Disability benefits system review: the devil is in the detail

Policy in Practice was invited to the Prime Minister’s launch of further reforms to the benefits system today. The event covered changes to how people are assessed as being too sick to work.
Rishi Sunak focused his speech on the importance of work, beginning by setting out his existing policies to make employment pay through the Living Wage, Universal Credit taper rate, childcare support and National Insurance cuts.
The key policy principles in the Prime Minister’s speech are all subject to a call for evidence, beginning with the launch of a green paper on Friday. The headlines have focused on a shift to specialist work and health professionals to take over issuing fit notes currently handled by GPs, but there was more in the PM’s speech.
Policy in Practice’s recent work on sickness benefits was covered in our Back to Work report where we found the key drivers of the rise in long term sickness benefits are:
- an older and less healthy workforce
- an inability to access health support early enough
- and a social security system make it risky to re-engage with work.
Our X thread reporting live from the speech is available here.
The Prime Minister emphasises the importance of work
This part of the speech was perhaps the strongest, it felt like a personal and moral mission for the Prime Minister. He highlighted his policy successes: the Living Wage, the rollout of Universal Credit over the pandemic and the more generous taper introduced while he was chancellor, increases in childcare support and cuts to national insurance.
Sunak announced one major change to employment rules. The Administrative Earnings Threshold (AET) will be increased for both single people and couples to an equivalent of 18 hours, putting 180,000 claimants into intensive work search and, overall, bringing the number affected by all reforms to 400,000.
The migration of people from ESA only and ESA and Housing Benefit to Universal Credit is also to be moved forward from 2028.
Reform of fit notes: only 6% find people are able to do some work
The number of fit notes issued by GPs in England in recent years has steadily but not dramatically increased and is a mixed picture. It is worth noting that many fit notes issued each year are repeat notes and growth in these is likely to be a legacy of the pandemic.
Tony Wilson, Institue for Employment Studies writes a good thread on fit notes where he highlights the trends are broadly flat and they don’t entitle anyone to sickness benefits, only signing people off work. The figures also represent existing (repeat) fit notes, not just new notes issued. Central to sickness benefits is the Work Capability and PIP Assessments which the government is responsible for and is proposing to reform.
The Prime Minister spoke about the need to focus instead on what people can do, also announcing that people who are out of work, have a work coach and don’t get a job in 12 months will lose their entitlements entirely.
The government will also consult on changing the criteria for PIP, the assessment process and the type of support. The speech implies they may tighten the criteria and consider alternatives to cash payments for one off costs and adaptations.
Matching support to need
Sunak expressed the view that some disability benefits are not designed to encourage people to seek ongoing support, citing the growing number of people who are suffering from anxiety and depression, some of whom, the Prime Minister says, need more support.
Tackling fraud
He then drew attention to further policy priorities, including fraud and the need for a moral mission to get people dignified, purposeful work. Deven Ghelani spoke about benefit fraud recently with the BBC.
He also praised work coaches and the role of technology, including AI, in enhancing the advice and support people receive from the government.
The government will propose a new Fraud Bill to enforce civil penalties and allow information gathering for DWP led investigations, which will be allowed to rely on third parties information.
Our view: The devil is in the detail
The Prime Minister emphasised the bill for disability and sickness benefits is £69 billion and is forecast to rise by around 50% over the next parliament without action. The tone of the speech, focusing on supporting people to reach their potential, rather than finding cuts for the sake of it, is a welcome change from past announcements.
We will need to see the reforms proposed in the white paper though the support announced to help people back into work is very welcome.
But reforms to disability benefits are complex and affect a huge number of people with diverse and varying conditions. The detail of the proposals needs to be worked through carefully.
Policy in Practice is doing some research on how the 2017 reforms removing support for the intermediate Limited Capability for Work (LCW) group of disability benefits has been counterproductive, creating a binary system that makes returning to work a bigger risk for people who want to work.
Media enquiries
Deven Ghelani and Jack Rowlands are available for comment. Please contact:
Deven Ghelani, Director and Founder, Policy in Practice
07863 560 677
deven.ghelani@policyinpractice.co.uk
@Deven_Ghelani