£30 pound cut is no incentive

In making cuts to out of work disability benefits George Osborne makes wrong assumptions based on flawed ideology, says Ruth Patrick.

Perhaps it could have been a lot worse. In the run-up to George Osborne’s much trailed Emergency Budget there were lots of whispers and hints that disabled people might find their social security support further targeted and cut. Suggestions were made that Disability Living Allowance and Personal Independence Payments could be taxed or means tested; policy possibilities that thankfully were not realised. However, one of the leaked proposals – to reduce the financial support for those in the work-related activity group (WRAG) of Employment and Support Allowance (ESA) – unfortunately did make it into the budget.

From April 2017, all new ESA claimants placed in the WRAG will receive the benefit at the same level to those in receipt of Job Seeker’s Allowance (JSA), an effective cut in support of 30% or £30 per week in terms of current benefit levels. Estimates suggest that this reform will save the government £445 million a year, with almost half a million claimants affected.

In justifying the cut in financial support for those in the WRAG, Osborne spoke of how the current situation can provide perverse incentives that in some, never clearly articulated, way make the transition from ‘welfare’ and into ‘work’ less rather than more likely. He also spoke of how those in the WRAG ‘have health challenges but are capable of taking steps back to work’. Osborne’s policy analysis shows a frighteningly poor, if not deliberately misleading, understanding of the disability policy arena and lived realities for Britain’s disabled population.

Firstly, his rhetoric and policy justification once again suggests that we live in a climate where people make simple and instrumental decisions about whether or not to work, and about which benefit to claim, based on a cost-benefit analysis of which option will leave them best off in financial terms. It implies that individual claimants need the right incentives to be motivated (we might say pushed) into work, and that this cut in support can be justified on this basis. This of course neglects the reality that many people face complex, often structural, barriers to employment that include issues around ongoing disablement in the workplace, the lack of sufficiently flexible employment opportunities and the nature and extent of people’s individual impairments.

Critically, the reform suggests that the problem of disabled people’s non-work can be located with individual claimants themselves, and therefore be addressed by making changes to the incentive structure. As Paul Farmer, Chief Executive of Mind argues: “It is insulting and misguided to imply that ill and disabled people on ESA will be more likely to move into work if their benefits are cut. The vast majority of people with mental health problems want to work but face significant barriers as a result of the impact of their condition and the stigma they often face from employers.

What is more, Osborne’s approach misleadingly suggests that people in the WRAG are capable of moving into paid employment when in fact many are instead living with serious and chronic health issues, issues which sometimes even Work Programme and Job Centre advisers accept make an immediate (or even medium term) move into employment simply unfeasible. In being awarded ESA and placed in the WRAG, claimants have in fact been judged to have ‘limited capability to work’, with paid work seen as achievable ‘at some point in the future’, not at the current time, something which Osborne seems intent on ignoring.

Based on poor policy making, this reform will see those struggling to get by on the WRAG of ESA significantly worse off. The extra payment to those in the WRAG of ESA up to now served as a recognition of some of the extra costs associated with impairment(s), as well as the fact that people tend to spend much longer on ESA than on JSA. Figures show that 60% of those on JSA move off it within six months, while a similar percentage of those in the WRAG need the support for at least two years. Managing on a low-income gets harder the longer you have to do it, and this reform will make that work even more difficult for those in the WRAG.

Speaking to Disability Now about the cut, Kaliya Franklin, Co-development lead of People First England explained:

“Disabled people have far greater expenses and barriers to work than jobseekers who are not disabled. Moving into work requires enough time away from work for people to be able to stabilise their conditions and learn to manage life as a disabled person before being able to seek employment. A vital part of that is the ability to fund the additional costs of disability. Removing that funding simply creates further barriers to a full life, increases deprivation and exclusion. What is needed is long-term security of support so that people can try to enter the workplace from a stable platform.”

Flagging up the particular dangers of the reform for learning disabled adults, Kaliya continued:
“Many of those in the WRAG have a learning disability. Despite being one of the most motivated groups of jobseekers only 7% of learning disabled adults have achieved paid employment. Making this group poorer does nothing to improve their job prospects.”

Franklin’s point has a wider resonance. Reducing the income of all new claimants in the WRAG will increase their poverty, but do nothing to improve their chances of moving into employment, if anything making the likelihood of such a transition less rather than more likely. It is short-sighted policy making light on evidence and grounded in incorrect assumptions about the relationships between disability, benefit receipt and motivations to work.

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