was attended by 200 participants, including representatives of the trades unions, the CBI, and employers' organisations, and by many from advice and disability organisations and specialist law firms with interests in disability and welfare. The main issues considered were the continuing problems of lack of "security" among disabled people; the difficulties faced by those who are disabled or who have been incapacitated in entering or re-entering the jobs market; the working conditions of disabled and incapacitated workers, including State support and employment rights; and the need for modernisation and improvements to the Disability Discrimination Act 1995 to secure welfare-to-work objectives and enhance the quality of life of workers with disabilities.

  3. The conference was Chaired by Richard Exell, Senior Adviser at the Trades Union Congress and a Commissioner on the Disability Rights Commission. Main speakers were Lorna Reith, Chief Executive of the Disability Alliance; Martin Barnes, Director of the Child Poverty Action Group; Keith Puttick, Director of the IICL, author of Welfare Benefits (EMIS Professional Publishing, 8 Edition, 2002), Editor of the bimonthly Welfare Benefits, and a co-author of Employment Rights (Pluto Press, 2 Edition); and Catherine Casserley, Legal Officer of the Royal National Institute for the Blind and an author of Law, Rights and Disability (JKP, 2000) (who is also a Senior Legislation Officer with the Disability Rights Commission). Subsequent IICL Seminars have been held (or are due to be held shortly) on a number of related themes that are relevant to the committee's inquiry, including the Employment Bill 2002 and Dismissal Procedures (led by Prof. Richard Painter); Family-Friendly Policies (led by Mark Bainbridge, Senior Solicitor at Thompsons Solicitors; and Part-Time, Fixed-Term, and Atypical Workers' Rights (led by Keith Puttick, Solicitor and Director, IICL); and Working Time (led by Isabel Hancock, Partner in Knight and Sons, Solicitors).

SUMMARY OF EVIDENCE

  4. In summary, the main thrust of this evidence to the committee, which has in part been informed by such debates, is that despite improvements to the welfare and employment law regimes in recent years, and notwithstanding some of the very positive features of New Labour's Fairness at Work policies and the New Deal schemes, the current welfare and employment law systems continue to fail to meet the needs of many working people and their dependants. This is particularly the case among those in vulnerable groups that remain on the edges of the labour market, and for whom the welfare system, including welfare-led interventions into wages and other aspects of the employment relationship, continues to fail to offer an acceptable quality of life or level of "security". This, it is suggested, is particularly problematical in an era where the centrepiece of government policy is that "work is the best form of welfare".

  5. The view expressed by most organisations and individuals at the January 2002 Disability, Welfare and Work conference (who may, no doubt, be making their own representations to the committee) could probably be summed up as "there is still much to be done" by the government and by Department of Work and Pensions policy-makers. In particular there has been a failure to deliver on the core policy objectives of providing "security" for those unable to work, while at the same time removing the "barriers" to employment and the provision of the kind of work that might give welfare claimants and low-paid workers improved life chances and opportunities for financial security. These were, after all, the basic promises made in the government's New Welfare Contract, as part of the blue-print for reform New Ambitions for Our Country: A New Contract for Welfare, (1998, Cm 3805). The commitments were repeated again, in large measure, in last year's general election manifesto.

  6. Current welfare and employment policies are, in particular, failing to deliver for the many low-paid workers straddle the divide between State welfare and paid employment, and who therefore remain in many cases reliant on State welfare systems to keep them and their dependants out of poverty. At a time of economic downturn these are precisely the areas of the labour market that tend to be the first to be hit. In many instances, unfortunately, there are still significant numbers of child dependants in Britain who are in poverty, even on the government's own preferred definitions of "poverty", as organisations like the Child Poverty Action Group have pointed out this month.

MAIN EVIDENCE

"Work" and "Welfare"

