CITY leaders will be told tomorrow that they can earn cash dividends to cut their council tax by helping the Government to get more long-term benefit claimants back to work.
Bonuses for councils that help to reduce incapacity benefit payments would be matched by rewards to GPs who cut the number of sick notes that they write keeping people off work.
Tony Blair told council chiefs of his plan to share with them the proceeds of money saved in long-term benefit handouts in a top-level meeting at Downing Street last Thursday. Among those who attended were Ken Livingstone, the Mayor of London, and Steven Purcell, the leader of Glasgow City Council, the city with the highest level of incapacity benefits in Britain.
The dividends would be paid when the number of claimants fell after city leaders set up training courses, job interviews and other help such as physiotherapy sessions in their areas.
Officials have yet to work out how to divide up the money saved when councils help to cut the national benefits bill of £12.5 billion for those unable to work. But a source at the Department for Work and Pensions confirmed yesterday that the incentive was to provide money for improving local services for the whole community, or cutting council tax.
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The scheme will be included in a Green Paper on welfare reform to be unveiled by John Hutton, the Work and Pensions Secretary, tomorrow.
Ministers want to greatly reduce the 2.7 million people who claim incapacity benefit by encouraging those who are able to do some work back into jobs. Measures could include cutting benefits for claimants who refuse to attend job interviews and having employment advisers in GPs’ surgeries.
Mr Hutton denied that he was planning to “name and shame” GPs who issued a particularly large number of long-term sick notes. But he did confirm plans to monitor sick-note hot-spots.
He denied that the Government planned to cut incapacity benefit payment rates. “We have never had any plans to cut people’s benefits. People are poor enough,” he said. “But we have got to be fair and reasonable, not just to people on benefit but to those who are paying for benefits through their own hard work and taxes.”
Mr Hutton told the Sunday AM programme on BBC One that he wanted to talk to GPs about the plans to reward those who issue fewer sick-notes.
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Benefits will be docked by as much as £10.93 a week for refusing to attend a work interview and £21.86 for a second refusal. The most seriously disabled, deemed unable to work, will be exempt from the changes.
Mr Hutton confirmed that as part of the reforms the Government is to change the name of incapacity benefit.