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Inside the battle to get sick Britain back to work

May 28, 2023May 28, 2023

Plans underway to get long-term sick back in employment as Universal Credit claims climb

It is more than a century since the first jobless benefits were paid in Britain, when David Lloyd George's Liberal government introduced unemployment insurance through the National Insurance Act of 1911.

The then chancellor's policy ensured around 2.5 million – mainly manual – workers were entitled to seven shillings a week on a time-limited basis, provided they paid a minimum of 4p a week into the scheme.

More than a hundred years later, the UK's benefits system is far more complicated and exponentially more costly.

The Department for Work and Pensions (DWP) estimates that welfare spending on people with disabilities and health conditions alone will hit £100bn by 2027, up 77pc from pre-pandemic levels, while the bill for those of working age is on course to rise 84pc to £77.5bn over the same period.

This comes at a time when official figures show long-term sickness – not early retirement – is to blame for record levels of inactivity in Britain.

There are now more than 2.5 million people out of work because of long-term health conditions. Almost half a million more are struggling with mental and physical health issues such as anxiety, repetitive strain injury and back pain compared with a few years ago, with 360,000 more economically inactive people than before the pandemic.

Experts warn the current system has created a "lost generation" who may never work again because it incentivises them to remain on benefits.

The Centre for Social Justice (CSJ), co-founded by former Tory leader Sir Iain Duncan Smith, believes there are now 3.7 million people on benefits who have no obligation to even consider work and do not have any work related requirements imposed on them.

That number grew by around half a million during the pandemic and represents more than half of the 5.2 million people currently receiving out of work benefits. It has also coincided with a massive expansion in remote fit-for-work assessments.

The CSJ estimates this group currently costs taxpayers up to £25bn each year in welfare payments.

The number of people on Universal Credit (UC) in this category hit two million for the first time in April. This has trebled since the start of the pandemic and is up from just over 1,000 since UC was first introduced in the mid 2010s.

For a decade, Billi Rathbone was one of them. The 28 year-old grew up in Tyneside with her younger brother and sister. She says her environment influenced her own career choices.

"My mum has never worked," she says. "She volunteered at one point, but she's never had a job. And I think it was easier [to claim benefits], because I knew how the system worked. I knew how much I’d get. I knew when I’d get it. It was just so much easier to do what I’ve always known."

Billi broke the mould when she landed a job in Burger King as a teenager, though it took both her and her mother out of their comfort zone.

"I know my mum was proud of me for getting a job," she adds. "But at the same time, she told me: if you’re working, my rent is going to go up because you’re living here. And I think that was also a big thing about not enjoying work because I was constantly worrying about money – and I hated it."

But soon after she started her job, Billi was assaulted. The experience sent her mental health into a downward spiral, and ultimately led to her being assessed as having "no work requirements" by the DWP. She says the status gave her financial security, but it also led to a decade on welfare.

Statistics show that many who begin receiving benefits continue to receive them for years. "We know that once people are receiving benefits because of their limited capability to work, they are very unlikely to move off the benefit and into work," noted a DWP green paper published in 2021.

Figures citing people claiming Employment and Support Allowance (ESA), a legacy payment that used to be known as incapacity benefit, shows that "only 1-2pc of people in the [work activity group] and less than 1pc of people in the [no work required group] leave the benefit each month".

Almost half of the 1.5 million people claiming ESA with no work requirements cite mental health conditions, such as stress and anxiety, as the cause. These people do not have to attend any interviews and any engagement with the job centre is on a voluntary basis.

In addition, more than half a million people on Universal Credit with no work requirements – or 25pc of the total – have been claiming benefits for more than four years, according to DWP data.

Many will never be able to work; some are in their last years of life; others care for a severely disabled person or young children. But an increasing number of new claimants are legally exempt from work due to mental health problems, driving a surge in sickness benefit spending.

The CSJ estimates there are around 1.2 million more working-age benefit claimants today than if pre-pandemic trends had continued, including more than 260,000 extra claimants with no work requirements.

It's an upward trend that shows no signs of abating: the "no work requirements" group on Universal Credit overtook the number of people "searching for work" in April 2022. Some of this is due to people migrating from ESA, but the caseload is also growing. DWP data show that around two-thirds of claims for new-style ESA also result in a no work requirement assessment.

This increase in the number of people not required to look for work has come alongside a change in how claimants are assessed since the pandemic.

