Why employment and support benefit is now a battleground

As claimants argue over entitlements and the jobs market dries up, early fears about benefit changes are being realised

A year ago, employment and support allowance was launched, with the aim of replacing incapacity benefit and income support for people unfit for work. ESA represented the brave new world of benefit entitlement, with heavy emphasis being placed on “not writing people off”, encouraging “work-related activity” and involving the private sector in providing the support people would need to get into work.

Existing claimants of incapacity benefit and income support were to be largely left alone, although at some unidentified point in the future they too would be brought into the ESA regime applied to all new claimants after October 2008.

So what has actually happened? Was it all just rhetoric, an exercise in smoke and mirrors of which Derren Brown would be proud?

If the first few months were anything to go by, this seemed to be the case. Advice agencies received few calls about ESA, and, although we were geared up to expect problems (we could see the pitfalls), there was little feedback from claimants. Job centres came under immense pressure towards the end of 2008 and throughout this year, and staff were diverted from most of their other activities to cope with the leap in unemployment. So the “policing” of ESA seemed to be shelved. The problems that were reported were more of delays in processing routine claims than of the quality of decision-making.

New ESA claims were supposed to be placed in an assessment phase for 13 weeks, before moving into either the support group or the work-related activity group (or refused benefit altogether). The assessment phase, in practice, began to take 16-20 weeks or longer, which did cause some hardship, given the lower rate of benefit paid – up to £64.50 a week, compared with £89.80 for the work-related activity group and £95.15 for the support group.

Less obvious at that stage was what was happening with the outcomes after assessment. The support group was supposed to include the most disabled claimants – those with little immediate prospect of employment. Department for Work and Pensions estimates were that about 10% of claimants would find themselves in that group. Those in the work-related activity group would be expected to re-train, seek medical treatment or take other steps to move nearer to employment. They would be helped by private contractors under the Pathways to Work banner and paid largely by results.

So what has happened? It seems two-thirds of ESA applicants nationally – and up to 90% in some areas – are failing the initial assessment nationally, even though the DWP had forecast a 51% failure rate. By contrast, only 39% of incapacity benefit claimants were refused benefit. If they appealed, 51% won their case compared with only 30% of ESA claimants.

The contractors responsible for providing the intensive support for ESA claimants have been feeling the pinch too – Shaw Trust, one of the largest, recently blamed its Pathways contracts for a significant operating loss for 2008-9. Others have lobbied hard for more up-front funding and less payment-by-result because results have been difficult to achieve with the economy in nosedive.

So ESA is now becoming the battleground advice agencies feared it would be, with claimants arguing over entitlements and Jobcentre Plus and its private partners trying to operate a new regime in an unfriendly economic environment. Finding people fit for work when the work isn’t there simply shunts the problem around; it doesn’t create jobs.

Gary Vaux is head of money advice at Hertfordshire Council. Please send any questions for him to mithran.samuel@rbi.co.uk

This article is published in the 15 October 2009 edition of Community Care magazine under the headline Why employment and support benefit is now a battleground