The government’s independent reviewer of jobseeker’s sanctions says new approach is needed if disability employment gap is to be halved
A new report released today by the Social Market Foundation think-tank warns that, while effective for some, the threat of sanctions can do more harm than good and has not improved employment outcomes for disabled people.
In the current system, less than one in ten out-of-work disabled people find work each year, meaning that the government will not meet its ambition of halving the ‘disability employment gap’ unless radical changes are implemented.
The report, Closing the gap: creating a framework for tackling the disability employment gap in the UK, is written by Matthew Oakley, a former HM Treasury policy advisor who was commissioned by the Department for Work and Pensions to conduct its 2014 Independent Review of Jobseekers Allowance sanctions.
The report finds that halving the disability employment gap within 20 years would mean at least trebling the growth of the disability employment rate achieved over the last 15 years. This achievement is highly unlikely under the current system where the majority of workless disabled people are discouraged from seeking employment.
The report recommends:
- Splitting benefit eligibility from setting the setting of conditionality requirements by abolishing the controversial Work Capability Assessment;
- Equalising the rate of benefit received in Universal Credit for jobseekers and disabled people;
- Assessing eligibility for a new benefit to meet the costs of disability with a reformed version of the current Personal Independence Payment assessment;
- Ensuring that benefit levels are adequate to support those with a disability to fully engage in society;
- Instead of sanctions, providing voluntary assistance to disabled people who wish to engage with support to enter work; and
- Giving a ‘Steps to Work Wage’ and support contract to disabled people who choose to engage with the system of support, whether at Jobcentre Plus, the Work and Health Programme, or wider services.
The detail of the reforms would need to be properly consulted upon, but should help increase the chance of the government reaching its ambition. Making progress towards halving the gap would also help the government meet its fiscal goals, with each additional 100,000 disabled people in work leading to a gain to the exchequer of around £1 billion a year.
The report’s author Matthew Oakley, said:
“The government faces a massive challenge in meeting its ambition of halving the disability employment gap. The current system does not provide adequate financial support to disabled people who need it and pushes many further away from work. The system of benefits and requirements placed on disabled people needs a complete overhaul.”
“Benefit ‘conditionality’ has been shown to work for non-disabled jobseekers, but with less than one-in-ten workless disabled people moving into work each year, a new approach is needed.
”The government should encourage disabled people to move towards work by paying a “Steps to Work Wage” to those who take on the support available. Doing so would turn the current system completely on its head by providing better support rather than the constant threat of sanctions.”
Key findings from the SMF report:
- To halve the disability employment gap, over 1.2 million more people with a work-limiting (WL) health condition or disability need to be helped into sustainable employment
- Currently, just 8% of workless people with a work-limiting condition or disability [i.e. in the Work-Limited (WL) group] move into employment in any one year and flows into the workless WL group negate the majority of the impacts of these flows. So to achieve this within 20 years would require at least a trebling of the growth of the disability employment rate compared to the last 15 years. The growth rate will need to increase even faster if the non-WL employment rate – the rate of people without a work-limiting condition or disability – continues to rise.
- For this to happen, many of those who are currently not seeking or not wanting work will need to be supported and helped to find work
- Both of these groups are significantly more disadvantaged (in terms of their employability) than those in the WL group who are currently in work or seeking work
- All of this is becoming more challenging as the prevalence of mental health conditions, particularly in young people, increases steadily over time.
- To reflect the scale of the challenge, a more realistic ambition would be to increase the number of disabled people in employment by at least 190,000 in this parliament. Doing so would give the exchequer £1 billion a year in benefit savings and tax.
Policy recommendations from the report:
Splitting benefit eligibility from setting conditionality
The assessment of eligibility for benefit should be split from the assessment of an individual’s ability to move towards and enter work. This would ensure that, regardless of benefit they receive, they still have an incentive to engage with the support available and move towards work if they can.
A mandatory meeting to discuss support options
All claimants with a work-limiting health condition or disability should be required to attend a meeting with a specialised case worker to outline support available, reassure them that their benefit would not be affected by taking on support and discuss next steps. Failure to attend without good reason would result in a sanction being applied but compared to the existing system, this meeting would not place extra burdens on the individual.
Voluntary support for those who want it
Further support would be voluntary. Individuals could choose whether or not to engage with the support. If they chose to disengage from the system, they would be able to do so, without fear of their benefits being affected.
Financial incentives
Those who did choose to engage with the system of support, whether at Jobcentre Plus, the Work and Health Programme, or wider services would be financially compensated for their time through a new ‘Steps to Work Wage’. The level of payment and conditions involved would be agreed between the case worker, individual and support providers and written in a contract, like an employment contract. Failure to fulfil the contract’s terms would mean compensation payment not being paid.
-ENDS-
Notes to editors:
- A copy of Closing the gap is attached and also available at: http://smf.jynk.net/disability-employment-gap/
- About the report:
The Social Market Foundation retains full editorial control over the report and its findings. - About the Social Market Foundation:
The Social Market Foundation (SMF) is a non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. We conduct research and run events looking at a wide range of economic and social policy areas, focusing on economic prosperity, public services and consumer markets. We engage with policymakers and opinion formers, including Ministers, MPs, civil servants, regulators, businesses, charities and the media. The SMF is resolutely independent, and the range of backgrounds and opinions among our staff, trustees and advisory board reflects this. - About the author:
Matthew Oakley joined the SMF as Senior Researcher in July 2015. Prior to SMF Matthew had been Chief Economist and Head of Financial Services Policy at Which?, Head of Economics and Social Policy at Policy Exchange and an Economic Advisor at the Treasury. He is also a member of the Social Security Advisory Committee and he led the Independent Review of Jobseeker’s Allowance sanctions that reported to Parliament in 2014. He is a recognised expert on public policy, welfare reform and consumer issues.
Media enquiries:
- To interview the report author or for further details about the research, please contact Sean O’Brien via sean@smf.co.uk or 020 7222 7060.