The three things Cameron should know about sickness and disability benefits


Today’s press stories on Employment Support Allowance (ESA) show that politicians and the media are stuck in a mid-1990s timewarp when it comes to sickness and disability benefits.

Disabled-person-silhouetteFar from representing the immobile bloc of long-term worklessness so often assumed in public discussion, the sickness and disability benefit caseload has changed dramatically over the last 15 years, driven by tumbling rates of receipt coupled with increases in severity of impairment.

Failure to recognise the scale of these changes has led both the previous and the current government to indulge in undisciplined and unrealistic expectations about the potential for caseload reductions.

This quotation from David Cameron neatly summarises the received wisdom on IB/ESA:

“For too long in this country we have left people on welfare for year after year when those people, with help and with assistance, could work, and so we’re producing a much better system where we really put people through their paces and say that if you can work, you should work.”

Drawing on ongoing analysis of benefit receipt due to be published this autumn, we can confront this narrative with some real-world evidence.

There are three areas where the shortfall in realism is particularly striking.


(1). “For too long in this country we have left people on welfare”

It is well known that sickness and disability benefits were extensively used in the 1980s and 90s by UK and other governments to encourage some unemployed workers – especially older male industrial workers – to leave the labour market.

Rates of IB receipt rose dramatically, with huge disparities between regions, and between men and women, which could not be realistically explained by differences in health and disability status alone. This ‘hidden unemployment’ is the origin of the lack of public confidence which has continued to dog IB to this day.

But rates of receipt for Incapacity Benefit/Employment Support Allowance have been falling for years, and have fallen most for those groups and areas which were most affected by the policies pursued in earlier decades – older men in industrial areas. The pattern has been one of strong convergence, with regions moving much closer together and falling receipt among older men.

The process is illustrated in Graph 1 below with regional data for one of the groups with the highest rates of receipt, men aged 55-59. There are still gaps between regions, but they are far smaller than in 1999 and a far more consistent with regional differences in health and disability status.

This suggests that if there was a significant ‘hidden unemployment’ component in the IB caseload in 1999, it is now largely a thing of the past – and prompts the question of just how low rates can be expected to go.

Graph 1:
IB-ESA-receipt-by-region-men-aged-55-59
(2). “We have left people on welfare for year after year”

When politicians talk about sickness and disability benefits, they invariably focus on long-term claims. As these benefits need to support people with long-term disabilities, it is inevitable that a significant share of the caseload is long-term in nature.

But IB/ESA are not just for the severely disabled, and long-term claims are the exception, not the rule, except for severely disabled recipients. It is true that at any point in time, long-term claims make up a majority of the caseload, but this is simply due to the arithmetic of stocks and flows.

Taking the caseload over time the pattern is reversed, as illustrated in Graph 2 below, where the picture at one point in time – with a clear majority of claims running for five years or more –  is the mirror image of the picture over a five year period.

Characterising the IB/ESA caseload in terms of long-term receipt while neglecting the huge numbers of people moving into and out of the system every year is an arithmetical error which fosters unrealistic expectations and blinds policy-makers to the fact these benefits are also there to support people with temporary and less severe conditions.

Graph 2:

Incapacity-benefit-claimants-by-duration-of-claim
(3). “Those people, with help and with assistance, could work”

Over half of all IB/ESA recipients are now also in receipt of Disability Living Allowance, rising to two thirds among the long-term IB recipients with whom the prime minister is concerned. The rise in DLA receipt is one of the major trends in welfare of the last two decades, reflecting demographic change and trends in disability prevalence.

While many of the DLA recipients who dominate the long-term IB caseload would like to work, their support needs are of a different order to those with less severe impairments. It would obviously be absurd to suggest that putting ‘people through their paces’ and telling them that ‘if you can work, you should work’ are going to make a difference to the employment chances of DLA recipients.

Graph 3:

Incapacity-benefit-caseload-by-DLA-receipt-1995-2010
These developments raise serious questions about how much further the sickness and disability caseload can be reduced without impacting on people in highly vulnerable situations.

This is not shroud-waving: if government intends to maintain a functioning system of support for sickness and disability, it needs to recognise that with IB receipt at low levels compared to a decade ago, any further reductions come with increased marginal costs.

As things stand, those costs are increasingly falling on sick and disabled people, and not on the exaggerated social stereotypes variously described as the ‘hidden unemployed’, ‘discouraged workers’ or ‘benefit scroungers’.

In their zeal to cut caseloads, policy makers have for years been ignoring obvious trends and pursuing self-defeating strategies in the teeth of evidence. It’s high time they recalibrated their expectations to the realities of what has been happening to benefit caseloads since the 1990s.

That would mean asking how the system can meet the twin objectives of supporting people for the duration of their inability to work and maximising the employment chances of people with long term conditions.

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  • http://www.benbaumberg.com Ben Baumberg

    Declan – I’ve been searching for a way to contact you after spotting some of your earlier LFF posts, but I can’t find an email address anywhere so thought I’d try this!

    I’m just finishing a PhD on incapacity benefits at LSE with John Hills/Tania Burchardt, and (along with some other young academic researchers) am planning to do some work that tries to challenge the current ESA debates – which is obviously exactly the same aim as you. If you’re interested in having a chat then my contact details are at http://www.benbaumberg.com/contact.htm

    (And obviously if anyone else reading this slightly uninteresting comment has the same aims, then feel free to get in touch too!)
    BB

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  • definatelycharlie

    Congratulations-this is very important,useful stuff.Do you have any thoughts or analysis,though,to offer on a related point.It is often implied that the numbers,as a proportion of the working-age population,which are considered unfit for work in this country are disproportionate compared to other nations.Great play is made of this notion.
    I understand that those of a similar status in the Eurozone countries,when averaged-out,come to 5.6% of their working-age populations.Whilst here it is higher.Although I calculate that by the time the current system is fully applied to existing recipients,our country will have an unfit rate below 2%.
    Which seems remarkably low.But I don’t trust my figures here-could you provide something more authoritative?

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  • Robert

    When you sign on sick with your employer, the DWP place you on a list, then as you come to the end of your 23 week sickness the DWP have already started you off on ESA then start your claim, if you have gone back to work on week 21 they would have already sent you the forms , but you could have already gone back to work sign off the sick or what ever, they are classing this as not going forward. For example I was in work and felt ill it was found to be TB, I then had to sign on I was off work for 20 weeks, I went back to work at the end of the twenty weeks but the DWP had already sent me the forms to go onto IB, because I had gone back to work they classed this as not going forward with the claim.

    People do not write in to claim IB or ESA now this is done through your sick notes

  • http://afteratos.com After Atos

    There is a lot that Cameron and people need to know about benefits and disability and what happens after an incident that through incompetence and wrong or no input in end up with a worse situation. But I think no one is interested. They just want to believe and stick to the stereotypes. Would love to do a simple animation with stick characters that goes through 4 different scenarios and characters as to what happens when something happens and they get sick and show people what actually does happen. If you get better you are lucky it is such a mess many end up worse and beyond recovery. Just a simple animation following 4 stories would help educate every one. I am beyond trying to teach any one today. not one wants to know and is not interested. Even our own. Load of misinformation and little intelligence going about.

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