The power of well-being and the Social Fund

With the coming abolition of the Social Fund, local authorities might be expected to do something to fill the gap. Local authorities used to offer loans before the introduction of the Social Fund in 1988. Local government in Scotland now has a general power to promote well-being, and I have to confess that I had blithely assumed this power would make it possible to develop alternative systems for delivering financial assistance. The recent debate about the powers of the Scottish Parliament has prompted me to rethink.

Under the 1998 Scotland Act a range of powers were devolved to the Scottish Parliament, with a large number of explicit exclusions. In 2000 the UK Parliament devolved additional powers to English and Welsh local government, including a general power to promote well-being (Local Government Act 2000, s 2). The promotion of well-being includes a power to “give financial assistance to any person” (s 2 (4)). In 2003 the Scottish Parliament followed suit, creating a general power to promote well being. The 2003 Local Government in Scotland Act grants Scottish local authorities the same powers (s.20), using the same wording as the Act for England and Wales.

However, the Scottish Parliament does not itself have these powers. It is expressly denied that role by the definition of reserved powers in the Scotland Act. So, it cannot make provision for “Schemes supported from central or local funds which provide assistance for social security purposes to or in respect of individuals by way of benefits.” (Scotland Act 1998, schedule 5 F1) If the Scottish Parliament did not itself have a power to give people financial assistance, it could not have granted that power to local authorities – the only authority could have come from the UK Parliament. If that is right, it is possible that English and Welsh local authorities now have a power that the Scottish Parliament and Scottish local authorities do not.

Further note, 15th February 2011. The Scotland Office has written to say that they will be addressing the issue of competence in the legislation to ensure that the necessary powers will be in place. That should resolve the specific issue with the Social Fund, but it may recur in other fields if the general issue of competence is not addressed.

Assessing cancer patients for ESA

Most people in receipt of Employment and Support Allowance are treated as needing preparation to return to work. It has taken a little time for government to realise the implications of that process, but an informal consulation on the circumstances of cancer patients suggests that the penny has started to drop. When I was interviewed on Radio Wales on 28th April last year, I took the treatment of cancer patients as an illustration of the problems. What I said was this:

“Of the people who are down here as having neoplasms, which are various tumours, we have 33% who don’t get signed off. Some are being found fit for work and some don’t complete the assessment. Now of course, it’s not that people basically say, ‘I’ve got cancer, I’m stopping work.’ What happens is that people are uncertain. They don’t know. They want medical assessment. They want clarification. They are unsure about the situation. Theyhope that things will be different. It takes time to sort this out. And what we’ve increasingly got is a system that is treating people mechanistically, ticking boxes, and saying ‘sorry – wrong boxes – go away.’ “

The consultation on Personal Independence Payment

In a previous posting I expressed concern about the announcement of policy decisions before consultations had been closed (see “A failure to consult”, 21st February 2011). A new report, Responsible reform, criticises the consultation on Personal Independence Payment because the government has misrepresented the responses. The authors have mainly counted the responses, which is not necessarily a valid criticism – consultations are not numerically representative, and large umbrella organisations cannot sensibly be counted in the same way as individuals submitting standard responses. However, the overwhelming opposition to the reforms is well conveyed by the quotations.

This contrasts with the government’s response to the consultation, which suggests broad support for the principles even if there are differences on specifics. Responsible Reform thinks the government’s response is misleading, and it is hard not to agree. The report cites a standard legal principle: “once a public body decides to consult it has to do so properly.”

