Who benefits?

In Parliament this week, David Cameron rejected arguments that benefits for people with disabilities will be lower. This is from Hansard on 17th October:

Mr Bain: … Last week the Prime Minister promised that work would always pay, but this morning Baroness Grey-Thompson and the Children’s Society have revealed that his current plans for universal credit next year will mean that up to 116,000 disabled people in work could lose as much as £40 a week. Does not that say everything about how this divisive Prime Minister always stands up for the wrong people? At the same time as handing huge tax cuts to 8,000 people earning over £1 million a year he is going to penalise some of the bravest strivers in our country.

The Prime Minister: The hon. Gentleman raises an extremely serious issue; let me try to deal with as fully as I can. The money that is going into disability benefit will not go down under universal credit; it will go up. The overall amount of money will go from £1.35 billion last year to £1.45 billion in 2015. Under the plans, no recipients will lose out, unless their circumstances change. All current recipients are fully cash-protected by a transitional scheme. On future recipients, we have made an important decision and choice to increase the amount that we give to the most severely disabled children, and there will be a new lower amount for less disabled people. That is a choice that we are making. As I have said, we are increasing the overall amount of money and focusing on the most disabled. That shows the right values and the right approach.

Some of the points here are unclear. There is no such benefit as ‘disability benefit’, so it is hard to tell just what the PM is referring to – it is not ESA or the Income Support that is going to be included in Universal Credit. I am not sure which benefit cost £1.35 billion last year, but my best guess is that it was Disability Living Allowance for children, which was forecast in the last budget to be £1.31 billion. If that’s right, the figure is irrelevant – this is not a benefit that is going to be affected by Universal Credit at all. Current recipients are only protected ‘unless their circumstances change’, and that will include movements into and out of work, and reaching school leaving age.

Probably more important than the precise figures, however, is the general message. The PM says here that the government is “focusing on the most disabled” and that this is “the right approach”. But this approach was apparently rejected by Lord Freud, the responsible minister, in last month’s evidence to the Work and Pensions Committee, when he explained that the priority was to liberate disabled people by giving them opportunities to work (see my note on A zero-sum game, 11th October). Is the government giving priority to those who are most disabled, or those who might be able to work? They are not often the same people.

Alternatives to DLA

Disability Living Allowance has been widely defended – I’ve signed a petition myself – but there are problems with it, and those problems seem set to continue into the reformed PIP.

The first problem is comprehensibility. The DWP’s evidence on claims suggests that people don’t understand the criteria, that they have a go at claiming benefits regardless, and that for many people it’s simply seen as an add-on to Incapacity Benefit/ESA.

The second problem is fairness. Older people don’t get DLA, and that means they don’t get the element in DLA for mobility. That’s been the case since the 1970s; older people were excluded, simply enough, because most people with mobility problems in the UK are elderly, and it would have cost a lot. However, older people who become entitled before the age of 65 can get an extension of DLA – which means that two people who have had strokes, one at age 63 and the other at age 67, will be treated differently – and the older person will not get the benefit if if that person’s condition is more serious.

The third problem is testing. Disabilities don’t always come in neat, predictable packages. People have good times and bad times. Their capacity varies. PIP is supposed to take fluctuating conditions into account, but frankly there’s little hope it can do it effectively. There is also the problem that people who make the best of things will be penalised for doing it. The most practical way of dealing with this is to have different types of qualifying condition. In the same way that we don’t test someone with no feet – that exception is made in the current system – we should be able to rely on a diagnosis of blindness, or paraplegia, or terminal illness, or brittle bones, and so on. The more conditions we can identify in these terms, the less the scope for testing. If that means that some people will qualify who might not otherwise get the benefit, so be it.

Attendance Allowance and DLA are not carefully designed benefits catering for identifiable needs; if they were, older people wouldn’t be cut out. They’re benefits for severe disability, and the tests and the components are a complex way of separating out people with more severe disabilities. Currently, nearly 5 million people get the benefits – 3 million on DLA, 1.9 million on AA. About a million DLA claimants are over working age, so it’s true that most claimants of both benefits are older, but when that’s set against the population of people with disabilities, older people are probably still under-represented. Let’s imagine that we want a benefit to cover five million people with varying degrees of disability. What should it look like? We should be aiming to create a system that is comprehensible, to respond globally to specific conditions, and to support people reliably into older age. The ideal is probably something like the ‘Disablement Allowance’ long advocated by the Disability Alliance. It wouldn’t look much like DLA, or PIP.

Assessing PIP

The DWP has announced that two firms will be contracted to deliver the new Personal Independence Payment (PIP) assessment. They are Atos, who will cover Scotland, North East, North West, London and Southern England, and Capita, who will cover Wales and Central England. Atos’s appointment will be particularly controversial, but it is difficult to see who else has the capacity to deliver what the government is asking for.

Computer Weekly is not part of my usual reading, but their coverage has been exemplary: click here to find the articles. From them I read that the ATOS contract is worth £400m, and the Capita contract £140m; there is another contract still to be decided.