  7. At the outset I would make the general point that the economic downturn is highlighting how a policy that makes "work" the cornerstone of welfare objectives is bound to fail if it is not accompanied by an adequate and responsive benefits "safety-net", as well as an adequate employment law regime that enables workplace rights to be asserted and enforced. This becomes clear when the "work" element of the wage-work package fails, or it is interrupted by dismissal, including dismissal for redundancy. In many instances action short of dismissal affects income—notably in the aftermath of reduced hours, less overtime, lay-offs, and other action linked to workplace reorganisations such as transfers to other (less well-paid) employment. On the employment side of the welfare-work interface it is clear from research that the IICL is currently involved in that employers are often simply not aware of their responsibilities—for example duties to pay wages, or to co-operate in the process of assisting a worker to access key benefits like Working Families Tax Credit, and Disabled Person's Tax Credit (for example in the aftermath of reduced hours, an accident, incapacity leading to re deployment, etc). Employers in many instances, we believe, are also unaware of basic duties owed to part-time workers and workers with disabilities—for example the duty to make "reasonable adjustments" to their working conditions rather than simply proceeding to dismiss them for "incapacity". In many cases, of course, workers affected by reduced working and downturns are often unaware of their legal rights vis-a"-vis their employer. Even where they are aware of them, and they obtain advice, as recent views of the National Association of Citizens' Advice Bureaux have confirmed, current employment law mechanisms for asserting such rights are seriously deficient.

  8. On the "welfare" side, in many key respects the benefits system simply does not have the ability to respond quickly enough to reduced or fluctuating working hours and income, and other changes precipitated by business downturns such as lay-off. This is a theme below in this evidence in discussing the difficulties Tax Credits claimants face. I also address the point in my accompanying paper Disability, Incapacity and Employment Rights in the Welfare-to-Work Era. The main reason for this, of course, is that a system that what designed to address, primarily, the needs of out-of-work claimants has been expected to perform an in-work welfare role for millions of part-time and low-paid workers. Quite simply the welfare system has not been updated or modernised to perform the much more demanding functions demanded of it since the inception of welfare-to-work policies in the 1990s, and in its role in supporting "entry-level" employment and low-paid employment in general. The Tax Credits Act 2002 will represent, in my view, the first serious attempt to address the sizeable problems that face the State welfare system in its transition to supporting active labour market policies.

The Need for a "Responsive" Benefits System

  9. In the context of part-time workers who are working below the 16-hours a week threshold, and who thus depend on benefits like Income Support, income-based JSA, and passported benefits, including Children Act 1989 s.17 payments (to meet the requirements of children with special needs through local authority assessments and support), the current lack of "responsiveness" associated with such benefits ought to be, I respectfully suggest to the committee, a major concern. In particular, what should happen when a means-tested weekly benefit like IS is paid to workers in part-time employment, or whose employment is affected by illness, reduced hours, etc, is that following notification of the change of circumstances, ie reduced hours and income, the system should provide for a re-assessment of the award—and usually an increase in the level at which benefit is paid. This is generally also the case with Housing Benefit, except that the worker will already be getting "maximum HB" while he or she is on IS or income-based JSA. Similarly, where there is an increase in hours a common concern is where the increase leads to potential ineligibility for IS or JSA as an in-work benefit because the average hours rise above 16. In this case it is quite common for working claimants to experience significant problems pending clarification of eligibility, and the need to make claims for Tax Credits to the Inland Revenue. At the heart of the problem is the current distinction, still employed at the inter-face between IS/JSA and the Tax Credits system of the definition of "remunerative employment". For workers whose hours (and earnings) fluctuate while they are claiming Tax Credits the system at present is hopeless—an issue which I address again later (in para. 15 below).

  10. On the issue of "responsiveness" I would go further and say that when the new "simplified" Child Support system comes on stream later this year (once the DWP/CSA IT and software problems are sorted out), it will be essential for the new system to address the potentially serious problems that could be faced by low-paid workers working on "flexible" working terms, zero hours contracts, etc, who will need to have the support of a Child Support and benefits regime that is fast, efficient, and responsive to changing levels of income. This will be the case whether it is the parent with care/payee who is in the system as a "s.6" person, but who may at the same time be working as she is claiming IS; or if it is the non-resident parent/payer affected by changes in earned income. Either way there is a serious danger, I believe, that many of the positive features of "simplification" will be lost unless the reforms are accompanied by radical action to address the problems of delays in making adjustments to means-tested benefits as earned income levels change.

  11. The committee has stated in its terms of reference that it "intends to inquire into the employment assistance available to people of working age claiming benefits other than JSA". This is an area of the State welfare system that is, of course, pivotal in securing the objectives of welfare-to-work which the government has set itself. Yet it is an area in which there are still some significant shortcomings. Benefits systems other than JSA that could be operating in ways to sustain paid employment, and maintain the qualitative side of employment, are failing to meet their objectives for a variety of reasons. The point can be illustrated by reference to a number of key benefits, as detailed in paras.12-18 that follow, starting with Disability Living Allowance (DLA).

