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Many people on benefits want to work - but the system won't let them

Chris Grayling 2010 square An interesting welfare reform story was shut in behind the new Times paywall this morning.  We linked to it earlier today, but many people won't want to pay to read the Times.  I'll give a brief summary of the main facts.

A Professor who advised the last Government wants the new one to junk reforms he helped to design.  Paul Gregg, a Bristol University academic, says that it would be "scary" to move up to 2.5 million incapacity benefit (IB) claimants on to the new employment and support allowance (ESA) in October.  All new claimants have had to apply for ESA, which includes a work capability test, since October 2008.  The benefit is essentially a payment of last resort for those who are genuinely incapable of working.

Atos Healthcare, the company which carries out the tests, doesn't see eye to eye with the appeals tribunals.  Atos finds that only 18% of claimants are eligible for ESA.  39% are judged fit for work and placed on jobseeker's allowance (JSA).  The rest drop out during the process.  Of the 39%, a third appeal, and 40% of those who appeal without legal advice win: for those who appeal with legal advice, the success rate rises to 70%.

Atos is dealing with about 50,000 cases a month, but a backlog's building up: 66 per cent of appeals miss the target time of 14 weeks.  According to the Times, thousands of vulnerable people with terminal cancer, Parkinson’s disease, multiple sclerosis and clinical depression have had their applications rejected and been told to look for work.  The paper also notes that "There is evidence...that many employers are not interested in taking on people who have been claiming for years."

Some will back Atos up, arguing that the tests indicate that under one in five of those assessed should have been on IB in the first place.  They'll look with special interest at the 43% who simply drop off the benefit.  Others will read that last figure in a different way, and protest that people in need are being unjustly pushed off public benefits by private contractors.  They'll read the tribunal success rate as an indictment of Atos.  Others will counter-maintain that the tribunals are soft, and suggest that if lawyers can up the appeal success rate by 30 per cent, then the law needs re-examining.

It's worth emphasising that the ESA is not, repeat not, a product of the Coalition (which hasn't had time to implement major welfare changes yet).  Instead, it was promoted vigorously by James Purnell, the former Labour Work and Pensions Secretary.  I was on the Work and Pensions Select Committee with Purnell during the Parliament before last, and he took a cool, dry-eyed, private sector-friendly view of how IB should be reformed.

The new Government evidently thinks that the ESA criteria were drawn up too hastily, at least in some cases.  There's to be a review of the tests.  Changes to it have already been made this week, including allowing people with cancer awaiting chemotherapy treatment to be allowed to go on to the benefit.  Chris Grayling's quoted as saying that Gregg's advice will in effect be rejected.  He's key to making welfare reform work, having taken a special interest in IB reform when he shadowed Purnell.

I worked on the Party's welfare-to-work programme before the 2005 election.  We found then that polling suggested that a big slice of IB recipients wanted to work.  They didn't both because benefit withdrawal didn't make work worthwhile, and because once parked on IB they lost the contacts, skills and drive to get into work and stay there.  The state agencies were often worse than useless at solving the problem.  Such organisations as the Shaw Trust had a better track record.

As so often, the private, voluntary and charitable sectors hold the key to saving costs and helping people - if, and it's a big "if", Iain Duncan Smith and Grayling can get benefits reform right.

Paul Goodman


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