Rising unemployment

The Chartered Institute of Personnel and Development estimates that unemployment figures are likely to reach 2.85 million in the coming year, equivalent to 8.8% unemployment.  In principle, this figure should be independent of the claimant count – people who are unemployed do not necessarily qualify for benefits.  In practice, it may not be.  Part of the government’s current policy is to disqualify people from long-term incapacity benefits, in the form of Employment and Support Allowance.  The medical reassessments have led to many people leaving the benefit rolls – 36% of reassessments are brought to an end because the claimant is no longer entitled, but that reflects a certain turnover in the figures anyway (for example, among women who have had to claim sickness benefits while pregnant).   More important for the unemployment figures are the further 39% who are found to be fit for work.  It is not immediately clear how many of these people will go on to claim Jobseeker’s Allowance instead of ESA, but those who do will be redefined as actively seeking work.  If only a third of them make that shift, it will increase the unemployment figures by more than 300,000 – taking the figures well over three milllion.

Scotland refuses consent

The Scottish Parliament has refused legislative consent to the Welfare Reform Bill. There is considerable concern about the direction of welfare reform, especially relating to the treatment of disability, but it would be misleading to say that the concerns have gelled into a solid body of opposition. If people’s concerns have been diffuse and difficult to focus, it is because the Bill itself is so vague. It outlines principles for action, but it is still desperately thin on detail. The Coalition Government has taken the view that the Bill is only about broad outlines; the details will go into secondary legislation. More than a year after the White Paper, it is still far from clear how Universal Credit will work, what will be included, and what its implications will be.

The Legislative Consent Motion effectively asked the Scottish Parliament, then, to agree to the Bill without knowing what they were signing up to. The Health and Sport Committee (the Scottish Parliamentary committee that reviewed the motion) expressed concern that the effect of passing the motion would be to commit Scottish Ministers to come forward later with secondary legislation that would not be subject to scrutiny. Equally, the vagueness of the proposals makes it difficult for the Parliament to be sure what will happen after refusing legislative consent. The Parliament’s consent is needed mainly to ensure that UK legislation is compatible with Scots law, and refusing consent will not prevent the UK legislation from being passed. The most positive interpretation is that the UK government will have to bring forward primary legislation for the system to work in Scotland; but witnesses to the Committee raised concerns that the effect may be the suspension of benefits to Scottish recipients.

The Parliament’s action is more than a gesture. Benefits are a reserved matter – that is, they are governed exclusively from Westminster – but training for employment is a shared responsibility. When the Department for Work and Pensions has taken action in Scotland in the past, it has been done with the active cooperation of the Scottish government. The view of the government was that “they rely on our support”. Scotland will have to take responsibility, under the reformed system, for Council Tax Benefit, and it is likely that other responsibilities, including Housing Benefit and work formerly done by the Social Fund, will gravitate to the Scottish Government. It is difficult to see how Westminster’s programme can be implemented in Scotland without the Scottish Government’s co-operation.

People who have never worked

One of the recurring myths in the British social security system concerns generations of families who have never worked. The issue has been the subject of recent correspondence on the JISCmail list on Social Policy.

There are relatively few households in Britain where there are adults of working age that consist entirely of people who have never worked. The DWP has issued statistics for households and for individuals; this applies respectively to 1.7% of households of working age (about 350,000 households) and 1.4% of individuals. More than a third in both categories are adults under the age of 25.

The primary determinant of worklessness is the economy, and variations in the economy over time mean that the experience of previous generations is hardly ever the same as that of the current generation. Forthcoming work for the Rowntree foundation by Rob Macdonald, Andy Furlong and Johann Roden compares the search for “three generations who have never worked” to the hunt for the Yeti.

Are claims for incapacity out of control?

There’s been a lot of confusion about the stats issued for Incapacity Benefit, which was recently replaced by Employment and Support Allowance. The IB stats seem to show an increase of over a million people since the revision of the system in the mid -1990s. The Daily Mail reports that the figures trebled after 1979. That seems initially plausible, because we might expect incapacity to rise in line with unemployment, but it’s not actually true. In 1979, the principal benefits covering people now covered by ESA were Invalidity Benefit (contributory), Supplementary Benefit for people who were sick or disabled (means-tested) , Non-Contributory Invalidity Pension and Sickness Benefit. There were 1,463,000 claimants for those four benefits in 1979. There was a reduction in the early 80s when Statutory Sick Pay came in, and then a lesser increase when Severe Disablement Allowance replaced NCIP. The big increase for people with incapacities happened in the 1990s, and it mainly occurred in Income Support – the means-tested benefit – rather than in Incapacity Benefit. Incapacity Benefit figures may also have seemed to increase, but that was mainly because Sickness Benefit was taken into it in 1995, and Severe Disablement Allowance was rolled into IB for new claimants in 2001 – those inclusions probably account for 250,000 extra claimants.