Disability Living Allowance

  12. DLA is both an out-of-work/disability benefit and an in-work benefits (which in the latter case, in principle, should be assisting disabled workers to meet the additional costs of employment they face). Yet it is a difficult benefit to access, with labyrinthine claims and adjudication procedures—thus making it a complex and often highly inaccessible source of support for many disabled people. In my submission most of the problems with DLA are "structural" in the sense that the eligibility criteria in s.72 of the Social Security Contributions and Benefits Act are not only inherently complex, they also make it difficult or indeed impossible for some categories of disabled claimant to "fit" within its terms. In some key areas of disability, for example in relation to sight and hearing, it is only relatively recently that creative judicial interpretation by the House of Lords in leading cases like Mallinson v Secretary of State for Social Security (1994) and Secretary of State for Social Security v Halliday (aka Fairey) (1997) have made it easier for such groups to access assistance and financial support. In too many cases success in claiming DLA is something of a "lottery". This was the conclusion of detailed research conducted by the Royal National Institute for Deaf People. A more detailed analysis and discussion of the findings is provided in an article by the RNID's Welfare Benefits Policy Officer, Duleep Allirajah How the DLA System is Failing Deaf People in Welfare Benefits Vol. 9 Issue 1 (April 2002).

  13. Recent changes made to the DLA Regulations have also made it a less accessible benefit for some groups, notably that sizeable section of the population who suffer from psychological disorders. This group includes within its ranks those whose condition entails anxiety and stress when they are out of doors. The government having (controversially) decided to press ahead with changes to the eligibility criteria for Disability Living Allowance Mobility Component in relation to claimants who base their claim on s.73(1)(d) of the Social Security Contributions and Benefits Act 1992, have made new regulations, operational since 8 April 2002, whereby a new reg.12(6) of the Social Security (DLA) Regulations 1991, SI 1991/2890 prevents a claimant qualifying for DLA on "fear and anxiety" terms unless their condition of a severe mental disability. This is a change which has obviously reduced assistance for a potentially large number of people in Britain with phobias and other psychological disorders that fall short of "severe" illness, and who would otherwise have gained valuable financial assistance through the DLA system to support the on-costs of employment. But it has also, of course, reduced access to it among those who are not working, and who will therefore have a reduced quality of life.

  14. For claimants receiving DLA there is currently another serious "problem area" with implications for employment policy as it presents yet another significant disincentive for taking up work options, and which I believe the committee needs to consider. This is the problem that can arise when a DLA claimant reports that he or she is considering taking up employment, or has attended interview, or has been offered employment. In most instances claimant appear to be subject to a routine procedure whereby they receive a notification requiring them to attend a medical examination. At that point there is obviously a concern on the part of the claimant about the implications of attending such a medical and, of course, "failing" it. Many claimants have also expressed concerns about the rough and ready manner in which this process takes place, and the absence of sufficient advice as to "what happens next", or on work and welfare options—and the implications of taking up work. There is also a suspicion among DLA claimants and many advisers that DWP decision-makers seem to readily assume that that ability to take up paid employment is synonymous with inability to fulfil DLA eligibility criteria. Needless to say this is not so. In too many cases decision-makers are being found to have acted precipitately in the way they manage medical examination procedures and the linked powers they have to suspend DLA from benefit—as illustrated by cases like CDLA/2335/2001 (150/01*); Welfare Benefits Vol. 9 (April 2002) Issue 1. In that case it was held that in the particular circumstances of the case the refusal of the claimant to attend a medical examination, following notification that he was about to take up therapeutic work ("Permitted Work" from April 2002) should not have led to suspension of his benefit. I suggest that this is an area where the Department needs to review its procedures.

