The role of incapacity benefit reassessment in helping claimants into employment - Work and Pensions Committee Contents


Written evidence submitted by Professor Paul Gregg

In 2008 the previous Labour government introduced a new benefit for the sick and disabled called the Employment Support Allowance (ESA). The new benefit replaced two existing benefits for new claims on its introduction but at its heart were two major differences. First, was a new test called the Work Capability Assessment (WCA), to determine eligibility for the benefit and for the majority of claimants, called the Work Related Activity Group (WRAG) there was to be a new regime of personalised support and engagement to help people back to work (which I designed). The new regime initially applied only to new claimants but this week existing claimants are starting to be re-tested under the new WCA test and may potentially be reclassified as Fit for Work.

There are two major reasons why getting this transition process right is critical. First, this is a large and vulnerable group and thus the introduction of the new benefit eligibility test has the potential to cause huge anxiety and distress to people. Many, especially those with mental health problems, may well fall into the sizable crack between ESA and JSA (unemployment benefit) and end up destitute, homeless or worse. Second, those denied access to the benefit are likely to end up on unemployment benefits which are not designed to help sick people back to work. Under the new Work Programme providers are paid to get claimants into sustained work are divided into three groups, the first are mainly adult unemployed who receive help after 12 months claiming benefits. Here the payment to a provider for getting them into work for a year will be of the order of £3,500. Those "being found fit for work" and hence signing on as unemployed rather than disabled will normally be allocated to this group, although if they were previously claiming Incapacity Benefit they will get the help after three months. For those on ESA the package of support starts immediately and providers will be paid about £14,000 if they get someone into work for two years. Getting the sick and disabled in the right category thus matters greatly in terms of the chances of helping them into work. Those on unemployment benefits with significant barriers to work may well be ignored by providers as offering little hope of a pay off given the high investment needed to get them back to work.

Given the imperative of getting people into the right category, common sense would suggest the Government should move slowly and check at each stage that any changes were working. So starting with new claimants makes sense and a five year review process was specified in the original legislation I believe. Yet the developments so far have been deeply flawed. Concerns with the WCA test emerged in late 2009-early 2010 with strong reports of major problems, especially around individuals with cancer, mental health problems and variable conditions. It also emerged that a huge number of cases were going to appeal, jamming the system, and often being overturned. The Government responded with changes to address these issues, but there were no subsequent checks that the problems had been dealt with. In fact, the cries of anguish continued unabated. In the summer of 2010, Prof. Malcolm Harrington was commissioned to undertake the first major review and it was quickly apparent that he saw the need for extensive changes to the process of the decision making after the test was undertaken. Furthermore, the DWP was also internally reviewing the medical test. Yet the first trial of the WCA test on existing disability claimants went ahead in Burnley and Aberdeen on the old test and the old decision process. So now as the medical test goes national the new regime outlined by Harrington and the DWP internal review is being implemented with no prior testing. The Government claims these changes have fixed the earlier problem and undoubtedly the Harrington Review will have made a difference, but surely it should be tested and checked before being applied nationally. It is baffling why the trials in Burnley and Aberdeen were not delayed just four months to test run the new regime. Likewise it is clearly essential to track the progress of those denied access to the new benefit, especially among those previously claiming Incapacity Benefits, to study what is happening to them. Are they moving to JSA, getting jobs or suffering acute deprivation without any financial support? By tracking people according to what conditions they are presenting with, we can assess which conditions are not being picked up well, if groups fail to move into work. But again no such research or tracking is apparently being undertaken.

The process seems to have been characterised by undue haste, a lack of testing and immediate assessment. It may be that this derives from a view that those denied benefit will be healthy and undeserving of support, rather than emphasising the risk of vulnerable people being treated inappropriately. This has become an interactive process of changes being followed by a chorus of complaints, revision, a wait to see if complaints diminish, and further revision when they don't. The current national roll out will not be the end regime but just the latest iteration in my view. This is no way to introduce such a fundamental reform affecting so many vulnerable people.

March 2011


 
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Prepared 26 July 2011