Maximus, the main company tasked with determining whether people are fit for work, told the cross-party Work and Pensions Committee (WPC) that the number of face-to face assessments fell sharply during the pandemic, with so-called Work Capability Assessments (WCAs) remaining mostly remote ever since.

In the year before the pandemic, 762,000 of just over 1 million WCAs were carried out face-to-face. This fell to just 27,000 in 2021-22 as the UK came out of lockdown, with almost half a million assessments conducted remotely via telephone or video call, and 87,000 completed on paper.

"The majority of assessments continue to be remote despite the resumption of face-to-face services," the WPC noted in a report published in April.

Billi says her engagement with the job centre was also limited.

"There would be times when I’d get a message from an adviser saying ‘If you’re thinking about going back to work don't hesitate to ring us, we’re here to support you’," she adds. "But there was still something in the back of my mind that said if I ring them and say ‘maybe I could work’ or ‘maybe I am a little bit ready’, then they’d be like ‘we’re stopping your sick money straight away’."

Official statistics suggest there are more than half a million people classified as long-term sick who would like to work, while the CSJ estimates the figure is at least 700,000.

Joe Shalam, director of policy at the think tank, says that the government needs to refocus its attention on helping these people.

"This is not an army of the work-shy and feckless, as some commentators like to suggest," he says. "While many people's conditions and circumstances make work impossible, what is so striking is that so many want to work and think they could with the right support."

The DWP insists more help is on the way. Jeremy Hunt announced a new "Universal Support" scheme in the Budget designed to provide training opportunities that match people with disabilities and long-term sickness with jobs they can do, and keep them there through extra support. The Chancellor says this will help up to 50,000 people per year into work and keep them there with specialised support.

The Government also wants to scrap the current 24-page fit-for-work assessment and replace it with one that focuses on what people can do, moving away from what the Centre for Policy Studies (CPS) describes as "perverse incentives" for people to exaggerate their illness in order to maximise benefit payments.

The reforms are designed to support people into work while providing a safety net that ensures they will not immediately lose financial support. However, the DWP itself concedes that the complex nature of reforms means they will not start being rolled out at least until after the next general election, by which time spending on disability benefits is forecast to balloon by another £30bn. It also says the programme will not be fully implemented until at least the end of the decade.

John Glen, the chief secretary to the Treasury, admits the Government – as well as those on benefits – should do more. "Most people don't want to be written off, but they need help and encouragement to get back into the workforce", he says.

Glen identifies those with long-term conditions as his next focus "We know that two and a half million people identify as long-term sick," he adds. "I just don't believe that all of those people are completely incapable of some level of work."

The DWP also points to a number of ongoing pilot schemes, including Working Well in Greater Manchester, which provides tailored help to people with health conditions. Some policymakers want this to be rolled out nationally, though costs remain a concern.

Insiders also acknowledge that scaling them up means hiring more health professionals. But there are not enough qualified people to meet demand, and training new staff takes time.

Shalam says the experiences of people like Billi suggest new schemes like Universal Support will not get people back to work unless it is tied to a cast-iron guarantee that people will not be punished if they quit.

Billi says the fear that her benefits would be snatched away meant she actively avoided the job centre when searching for work. Instead, she relied on the support of friends to try work again, eventually finding a job as a work coach in Howden, North Tyneside that she started last month.

"I did have a bit of a mental breakdown during the application process because I felt like I had hardly anything to put on it. I felt stupid," Billi says.

Though she persevered, not everyone has the help they need. The CSJ is calling for an "Into Work Guarantee" that ensures people are not penalised with a reduction in benefits if they leave that job within a set period. Labour has already said it will adopt the policy.

While there is already a provision in the current rules that allows people to do this, the system is clunky, complicated and not well advertised. In the case of incapacity benefit, it's also difficult to administer because ESA applications are closed to new members.

Billi says a guarantee like this would have given her more confidence to look for work.

"Even up until the day I got my first paycheck, I was scared to ring the jobcentre to say I’ve started work in case they were like ‘You were sick, why are you not sick any more?’" she says. "I was so scared that I’d be accused of fraud and they’d send me to jail. So I wouldn't have dared ring them to say I wanted to look. I was too scared they would stop my money and I wouldn't have been able to afford to live."

Billi now earns just shy of £22,000 a year in her new job – and loves the financial freedom. "I’ve started driving lessons. Something I never ever, ever thought I’d ever be able to afford," she says. "I was able to book a holiday. I was able to give my mom money. This job has changed my life."