Maternity Allowance

  15. Another important benefit (other than JSA) which, in theory, assists both working and unemployed claimants is Maternity Allowance (MA). As a result of useful changes made by the Social Security (Maternity Allowance) (Earnings) Regulations 2000 and the Welfare Reform and Pensions Act 1999 this benefit is now more accessible by women—particularly those who are unable to claim Statutory Maternity Pay (usually because their earnings are below the Lower Earnings Limit for NI contributions, or because they do not have "employee" status). The new criterion for MA is that the claimant must be earning at least £30 a week and have been working for a 26 weeks period. Unfortunately, however, there are many women who in practice do not access this benefit, even on the new terms, for a variety of reasons. One reason is the uncertainty whether qualifying employment conditions have been met, particularly when a woman works in casual employment or on flexible terms—something which is not uncommon in many areas of the labour market at present. Another reason is the need to produce proof of earnings before DWP decision-makers award the benefit—something which many women have difficulty in doing, particularly if they are working in casual employment and in the so-called "black economy" where employers are reluctant to produce such evidence when staff ask for it. Both these difficult hurdles have been discussed by Joanna Wade, Solicitor and Legal Officer with the Maternity Alliance (and a partner in Palmer Wade) in an article Maternity and Parental Rights for the New Millenium in Welfare Benefits Vol. 8 Issue 5. She has also written on the subject in her new edition of Maternity and Parental Rights—A Guide to parents Legal Rights at Work (Legal Action Group/Maternity Alliance (2001).

Working Families Tax Credit and Disabled Person's Tax Credit

  16. Notwithstanding many of the important improvements made to the Family Credit system by the introduction of the Working Families Tax Credit (WFTC) and the Disabled Person's Tax Credit (DPTC), I suggest there are a number of facets to the system which have a significant bearing on the committee's inquiry. There are a considerable number of workers (mostly women) whose entitlement to WFTC or DPTC is only just satisfied given that their award by the Inland Revenue is based on an average of 16 hours a week employment, as assessed at the start of the 26-week period—and this often produced an average of little more than 18 hours. There is considerable anecdotal evidence in areas like our own in the Midlands that such women, as a result of a "slow-down" in industries in the region, are finding that as their hours are cut they experience significant problems when they become ineligible for Tax Credits support, and no longer enjoy the positive features of that benefit. Our experience of this in the last six months suggests that such claimants, having come off WFTC or DPTC, may well exit the labour market altogether at that point, or soon after. Those who do not leave their part-time job may, of course, have access to Income Support (if they are parents of school-age children, disabled, or within other IS prescribed categories) or else income-based JSA. In some cases this may be beneficial—for example in that it will give enable them to access full Housing Benefit, or if they have a mortgage access to IS mortgage interest costs (after a lengthy wait of up to 39 weeks), and other passported benefits. For parents with children who have special needs another "spin off" is potential access to Children Act 1989, s.17 payments if they are on benefits like IS. But the effects of coming out of Tax Credits produce a double-edged sword. Among the various negative effects are that child maintenance/child support will revert to being "income" in the IS/JSA claimant's hands, thereby reducing the value of their overall household income. In some instances even where there has been a separation during the currency of a WFTC award, notwithstanding that the husband/male partner had left the family home it is often the case that he may continue to receive the full value of the WFTC award for a lengthy period before the Inland Revenue stops payments or the award or it ends by week 26. In the meantime, the wife/female partner can often experience reduced hours and income. The welfare system's lack of responsiveness in assisting women and dependant children in the context of reduced earned income has to be a major issue for the committee, and is something that highlights the apparent inability of the key elements of the welfare system like the Social Fund to plug the gaps when earnings and Tax Credits fail to deliver income.

  17. There are a number of points that emerged from the preliminary stages of a research exercise the IICL started earlier this year. We were looking at the effects on household income in three types of case (as a "trial" exercise ahead of a longer-term project that is examining the effects of the welfare and employment law systems in sustaining paid employment). The first case considered involved looking at the effects of the transition from WFTC to IS when hours were cut; the second considered the support from the welfare and employment systems when the claimant was made redundant, but experienced delays in getting final wages and statutory/contractual compensation; and the third examined the impact on income when the claimant did not return to paid employment (that had previously been supported by WFTC) following maternity leave. We concluded that the effects produced a "mixed bag" of positive and negative effects, much of them unpredictable. The loss of "earned income" from the contractual element of the worker's wages was obviously a common and negative factor in each case, as was the loss of the more favourable support given for work-related costs like childcare. In several instances person concerned missed the companionship and company which they had enjoyed in their employment.

