Www.cjmentalhealthconsultancy.co.uk The future of Welfare Reform And Employability programmes Chris White CJ Mental Health Constancy S.U.S.E AGMSeptember

www.cjmentalhealthconsultancy.co.uk

The future of Welfare Reform

And

Employability programmes

Chris White

CJ Mental Health Constancy

S.U.S.E AGM September 2011


The changing face of Welfare

A number of important outcomes for the Scottish population have improved since the late 1990s but, on most key

dimensions, inequalities have remained unchanged or become morepronounced.


Inequalities in Scotland

the gap between the top and bottom of the distribution in key outcomes such as income, employment, health, learning andsafety is significantly wider in Scotland than in other European countries

A number of important outcomes for the Scottish population have improved since the late 1990s but, on most key dimensions, inequalities have remained unchanged or become more pronounced.

the employment rate for working age adults without disability is 82 per cent, while it is only 47 per cent for disabled working age adults

The Christie Commission: June 2011the future of public delivery services in Scotland


A short history of reform

1997 New Deal launched.

1999 National Minimum Wage introduced.

2002 Creation of Jobcentre Plus

2003 Introduction of Tax Credits

Pathways to Work introducing mandatory requirements

2006 “A new deal for welfare: Empowering people to work”

2008 Employment and Support Allowance New Work Capability Assessment“Black Friday” October 10th UK Banking system collapses

2010 6 May General Election - No party has overall control


Welfare under the coalition

Bad Con?George Osbourne"Those making a 'lifestyle choice' to just sit on out-of-work benefits would be affected."

Good Con?Iain Duncan Smith"The purpose of my life here is to improve the quality of life of the worst of in society”.


Employment Support Allowance National Roll-out

4 year plan to migrate IB claimants over to ESA.

Oct 2010 IB migration due to start in Aberdeen and Burnley

Jan 2011 Linked rules abolished all new claims will be for ESA

Feb 2011 IB migration started across the UK

Mar 2014 All claimants will have moved to ESA


Unemployment in the UK

JSA claimant count in August rose by 20,300 to 1.58 million.

Youth unemployment rose sharply - by 78,000 to 973,000


ESA on-flow (before migration)

ESA on-flows by month of claim start and result of initial assessment after the effect of appeals - Aug 2010 (1,175,700 claims)

SupportGroup

WorkRelatedActivity

Fit for Work Claim Closed Assessmentphase

Total 77,100 (7%) 235,800(20%)

407,300(35%)

428,800(36%)

26,700 (2%)


ESA Appeals (before migration)

Before ESA migration over 1/3 of people appealed the fit for work decision with 39% of those appeals successful

Fit for Work AppealsHeard

Decision infavour ofappellant

DWPDecisionupheld

335,900 (7%) 122,500 48,000 (39%) 74,400 (61%)


Employment Support Allowance National Roll-out

Incapacity Benefit Statistics

UK Scotland

Total Claims 2,176,530 239,550

No with a MH problem 943,390 (43%) 110,110 (46%)

DWP statistics Feb 2010 Early DWP estimates suggest that, following any appeals, around 234,000 (10.75%) people are likely to be found fit for work.

www.dwp.gov.uk/docs/incapacity-benefit-reassessment-faqs.pdf

Earlier this week Iain Duncan Smith said 23 per cent of people would be judged “fit to work”. 58 per cent would receive ESA but would be required to do work related Activities. 19 per cent would be unable to carry out any form of work.


Reviewing the WCA

Professor Harrington 1st Review Recommendations• Simplified WCA descriptors• empowering and investing in Jobcentre Plus Decision Makers• Jobcentre Plus taking control of the process and supporting

individuals through it• Atos employing “champions” at each Medical Examination

Centre.

