Worse still, the long awaited reform of incapacity benefit is to commence at the least propitious time since Labour won office in 1997. Unemployment is now beginning to rise after falling consistently over the past 13 years. Workers with disabilities will increasingly have to compete for jobs with the newly unemployed.
Hutton is naturally anxious to make his mark after working in the shadow of successive health secretaries. Now, his skills will be tested to the full. In 1997 Labour set aside £5 billion from a tax on privatised utilities to finance the welfare-to-work policy. With this budget already spent Hutton will have to think outside the box if he is going to be successful.
The Department for Work and Pensions must claw back £360m from existing programmes. To have any chance of success it must spend this money up front to stop, wherever possible, a six-month claim for sickness benefit effortlessly gliding over into an incapacity benefit claim. The aim must be to help as many people as possible move from sickness benefit into work.
At the moment people claiming incapacity benefit for two years have more chance of dying or moving on to retirement provision than they have of getting a job. GPs and the department’s own medical service are in the frame, but doctors are not trained to be gatekeepers for the benefit system. Their task in issuing sicknotes is to declare that their patients are not well enough to follow their current occupation, not to determine what, if any, other jobs their patients could do.
At the end of sickness benefit claimants will move on to incapacity benefit if they are still without work. This pays at least £20 more than the jobseeker’s allowance given to those seeking work. Sometimes the addition can be much more. Claimants are therefore incentivised to get themselves on to the highest rate of benefit. Why should they seek work on a jobseeker’s allowance? Who can blame them? I have proposed that there should be a single benefit for all people of working age not in work. The message would be loud and clear from its title. People may not be able to work now but the benefit emphasises what is expected of people of working age. How could this be achieved when there is scarcely any new money? Incapacity benefit rates should be frozen and the money saved used to lift the lower jobseeker’s allowance to the incapacity benefit rate. This could be achieved over a five-year period.
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Instead of adopting this approach Hutton intends to drive reform in the wrong direction by introducing an even higher rate of benefit for the most disabled people on benefit.
Many disabled people have special costs. But these should be met by the disability living allowance. Taking the wrong turning here makes a critical reform of the department’s own medical service even more important.
Before a claim for incapacity benefit can be verified the department’s own doctors have to review the application. Here we step into a pure Alice in Wonderland world. The government has outsourced its medical work to Schlumberger. It is a target-led service but sadly with the wrong targets. They are weighted towards it making a good profit over and above the interests of claimants and taxpayers.
The number of new claims local employment offices can send each month for a medical review is strictly limited. Deferred cases simply join next month’s backlog and, in the meantime, incapacity benefit continues to be paid.
The quota must be abolished. Moreover, officers in the Department for Work and Pensions must share the task of the medical control officers in the service. Schlumberger’s commercial targets mean that its doctors see around half the number of claimants that independent doctors say is necessary. Even when a claimant is summoned, many simply do not bother to turn up. Doctors tell me that it is not uncommon to invite someone in five or six times. One doctor reported a claimant who had refused 11 invitations but still drew benefit.
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Common sense suggests failure to appear at a medical should be followed quickly by a second appointment. Failure to turn up on a second occasion should automatically trigger the cancellation of benefit if no good cause is produced. This is hardly radical. But it is sensible and likely to produce results and savings.
Hutton made much of the pathways-to-work pilots that the government has been running, claiming a high success rate in helping claimants back into work. But my analysis shows that the record of re-entry to work from incapacity benefit in the pilot studies is not as good as in some areas outside them. The pilots cost £400m yet the government is planning a national back-to-work programme for the largest group on benefit on a budget of £360m. Someone ought to look at the basic maths.
Again, just as the medical help offered by GPs and the department’s medical service must be concentrated in the early weeks of a claim, so too must any additional staff resources go into interviewing people for work and fixing up interviews just as soon as they can attend. Otherwise this money will be largely wasted.
In reality the government’s programme does little for the 2.7m people already on incapacity benefit. Therefore, we need a radical solution, beginning with a bonfire of all of the controls that trap claimants in benefit. As the secretary of state was making his reform announcement I was reflecting on the many incapacity benefit claimants I know well. How would they react? Contrary to popular myth a significant number want to work, try, and are further depressed when their efforts fail and they face difficulties in being allowed to scramble back onto the benefit lifeboat.
Instead of defending the complex rules for part-time work why not make it clear that all incapacity benefit claimants are free to go and get a part-time job if they can, and that they can keep all their benefits, as well as any money they earn.
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All they need to do is to tell the local office of their intention. In return local benefit staff should promise to make contact in six and then 12 months’ time to see how claimants are getting by.
I believe that considerable numbers of people whose confidence has been wickedly eroded by being on benefit will hesitantly accept this opportunity to find work. Once at work many will make new friends and for the first time they will have a little spare cash. Not everyone will make it into full-time work. But some will, the amount of human happiness will be increased and the taxpayer bill will fall.
These simple solutions work with, rather than against, how people think and are motivated. Both the individual and society would benefit and such a strategy would also signal a welcome end to new Labour’s centralised control freakery.