Written evidence from Scope

About Scope

Scope is a pan-disability charity. Scope exists to make this country a place where disabled people have the same opportunities as everyone else. Until then, we’ll be here. We provide support, information and advice to more than a quarter of a million disabled people and their families every year. We raise awareness of the issues that matter.

Introduction

Forty eight per cent of disabled people are in work compared to 81 per cent of non-disabled people[1]. This gap, known as the disability employment gap, has stood at around 30 percentage points for over a decade.

Scope welcomes the Government’s commitment to halve this gap[2]. Supporting more disabled people to take up employment would help to increase individuals’ economic and social mobility, as well as deliver substantial economic growth for the country.

However, there is inconclusive evidence to suggest that sanctions are effective in encouraging disabled people to take up employment. Instead, the use of sanctions for disabled people has an adverse impact on individuals’ financial wellbeing, making it harder for them to enter work.

Disabled people and sanctions

Disabled people may be in receipt of one of a number of benefits whilst out of work or whilst working a few hours, including the Work Related Activity Group (WRAG) of Employment and Support (ESA), Jobseeker’s Allowance (JSA), Universal Credit and Income Support. Receipt of each of these benefits is dependent on individuals fulfilling certain conditions. For example, someone in receipt of ESA WRAG would be expected to take steps towards finding work, e.g. work placements, training or regular meetings with Job Coaches.

If people do not meet the conditions set, then they may be subject to a sanction, meaning the amount of benefit they receive may be reduced or stopped for a period of time. In 2015, 17,000 decisions were taken to apply sanctions to individuals in receipt of ESA[3]. In 83 per cent of cases, this was as a result of not participating in work related activity[4].  

1. Sanctions and financial resilience

Disabled people are more likely to be out of work for longer periods of time, placing them in a poor financial situation. This is indicated by the fact that 60 per cent of people on JSA move off the payment within six months, while almost 60 per cent of people who receive the WRAG element of ESA need this support for at least two years[5].

Furthermore, disabled people have a lower level of financial resilience, with an average of £108,000 fewer savings and assets than non-disabled people[6]. Disabled people are also twice as likely (16 per cent) as households without a disabled member (8 per cent) to have unsecured debt totalling more than half their household income[7].

The loss of income through sanctions will make it more difficult for disabled people to afford costs related to preparing and looking for work, e.g. any costs for additional education or training, or costs for travel, childcare or formal work attire when undergoing interviews. Whilst the Flexible Support Fund can help with these expenses, there is no automatic entitlement to support as someone’s local Jobcentre Plus will decide whether to meet any costs.

As such, sanctions will hinder efforts to increase the employment rate amongst disabled people, which is a lost opportunity for the economy – a 10 percentage point rise in the employment rate of disabled people would increase GDP by £45bn by 2030 and result in a £12bn gain to the Exchequer[8].

2. Disabled people’s engagement with employment support

Around 40 per cent of unemployed disabled people say that they want to work[9]. However, there is insufficient evidence to show that sanctions are successful in helping disabled people to realise these ambitions.

For instance, evaluation of the mandatory Work Programme commissioned by the Department for Work and Pensions (DWP) found that telling participants they may see a reduction in their benefits leads to worse job outcomes[10]. By contrast, Work Choice, a specialist support programme for disabled people where participation is voluntary, has delivered much better results for disabled people, with more than half of all participants securing work[11].

Furthermore, the National Audit Office (NAO) reports that there has been an inadequate assessment of the impact of sanctions in the UK on people’s behaviour and employment outcomes[12]. Whilst research indicates that benefit sanctions may raise benefit exits in the short term, they lead to unfavourable longer term outcomes in earnings, job quality and employment retention[13].

Preliminary analysis by the NAO supports this conclusion, with sanctions shown to reduce the time Employment and Support Allowance claimants spend in employment, particularly part-time employment[14]. To see a lasting reduction in the disability employment gap, the Government should shift the focus of jobcentres from short term benefit exits towards achieving sustainable long term employment for disabled people.

The DWP should lift requirements to engage in work related activity and attend work focussed interviews as conditions of receipt for income-replacement benefits for disabled people. This should apply to current and new claims for Jobseeker’s Allowance, Employment and Support Allowance and Universal Credit.

Through Universal Credit in-work progression, claimants on low incomes may be required to increase their earnings by working more hours each week or looking for higher paid work. If someone doesn’t meet this requirement, they may be sanctioned and see a reduction in their payments.

However, some disabled people choose to work part-time to enable them to manage their health or wellbeing - 14 per cent of disabled people report that their decision to work reduced hours related to their impairment or condition[15]. Requiring them to increase their earnings or working hours could compromise this.

The DWP should exempt disabled people from in-work progression requirements within Universal Credit. Work Coaches should offer tailored in-work support to disabled people who want to increase their earnings to enable them to do so.

Disabled people placed in the WRAG of ESA are often required to engage in support that is not appropriate to their needs.

The Work Programme for instance has been successful for some groups – achieving a job outcome rate of 24 per cent for JSA 25+ customers[16]. However, it has not been successful for disabled people – only seven per cent of new ESA claimants and two per cent of other ESA/Incapacity Benefit claimants have had a job outcome after a year on the programme[17].

For the Government to drive a substantial increase the disability employment rate, all unemployed disabled people who want to work should have access to advice and support from organisations with expertise in overcoming structural barriers to work, regardless of their benefit entitlement.

Access to this support should be wholly voluntary, without any conditions relating to financial support. It should also be flexible and tailored to the needs of participants.

The Government’s consultation into improving support for disabled people in and out of work, “Improving Lives”[18], proposes the idea of a ‘keep-in-touch’ discussion with work coaches for people in the Support Group to stay in touch with the Jobcentre. This could be a voluntary or mandatory requirement, yet as indicated above, disabled people are more likely to move towards work when they choose to engage with employment support services.

Offering support on a less rigid basis than other statutory programmes would be particularly important for those in the Support Group, and would allow those people with fluctuating conditions to engage at points that suit them.

The DWP should develop and promote a voluntary, specialist employment support offer for people in the Employment and Support Allowance Support Group. 

3. Wider financial impact of sanctions

Analysis by the NAO shows that there are a number of financial costs to the Government from the use of sanctions.

This includes the cost of administering sanctions, estimated to be £30 -50 million[19]. Alongside this, there are costs to cover hardship payments, which provide temporary financial support to people who have been sanctioned to cover the cost of essential household expenses like food and bills – in 2015, an estimated £35 million was spent on these payments[20]. 

The estimation in the same year for the amount in benefits not paid due to sanctions being imposed is £132 million. Whilst the NAO has not been able to estimate the overall net cost or benefit of sanctions[21], it is clear that their use subsequently results in significant direct and indirect costs, without any meaningful improvement in employment outcomes for disabled people. Instead, the money spend on sanctions should be directed towards what works in helping disabled people to move into work – voluntary, specialist employment support.

Scope,

December 2016

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