Professor Harrington 2nd Review evidence call Sept 2011

Expected Report - January 2012


The immediate challenges for Employment Services

• Welfare Reform was devised during a period of falling unemployment and higher demands for labour

• Implementation however is during a global recession with rising unemployment and falling demand for labour

• Increasing competition in the labour market• Pressure both internally and externally to significantly reduce

public spending• Resistance and resilience to welfare to work programmes

caused by economic factors, previous negative work experience, and insecurities caused by the benefit system.


Conservative Welfare Reform Plans

Universal Credit

• Replace all income-related out-of-work benefits and Tax Credits • with a one new Universal Credit• combine elements of the current income-related benefits and Tax

Credits systems;• bring out-of-work and in-work support together in a single system;

and• supplement household earnings through credit payments,

reflecting circumstances (including children, housing and disability).


Welfare Reform Bill 2011

The main elements of the Bill are:

• introduction of Universal Credit to provide a single streamlined benefit new expectations on claimants

• Introduction of the Personal Independence Payment

• Housing Benefit reform to improve incentives to work

• driving out abuse of the Social Fund system by giving greater power to local authorities

• Reform of Employment and Support Allowance

• changes to child support

• devolution of the discretionary elements of the Social Fund


Universal Credit

• Replace all income-related out-of-work benefits and Tax Credits with a one new Universal Credit

• combine elements of the current income-related benefits and Tax Credits systems

• bring out-of-work and in-work support together in a single system

• supplement household earnings through credit payments, reflecting circumstances (including children, housing and disability).


Greater incentive to look at work

Working on benefits affects individual benefits differently, and often acts as a disincentive to work.

Introduce one set of earnings disregards and for earnings above that level benefits will be withdrawn at a single withdrawal rate.

E.g. someone on Income Support can earn up to £20 without affecting benefit, but for every £ they earn above that they lose £1 in benefit.

Using a taper then they would still be able to earn £20, but they would keep 25% of any earnings above that figure


Conditionally

Individuals who are able to look for work or prepare for work should be required to do so as a condition for receiving benefit and those who fail to meet their responsibilities will face a sanction including:-

• reduced benefit

•REMOVAL of BENEFIT


Housing Benefit

• Housing Benefit which costs £21billion a year. • George Osbourne described Housing benefit as “completely out

of control”• limit of- £280 a week for a one-bedroom home to £400 a week

for a four-bedroom property• reduction for under-occupancy The average cut for a household

with one spare room will be £11 a week• Pay Housing Benefit direct to the claimant• Introduce more generous tapers to help people move into work


Breaking the Welfare Contract

One of the most controversial parts of the proposed welfare reforms is limiting Contributions based ESA

•National Insurance is a government insurance scheme

•Covers worklessness through sickness, disability and old age•Currently if you have paid enough NI cover is provided indefinitely

•In future Contributions based ESA will be limited to 1 year


Personal Independence Payments

From 2013/14 Disability Living Allowance (DLA) will be replaced by Personal Independence Payments.

People will undergo an “objective medical assessment” to ensure payments are only made for as long as a claimant needs them.

daily living component standard rateenhanced rate

(appears to be no equivalent of DLA low rate care)

mobility component standard rateenhanced rate


Reducing Fraud and error

fraud and error problems account for 3% of welfare spending

costing the taxpayer £5.2bn a year.


Is welfare reform deliverable?

How realistic is a £5billion fraud and error cost saving projection?

Can HMRC to meet its Universal Credit targets

Is Universal Credit really a simplified system capable of the flexibility promised?

Can a coalition government progress the reforms through all the both the House of Lords and House of Commons?


Is welfare reform deliverable?

How realistic is a £5billion fraud and error cost saving projection?

Can HMRC to meet its Universal Credit targets

Is Universal Credit really a simplified system capable of the flexibility promised?

Can a coalition government progress the reforms through all the both the House of Lords and House of Commons?

Documents

Www.cjmentalhealthconsultancy.co.uk The future of Welfare Reform And Employability programmes Chris White CJ Mental Health Constancy S.U.S.E AGMSeptember