Sickness benefits will be an issue for Autumn Budget 2024 and beyond

Sickness benefits and disability support are set to be defining issues in the Autumn Budget 2024. With a need to find £3 billion in savings, the government faces tough choices on balancing fiscal responsibility with fair and effective support for those facing health challenges and employment barriers.

One area under close scrutiny ahead of Autumn Budget 2024 is the Work Capability Assessment (WCA). Designed to evaluate people’s ability to work, the WCA has become a focal point of criticism from both claimants and taxpayers.

Key issues include:

• Stressful process: Many claimants report that the process is mentally and emotionally taxing, often exacerbating existing health conditions
• High overturn rates: A significant number of WCA decisions are overturned on appeal, which raises questions about the process’s fairness and accuracy
• Increased claims: The inefficiencies of the WCA have inadvertently led to more people claiming benefits, as it fails to adequately assess needs and abilities

These challenges have led to calls to scrap the WCA altogether, pushing the government to consider alternative approaches that better serve claimants while also reducing strain on public resources.

The proposed changes ahead of Autumn Budget 2024 could yield savings of £2-3 billion, primarily by reducing the number of people eligible for sickness benefits. However, the impact on individuals and communities could be significant:

1. Reduced eligibility: Around 450,000 people may lose their eligibility, creating uncertainty and potential financial hardship for many
2. Increased employment: Approximately 15,000 individuals may transition to work, providing both social and economic benefits
3. Narrowed eligibility to Personal Independence Payment: Under the proposed system only people eligible for Personal Independence Payment (PiP) would qualify for sickness benefits. This change could drive more people to seek PiP, further straining resources

Such a move could lead to a confusing landscape of eligibility rules, with many claimants facing uncertainty and stress as they try to understand how the new system will affect them.

Rather than introducing harsher sanctions, we urge the government to invest in support services that encourage positive pathways back to work. Increasing access to mental health services and support for parents and caregivers can help people with additional responsibilities re-enter the workforce.

A focus on constructive engagement rather than punitive sanctions can reduce disengagement and prevent dependency on support services.

For instance, job centres should prioritise helping people to rejoin the workforce by providing training, guidance and resources that anybody can access, regardless of their benefit status. This ‘carrot’ approach is likely to engage more people than the rather than the ‘stick’ of enforcing sanctions, which can often increase dependency and even push people toward claiming disability benefits.

For meaningful reform policymakers must also address the underlying factors driving economic inactivity.

One in five working age adults are disengaged from the workforce. To effectively tackle this issue, the government must understand and reduce the barriers that are keeping people out of employment, whether these obstacles arise from health issues, caregiving responsibilities, or social isolation.

The government has seen a substantial rise in spending on disability benefits, an increase of £20 billion or 50%, in recent years.

While the proposed changes to sickness benefits could help save the public purse £2-3 billion, addressing the root causes of job inactivity and focusing on sustainable pathways back to work would yield more long term benefits. Improving health, ending the binary in-work / can’t work regime created by ESA and focusing on sustainable pathways back to work would yield more long term benefits.

To build on this investment and help people stay in or return to work, a more supportive framework is needed:

1. Invest in health and wellbeing: Enhancing preventive healthcare and workplace wellness programmes can help reduce long term sickness claims
2. Increase employment flexibility: For people with fluctuating health conditions or caregiving responsibilities, flexible work options offer a practical solution that benefits both individuals and the economy
3. Strengthen employment support programmes: Voluntary schemes and tailored support for the recently or long term unemployed, backed by data, can bridge the gap for those able to return to work. Tracking the outcomes from these programmes ensures effectiveness and accountability
4. Improve sick pay: A reinforced Statutory Sick Pay (SSP) system, potentially funded by employers, can help workers weather short term health setbacks without the need for long term benefits, providing economic stability while preserving workforce engagement.

As the new government looks to tackle the growing economic inactivity amongst working age adults in Autumn Budget 2024, balancing fiscal constraints with compassionate, effective support for those who need it is paramount.

The proposed elimination of the Work Capability Assessment may address some systemic flaws, but limiting eligibility to PiP could risk further confusion and strain.

By addressing root causes such as health challenges, caregiving demands and social isolation, and by focusing on supportive pathways back to work, policymakers can create a more inclusive and effective approach to sickness benefits. This is an approach that empowers people and promotes a healthier, more resilient workforce.