7 September 2023

Until people on welfare can trust the system, they won’t get back to work

By Jessica Prestidge

Good work is good for our health and the record level of health-related unemployment is an unconscionable waste of human potential.  Research by my organisation, the Centre for Social Justice (CSJ) has shown that 700,000 people on sickness benefits want to work, and believe they could with the right support. With over a million vacancies in the labour market, the government is right to ‘ensure that everybody who can do so, benefits from all the opportunities that work brings’, as Work and Pensions Secretary Mel Stride put it to the House of Commons this week.

The professed objective of proposed changes to the Work Capability Assessment – a test designed to establish someone’s fitness for work – is laudable. Too many people are written off and employment support should be available more widely. Work is about more than money. The structure, social interaction and purpose associated with employment is good for both mental and physical health.

Predictably, critics have been quick to cry foul, describing proposals as a thinly veiled attempt to cut costs. With spending on incapacity benefits expected to reach £29 billion by 2027-28, cutting costs – or arresting their exponential rise – is a perfectly valid objective. But not by any means.

The CSJ has long argued for Universal Support – a voluntary support programme targeting those facing complex barriers to employment. The Chancellor committed to the roll out Universal Support in the Spring Budget and the programme is expected to help 50,000 people with health conditions and disabilities into employment each year.

The voluntary nature of Universal Support is critical to its success. We know that a lack of trust in the system discourages engagement. Too many people think the DWP is there to catch them out. The DWP’s recent White Paper recognised this and committed to ‘build greater levels of trust between DWP and the people who use our services’. The Green Paper that preceded it was more explicit, still, identifying ‘lack of trust’ as a barrier to ‘people’s willingness to accept offers of employment support.’

The government’s consultation document on its proposals signals a different approach, with changes set to lower the value of benefit entitlement for claimants with certain conditions and expand conditionality to a wider group of people.

The application of conditionality will therefore need to be fair and proportionate to avoid discouraging good faith engagement with employment support. The CSJ has proposed an ‘Into Work Guarantee’ – a promise that someone’s benefit entitlement will be protected should a job not work out – to de-risk the transition into employment and demonstrate to claimants that government is on their side.  It was promising to hear the recently appointed Shadow Secretary of State for Work and Pensions, Liz Kendall, echo her predecessor in asking the minister to adopt this proposal in the House of Commons.

Government communications surrounding proposed changes to eligibility emphasise the role of home working in extending employment opportunities to those unable to commute or work from an office. But while home working might be the new normal for middle class professionals, those on lower wages have fewer remote options. This reality will need to be reflected in the new rules.

Given changes won’t come into effect until 2025 and the Work Capability Assessment is set to be abolished anyway, the fiscal impact of proposals is likely to be limited, while recent history shows that attempts to stem the flow onto incapacity benefits can be wildly counterproductive. The impact to individuals, however, will be significant. Government research published in March this year highlighted the financial precarity of many of those in receipt of health and disability benefits, with money intended to meet the extra costs of disability instead used to cover the cost of essentials, such as food and fuel. Generalised suspicion that people are ‘gaming the system’ should not be allowed to obscure this fact.

But there is only so much you can do through the welfare system itself. The DWP is a downstream department, picking up policy failure from across Whitehall once costs have escalated and problems have become entrenched. The devil will be in the detail, but sensitive though it is, benefit eligibility should not be off limits as government grapples with mounting costs, rising inactivity and chronic labour market shortages.  Neither, however, will it be the lion’s share of the answer. The benefits bill is rising because population health is falling – and no consultation will change that.

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Jessica Prestidge is Deputy Policy Director at The Centre for Social Justice

Columns are the author's own opinion and do not necessarily reflect the views of CapX.