From the 2012 Budget documents, we know that what the government hopes to save from reforming DLA is zero this year, £355m in 2013-14, £1055m in 2014-15 and £1415m in 2015-16. In other words, the contracts are larger than the early savings. I suggested in this blog on April 20th that the proposed reforms were not likely to deliver the savings that the government wanted. If I’m right about that, this process could end up costing the government a large part of what it saves.

The impact of DLA changes

Last week, I was asked what I thought the impact would be of DLA changes, but I didn’t feel I could give a sensible answer. The problem I have is straightforward. If the Personal Independence Payment removes the lower rate of the care component, it is not possible to assume that the same number of people will get the new care component as those who currently get the higher and middle rates of DLA. Part of the problem, too, is that it’s never been very clear on what basis people get the lower rate rather than the middle rate – it often hangs on a distinction between care for “a significant portion of the day” and “frequent care throughout the day”. Welfare rights advisers just encourage claimants to put in an application regardless, and that’s what they will need to do with the new rules when they’re finalised.

Today, I’ve just seen the government’s response to the Joint Committee on Human Rights, and it looks as if the government can’t give a sensible answer either. They comment that “The ability to undertake cumulative analysis is limited because of the complexity of the modelling required and the amount of detailed information on individuals and families that is required to estimate the interactions of a large number of different policy changes.”

Personal Independence Payment

I have been looking at the consultation paper about Personal Independence Payment with some puzzlement.
The purpose of this reform was to replace the Disability Living Allowance, which the government thought was broken. This reform holds to the same basic structure as DLA – “care” and “mobility” components, and the denial of mobility support to older people unless their condition develops earlier. There is very little in the document which tries to deliver what the government claimed they could deliver – a personalised, sensitive and responsive benefit, administered through professionals. That is probably a good thing; it may make sense for physical support and care to be highly responsive, but people want and need support for income to be stable and reliable. There is also little in the reform that deals with the kinds of issues that have presented genuine problems, notably the response to mental disorders and conditions like multiple sclerosis that fluctuate frequently. That is not so good; people need the system to be consistent and predictable, and at present there is little prospect of either. As so often happens in benefit reform, it seems all too likely that the government will discover that their reforms have not had the effect they imagined, and they’ll have to come back for more.

The reassessment of DLA

New announcements have been made about the procedure for transferring people from Disability Living Allowance to Personal Independence Payment. The DWP is anxious to reassure claimants that this will not be a repeat of the ESA fiasco, though the lack of detail about eligibility and assessment procedures does not inspire confidence. They are beginning in 2013 with new claims in five areas. People who are terminally ill, children under 16 and most older people over 65 will be exempt. The guidance says however that “We want to see how the assessment for the new benefit works for people of working age before deciding if Personal Independence Payment should be extended to people over 65.” As older claimants now account for fully a third of of the benefit payments, it is difficult to see how the reforms can produce the Treasury’s predicted economies unless they do.

More on Personal Independence Payment

Following the Lords debate, and disquiet in the press, I should perhaps add a further comment on PIP. The government’s assumption that the reformed new benefit will have fewer claimants than DLA seems mainly to have been predicated on a longer qualification time, removal of those with lower dependencies and some special rules, like the removal of some entitlements to people in residential care. At the same time, the government is proposing a redefinition of rules which will make the benefit more accessible to people with psychiatric illnesses; and it has made no proposal about the very large numbers of older people who have continued on DLA in preference to claiming Attendance Allowance. If that was the whole story, it could mean that PIP will have as many claimants as DLA; it might even have more. But it is not the whole story. The prospect of reducing the number of claims radically seems to depend primarily on the process of re-assessment and disqualification of existing claimants, and the government does not need its reforms to pass to achieve that.

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.”

Reforming Disability Living Allowance

The government is reforming Disability Living Allowance, replacing it with a Personal Independence Payment. It is probably fair to say that DLA has lost its focus. The component elements were initially intended to cover care needs and mobility needs. The benefit is increasingly used by people with mental illness. People over working age, who now account for third of the costs of the benefit.

The proposed reform, however, is based – like several other proposed reforms – in the belief that the appropriate approach is to improve assessment, to make the tests more sensitive to individual needs, and to make the system more responsive to changes in circumstances. This is the opposite of what the government ought to be doing. Personalised assessments are administratively complex, cumbersome, and often unfair. People find it difficult to descrIbe their circumstances, and impossible to place their needs in a scale relative to others. They do not understand why their condition is assessed as severe or less severe, and it is not reasonable to expect them to do so. Many conditions fluctuate; conditions like multiple sclerosis, or arthritis do not have a consistent effect on capacity over time and cannot sensibly be responded to as if they did. The direction of movement should be towards greater automaticity, not less. The benefits assessment should offer fixed awards for specific conditions for set periods.

See Cm 7984, Disability Living Allowance reform, London: The Stationery Office