Drawing on ongoing analysis of benefit receipt due to be published this autumn, we can confront David Cameron’s ignorant narrative with some real-world evidence.
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.
Far 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:
(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:
(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:
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.
198 Responses to “The three things Cameron should know about sickness and disability benefits”
Declan Gaffney
Lee – no suspicion of trolling – the points you raise need to be addressed.
On the first point about regional disaparities,the pattern is definitely one of convergence (not just for the group in the chart, but for all age/gender groups). It may not be visually clear from the chart but there are various statistical measures which tell us whether disparities are increasing or reducing. The standard deviation is one: it provides a measure of how far various groups (regions in this case) are from the overall average for all groups. For the age/gender category in the chart, the standard deviation reduced by 51% over the period, so about half the regional disparity has been eroded over this period. The pattern across age/gender groups is that the bigger the disparities at the start (1999) the greater the reduction in the standard deviation. The coefficient of variation shows the same pattern.
On the second point, about possible suspicion of cherry-picking examples, the results in this post are drawn from an analysis of all age/gender groups. Obviously it’s not possible to present all of this in a single post (there will be an article later this year), so I used the male 55-59 group for the chart. But the point it exemplifies holds generally: groups which had relatively high rates of receipt in 1999 have seen very big falls in IB receipt. Groups with the lowest rates of receipt have seen smaller falls. (The only exception is men and women in the 35-44 age band who have seen very small rises – minor compared to the big falls for men aged 45 and over).
I did want to stress the impact of deindustrialisation: I think it’s hard not to feel that the low public confidence in IB/ESA – the sense that this is not a benefit which does what it say on the tin- is rooted in the way sickness benefits were used by government to manage industrial change in the 80’s and 90’s. A lot, but by no means all, of the reduction in rates of receipt is due to a generation of workers who lost their jobs in middle age in the 80’s and 90’s moving into retirement. So there was a big historical change associated with deindustrialisation and IB, the impacts of which have been receding for some time. But what doesn’t seem to have happened, contrary to the hypothesis you suggest, is any compensating increase in IB receipt among other age/gender groups. This should be clear when the full analysis is published- but given the media attention today, I thought it was worth putting some of the results out in advance.
DavidG
I’m rather concerned by the logic regarding DLA and the assumption that this necessarily leads to someone being less able to work than someone not in receipt. Taking my own case as an example, I’m in the ESA WRAG, but not in currently in receipt of DLA. I’m probably borderline for eligibility for DLA Mobility Allowance, but it isn’t my mobility difficulties that make it impossible for me to work at the moment, it’s the fact I can’t sit or stand for any period, which wouldn’t fall under either the Mobility or Care components of DLA. Undoubtedly many people do receive DLA as a result of conditions that limit their employability, but many people will be similarly limited without being in receipt of DLA. DLA is a crude measure that doesn’t address many aspects of disability and we should be cautious about relying on it as an indicator for or against either employability or the level of support someone is likely to need due to disability.
Bill Kruse
RT @leftfootfwd: The three things Cameron should know about sickness and disability benefits http://t.co/pnf49eY
Claire OT
RT @suey2y: http://t.co/IAVRUWK Brilliant Declan Gaffney gives us most important research into sickness & disability benefits<USE & RT!
BendyGirl
RT @suey2y: http://t.co/IAVRUWK Brilliant Declan Gaffney gives us most important research into sickness & disability benefits<USE & RT!