Publication Social security 10 December, 2015

Employment and Support Allowance: the case for change

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Improving outcomes for disabled people is one of the UK’s key unmet policy challenges. Economic growth and the policy interventions of successive governments have been successful in reducing other benefit caseloads: the number of unemployment claims is well below the peaks of the 1980s and early 1990s, and lone-parent claims have halved since the mid-1990s. In contrast, the out-of-work incapacity-related benefit caseload peaked in the early 2000s and has remained essentially unchanged since. Some 2.4 million people are claiming: fully triple the number claiming at the end of the 1970s.

Unconditional support for those who are deemed, due to incapacity, unable to work or carry out any work-related activity is a key principle of the welfare state. For many of those claiming sickness and disability benefits, however, the evidence suggests the system is doing more harm than good. Given the well-evidenced benefits of work, including for many sick and disabled people, and that labour market detachment increases over time, the high number of people claiming out-of-work incapacity-related benefits long term is bad for individuals, society and the economy.

Like other countries, the UK has taken measures to change this. In 2006, the then Government’s green paper A New Deal for Welfare stated its aim was to “reduce by one million the number on incapacity benefits.” The replacement of Incapacity Benefit (IB) with Employment and Support Allowance (ESA) in 2008 was designed to reduce the number being ‘parked’ on these benefits. The introduction of the Work Programme in 2011, consolidating almost all welfare-to-work programmes into a single scheme, was designed to help people with a health condition enter and keep jobs. Despite these changes, progress in tackling the high caseload and long-term nature of the benefit has been limited. There are still 2.3 million working-age people claiming ESA, of which 1.3 million are in the support group and therefore not subject to any conditionality or receiving any support. Introduced just seven years ago, there are already more than one million people who have been claiming the benefit for more than two years.

A job brings many important financial and non-financial benefits. Employment not only provides a source of income, but can improve social inclusion, build self-esteem and improve an individual’s physical and mental health. In a survey of ESA claimants, 62 per cent of ESA work-related activity group (WRAG) claimants and 52 per cent of ESA support group claimants surveyed said they “currently want to work.” Instead, millions of working-age people have been left stranded on benefits, detached from the labour market and the benefits of employment.

The Government has made a commitment to halve the disability employment gap. The Conservative Party manifesto stated: “we will transform policy, practice and public attitudes, so that hundreds of thousands more disabled people who can and want to be in work find employment.” This means helping around one million more disabled people into work – a formidable challenge. Crucial to this will be redesigning the out-of-work incapacity-related benefit system to assist more claimants back into sustainable employment.

Interview with Ed Holmes, Senior Researcher