The figures in contemporary reports have been retrospectively revised between 1997 and the present, in the apparent belief that people will find the numbers easier to understand that way. Unfortunately it’s led people to believe that claims have rocketed, when they haven’t. I’ve had to piece these figures together from different sources, which always raises questions about consistency, but subject to that, here are the counts in 000s of claimants for 1998, 2003 and 2008.

1998 2003 2008
Incapacity Benefit 1618 1586 1413
Severe Disablement Allowance 376 331 281
Income Support for sick and disabled people of working age 881 1100 1191
Total 2875 3017 2885

Sick note Britain?

A report by Carol Black and David Frost makes proposals that are supposed radically to reduce the flow of people moving on to Employment and Support Allowance. The argument that this can be done is built on the belief that the initial response to illness makes it more likely that people will adjust to long term sickness by claiming benefits. However, the most substantial reduction that is foreseen in the report is in the numbers of people who move directly to long-term benefits without going to employment in between. This group includes people who would formerly have claimed Severe Disablement Allowance.

Despite the reports about “sick note” Britain, benefits are not in general issued with sick notes – or “fitness for work notes” as we must now learn to call them. GPs didn’t, in general, get to sign people onto Incapacity Benefit, and they don’t sign people onto Employment and Support Allowance. However, there are some exceptions. If a person is not entitled to Statutory Sick Pay, typically because their employment has been terminated, they will be put onto ESA directly. If they have certain illnesses, principally terminal illness and life-theatening conditions, there may be no requirement to undergo a Work Capability Assessment. Those exceptions will be maintained. The main proposal in the report is that such claimants should move directly to the WCA. It is not immediately clear how this procedure is going to deliver a substantial cut in the number of successful claims.

Mis-reporting fraud

The BBC has been making some seriously misleading statements about fraud. A recent Panorama programme took people parking in “disabled” spaces and failing to occupy social housing as evidence of fraud. One claimant was filmed cycling; one was playing golf; another was gardening. People who claim incapacity benefit can indeed be found on occasion to take physical exercise. That is not evidence that their claim is fraudulent. People with mental illness, for example, may be fully able to use their bodies. People with restricted mobility may well be encouraged by their doctors to take exercise. The benefits are about the ability to work, not to walk. And people might have some personal wealth; some of the benefits are not means tested.

The bullying, censorious tone is made worse by mispresentation – for example the claim that fraud is costing £22 billion, when the DWP estimate for fraud is £1.2 billlion. The figures are reviewed by Ben Baumberg in a lucid posting at this address. For a more detailed consideration, view the sample chapter from How Social Security Works.

The length of claims

Results from the Work and Pensions Longitudinal Study are now available; the full spreadsheet is in a table. This shows the length of time of claims of different benefits for people of working age. The key figures are:

All claimants 1 year or less 10 years or more
All 4,744,510 1,770,930 1,019,620
JSA 1,328,910 1,111,110 1,050
ESA and incapacity benefits 2,586,420 421,790 922,930
Lone Parents 648,300 171,370 65,910
Carer 110,490 26,500 23,130
Others on income related benefit 70,390 40,150 6,600

Most claimants claim for less than two years. About a fifth of working age claimants are there for the very long term and about 90% of them are on incapacity benefits, which includes long term chronic disability. There is very little evidence of longer-term dependency if that group is excluded – there are very few long term claimants who are not incapacitated. There is no support in these figures, then, for the idea that people are being trapped in long term dependency by lack of incentives.