Welfare reform may save the government money but the lives of benefits claimants will become a whole lot tougher, says Gary Vaux
Chancellor George Osborne took time out from the recent G20 summit to make clear that the incapacity benefit budget will be a key source of savings for the coalition.
Cutting the welfare bill by reassessing people on incapacity benefit or income support due to ill-health and moving those deemed fit to work on to the lower paying jobseeker’s allowance is also being sold as a way of limiting cuts to services, such as social care.
Reassessing existing incapacity benefit claimants was a policy set out by the Labour government, which wanted to complete the job by 2014.
Before the election, the Conservatives indicated that they would implement reassessment more quickly than Labour, possibly by 2012.
But after Osborne’s comments, the government denied reports that it wanted to treble the rate of reassessments from the 10,000 a week planned by Labour.
In a written reply to a parliamentary question, Freud said: “The current plans are to begin the reassessment of cases receiving the old-style incapacity benefits in October 2010, with a small trial to test and learn from the process, with the national reassessment programme planned to run from spring 2011 to March 2014.”
Of course, seeing that Lord Freud had been a special adviser on welfare reform to the Labour government before becoming a Conservative adviser and joining the coalition, it’s not surprising that there is a continuity of policy in place.
But his statement exposes as empty some of the political rhetoric from the pre-election debates, when much was made of how much “tougher” life would be for incapacity benefit claimants.
The Department for Work and Pensions and its medical contractor, ATOS, could never handle more than the planned 10,000 reassessments a week set out by Labour. To maintain even that workload over three years, and do new cases as well is probably unattainable unless corners are cut.
But if the timetable is proving to be a stumbling block, the work capability assessment (WCA), the test that will be used on incapacity benefit and income support claimants who are unfit for work, will almost certainly ensure life will be made tougher for existing claimants.
The WCA was introduced in October 2008 to assess entitlement to employment and support allowance (ESA), the replacement for incapacity benefit. Since then the failure rate for ESA has been more than twice what it was under the old assessment system for incapacity benefit.
The government is reviewing the WCA, and has already decided to drop the bizarrely named work-focused health-related assessment. But many long-term claimants, and this will include many people with long-standing mental or physical health problems or learning disabilities, will find themselves reclassified as fit for work. This means not only a drop in income of £25-£35 a week but also involvement in the whole range of job seekers’ requirements, the prospect of further benefit cuts for non-compliance and even reduced help with mortgage costs and rent. With disability living allowance also being targeted it seems that the next few years will not be a good time to be ill or disabled.
PS Is it a sign of the times that the new chair of the work and pensions select committee is called Anne Begg, and its media officer is Laura Humble?
Gary Vaux is head of money advice at Hertfordshire Council. Send questions for him to email@example.com