  18. I respectfully suggest that, as the new Working Tax Credit is being introduced, it will be necessary for the Department of Work and Pensions, and your committee, to take into account a number of negative features currently associated with the WFTC and DPTC systems. Otherwise the danger is, of course, that many of the "lessons" to be learnt from the problems with the present system—as it has been adapted from Family Credit—will not have been learnt. Among other things this includes the fundamental requirement which is that the system must be able to respond quickly and effectively to fluctuating changes in "income" during award periods. At present the value of the WFTC or DPTC award is fixed at the start of the 26 weeks, and is based on information available to the Inland Revenue at the front end of the award. In the context of a flexible labour market which in some industries at present is producing a "downward escalator" effect for WFTC and DPTC claimants, in terms of income, it is essential that a system is created that facilitates timely responses to reduced income. At present the situation for many claimants is that income may go down soon after the start of the 26 weeks award period. Typically there will be increased childcare costs, for example, in school holidays; or there may simply be less earnings. In the context of the economic downturn our evidence to the committee is that there are many WFTC and DPTC claimants who are likely to be experiencing a significant drop in both hours, earnings, opportunities for overtime, etc. The current inflexibility of the system means that during the 26-week award period the award cannot be re-opened; and other benefits that might assist are not available.

The Employment Law Side of "Welfare" and "Work"

  19. On the employment law side of the welfare-work interface government policy is, in my submission, currently caught between two very "hard places". On the one hand the government has espoused the virtues of the "flexible labour market". Indeed in some respects it appears to be going further and even looking to de-regulate current well-established features of the employment law system—for example by introducing the new and arguably, in some respects, lower standards, for example in relation to minimum unfair dismissal procedures in the Employment Bill 2002; and in measures that appear to be seeking to reduce access to employment tribunals. On the other hand the government continues to reiterate its promises of "security", acceptable standards of welfare at work, and policies to "make work pay", to key groups like the disabled, incapacitated, lone parents, and others. Our contention is that if "work" is, indeed, the cornerstone of the modern welfare system, and is to be truly "the best form of welfare", then not only must more be done to make work pay—but the other qualitative aspects of the work experience, including job security and other basic features, need to be addressed as part of that strategy. This is also necessary if the government is to realise its objectives for "retention" of employment among groups like the incapacitated claiming either Statutory Sick Pay, in-work Incapacity Benefit, or Income Support as incapacitated or disabled workers and who are, at present, leaving the labour market in large numbers. Part of the problem, as I have pointed out in my presentation to the Disability, Welfare and Work conference, appears to be a lack of co-ordination between the Department of Work and other sections of the government with lead responsibilities for welfare and work, such as the DTI and Cabinet Office.

  20. In practice there remains a significant deficit between what is being set, in terms of welfare-to-work and work-to-welfare and employment "retention" policy objectives, and what is being attained. For part-time workers working below the normal 16-hour threshold that defines "remunerative employment" for welfare purposes, there remain few incentives to take up and engage in paid employment. Workers who do so are in many cases no better off (and often much worse off because of the costs and on-costs of employment) than if they were claiming benefits like Income Support and JSA income-based while not working. As the Royal College of Nurses has said (a group represented at our conference) it is, in any case, a disgrace that professionally qualified workers should be in the position of dependency on State in-work benefits: particularly when they are paid at such a low level, and when there is no distinction made between a working claimant (such as an agency worker) and a non-working claimant. In a number of key respects the in-work welfare system, as it applies to those working below or near to the 16-hour threshold, is failing dismally to meet the needs of workers and their dependants. A good illustration of this recently has been the House of Lords case of Banks v Chief Adjudication Officer, 28 June 2001; Welfare Benefits Vol. 8 Issue 4, p.8. In that case it was held that a classroom assistant was working above the permitted hours that would enable him to claim JSA; but on the basis of complex criteria that plainly represent a massive injustice for such groups. Despite calls by the Lords to the government to review the JSA/Income Support scheme in this important area, which impacts on the welfare of many thousands of part-time workers, little appears to have been done to date. For workers above the 16-hour threshold the position is better, but still fraught with difficulties. For example, the Tax Credits system has a variety of disincentives and problems that will have to be addressed by the Tax Credits Bill 2002—and current indications are that many of the reforms required, including reform of the Housing Benefit system. A sharp reduction in State support for housing costs when people make the transition to low-paid employment of more than 16 hours a week is but one of the areas of concern.

