Social Security and Welfare Reform

Iain Duncan Smith and the misdiagnosis of ESA

  • Published: Aug 25, 2015
  • Author: Ceri Hughes
  • Category: Social Security and Welfare Reform

Yesterday, in what was billed as a major speech on welfare reform, the Work and Pensions Secretary Iain Duncan Smith indicated that the Employment & Support Allowance benefit would be subject to further reform measures. The speech itself was light on actual policy announcements, but the Work and Pensions department has clarified that it was meant to signal the start of a conversation about welfare reform in this area. But a conversation is pointless unless participants share a common language: recent announcements from the Secretary, and from the Chancellor in last month’s Summer Budget, suggest this is lacking.

The Secretary argued that the ESA system is ‘binary’, with people assessed as either ‘fit’ or ‘unfit’ for work. But this is not an accurate description of the way people are categorised within the benefit. People may be deemed ‘fit for work’ and therefore ineligible for the Employment and Support Allowance, but those who are entitled to ESA are placed into two further groups. Those in the Support Group are judged to be both unable to work and unable to undertake ‘work-related activity’. The Work Related Activity Group, meanwhile, comprises those who are ‘unfit’ for work but who are expected to engage in work-related activity. This group, consisting of some 530,000 claimants in 2014, might therefore be said to occupy the very grey area that the Secretary suggests is missing from the current ESA system.

The Chancellor did not forget the Work-Related Activity group in last month’s Summer Budget, announcing plans to reduce the amount of benefit paid to this group to the level of Jobseeker’s Allowance payments. The rationale presented at the time was that the WRAG have a ‘perverse incentive’ to remain on benefit since they ‘receive more money a week than those on Job Seekers Allowance, but get nothing like the help to find suitable employment’. The difficulty here is that people in the WRAG group are not the same as ‘jobseekers’. They are people with health conditions who face significant barriers to employment and who have been assessed as not fit for work.

Some confusion over the characteristics of people on ESA is perhaps understandable – the Employment and Support Allowance has been subject to significant reform in recent years – but we should expect those in charge of administering the system to be more precise in their language, especially as they set the terms of the debate.

The graph below provides a snapshot of outcomes for ESA claims since early 2011. As we have previously set out, many claims take much longer than the official 13 week assessment phase. To enable comparison over time, the graph describes outcomes for new claims 6 to 9 months into the assessment process. It shows that an increasing number of new claims are being placed in to the Support Group whilst the number being moved on to JSA (i.e. those found Fit for Work) has shrunk. 



Criticising ESA claimants for not behaving like people on Jobseeker’s Allowance is contradictory given that this group will have been through a lengthy assessment process to determine that they are not jobseekers. But that is not all. Many applicants are still waiting a long time for their claim to be resolved: since early 2013 more people have been waiting for a decision on their claim 6-9 months in to the claim process than have had a decision made on their claim. This is a key administrative failing on the part of the DWP and their contractors and one that needs to be resolved before anyone starts asking questions of ESA claimants or reducing the benefits of the WRAG group.

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