  21. In the context of the economic slowdown, when employers are increasingly looking to reduce operating costs, another concern is that the present employment protection framework is starting to look increasingly inadequate. Vulnerable groups like the disabled, and part-time workers, are often in the front line for redundancy and lay-off. The inadequacies of key legislation are becoming very apparent in the last six months or so. In particular I would highlight the inability of the present employment law regime to offer acceptable standards of job protection or recompense for the effects of discrimination, unfair treatment or dismissal, etc. It is also possible to identify some of the weaker elements of the system in this respect, including the following measures:

    —  the Part-Time Workers (Prevention of Less Favourable Treatment Regulations 2000;

    —  the Employment Bill 2002 the Disability Discrimination Act 1995 (the DDA);

    redundancy procedures in the Employment Rights Act 1996;

    —  the lack of adequate protection of disabled workers from harassment, and action designed by some employers to try to force disabled people out of their employment: a position not assisted by the government's failure to respond to a judicial decision that has construed the DDA as not providing workers with the right to bring proceedings for "constructive dismissal"; and

    —  Forthcoming legislation on workers with fixed-term contracts (the draft Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002).

  22. In the case of the DDA, I would bring to the committee's attention a number of concerns that plainly impact on disabled workers during periods of economic slowdown when such workers are particularly prone to discriminatory treatment by employers seeking to reduce operating costs and shed labour. These concerns are considered more fully in the enclosed conference paper Disability, Incapacity and Employment Rights in the Welfare-to-Work Era.(Conference Paper, 17 January 2002). This links suggested shortcomings on the welfare benefits side of welfare-to-work to welfare-to-work schemes such as Access to Work, the new "Permitted Work" scheme for claimants who are in receipt of Incapacity Benefit and other incapacity-related benefits, and support through the Community Care system for job rehabilitation. Beyond that, I suggest that we currently have an employment law system that consistently fails to deliver adequate standards of in-work welfare and job security for vulnerable groups like the disabled and workers who have been incapacitated as a result of accidents and illness.

  23. In the accompanying paper I have developed this point further, and singled out a number of more specific issues which I believe are relevant to the committee's inquiry. Among other things the paper highlights concerns with the present welfare-employment law framework, and discusses:

    —  government policy at the "welfare" and "work" interface, and concerns that the needs of "flexibility" are being placed too far ahead of the welfare aspects of employment;

    —  quality of work, dignity at work, and the changing role of in-work State benefits;

    —  a critique of recent proposals, made by the Cabinet Office, for reforming disability rights legislation including the Disability Discrimination Act 1995 (echoing concerns expressed in the January 2002 conference speeches and workshops about the problems with the 1995 Act); and

    —  suggested areas in which reforms are needed to employment law if "retention" and welfare-at-work policies are to be realised, and "welfare at work" objectives are to be realised.

  24. Finally I suggest there are a number of issues for the committee's consideration relating to the current system for determining "incapacity". This is no doubt a hugely important area of government policy on "welfare", and has been for some while—and certainly since reform proposals were mooted ahead of the Welfare Reform and Pensions Act 1999, as highlighted in the article written by two Ministers, Stephen Timms and Hugh Bayley The Government's Proposals for Reforming Disability Benefits in Welfare Benefits Vol. 6 Issue 3, pp.28 et seq. No doubt this also remains an on-going issue for the House of Commons Work and Pensions Committee. Whilst the process of determining "incapacity" within the current Personal Capability Assessment system is primarily designed to serve the needs of the welfare benefits system—and not doing it very well—it is also the case, I suggest, a process that is significant in the wider welfare-to-work and employment area. Incapacity Benefit, and the procedures that accompany it for determining eligibility, is plainly failing to serve the requirements of welfare-to-work programmes, in-work as well as out-of-work claimants' needs, and the wider public interest. For example, all the evidence suggests that there are too many IB claimants who, having failed the Personal Capability Assessment (often by the application of criteria and procedures that do not command much support and credibility), do not then benefit from much in the way of follow-up support in making the transition from out-of-work benefits like JSA, IB, and IS to "work". In many cases, as recent DWP research has confirmed, such claimants are not receiving adequate advice on welfare and work options. Consequently the incentives to "appeal" incapacity decisions is considerable, particularly when claimants face an uncertain period in the aftermath of failing the PCA. In the context of a reduction in available employment opportunities, as a result of the downturn, I believe it has become all the more important that a lot more is done by Personal Advisers and the New Deal programmes to meet the special needs of vulnerable groups like this.

Thank you for your kind attention, and for your consideration of this evidence.

Keith Puttick

Director

12 April 2002


 
previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 31 July 2002