Pathways to Work: How Work, Health and Skills Services need to work Together to Transform Lives

There’s a couple of things going on in the Pathways to Work Green Paper. Firstly, the Government is worried about the rising costs of disability benefits (which support people with the extra costs of having a disability) and incapacity benefits (which provide extra financial support for those the Government assesses as too ill to work). The total bill is up 40% since 2013 and projected to rise to £100 billion by 2029-30. The Government wants to limit that rise so that, within their fiscal rules, they can meet funding pressures from other public services and defence.

Secondly, the Government doesn’t think the current system is working for people either. For many disabled people the current system is stressful and doesn’t feel supportive. Incapacity benefits are too often a binary split between able to work or not able to work, with little support offered to those in the latter category even if their situation changes. Little surprise then, that, only 1% of people economically inactive due to long-term sickness are in work six months later.

To change this, the Government is limiting who will be eligible for disability benefits and abolishing the Work Capability Assessment, which determines eligibility for incapacity benefits. In future, if you’re too ill to work you’ll only get extra money in your Universal Credit if you receive the daily living element of Personal Independence Payment (the main disability benefit).

This, and the benefit system as a whole, is all very complicated. But it essentially means that over time up to one million people could get £2,000 per year less than if they were claiming now. That’s a big change, especially when added to the changes to disability benefit eligibility which means some people eligible for PIP today wouldn’t be in future. It’s this that’s driving most of the Government’s savings on benefits, and it will have real impacts on people’s lives. We await the Government’s impact assessment to see how many people will be affected and by how much.

What is positive to see is the commitment to a sustained increase in employment support for people receiving incapacity benefits. There are 3.5 million such people, up one million since the pandemic, and they currently get very little help even if they want a job or to prepare for work. The Government’s plan is to invite incapacity benefit claimants for Support Conversations to hear about the help available, but with no obligation to take it up.

That’ll be backed by £1 billion extra employment support by 2029-30, almost doubling current spend assuming this is a real growth (the Spending Review will tell us), for those that do want help. It could help an extra 250,000 people per year.

As it happens, an expansion of voluntary employment support and regular catch-ups with claimants (along with a guarantee you don’t have to reapply for benefits if you try work and it doesn’t work out) is almost exactly what Learning and Work Institute proposed in our recent Benefit trap report.

As we also said in that report, the benefit system can never be all of the answer. We need work, health and skills services to be more joined up, greater work with employers to promote healthy workplaces and open recruitment, and for all of this to be sustained over a decade or more. This is not a time for quick fixes or short-term cuts.

And it’s worth ending with the real reason all this matters, beyond the Treasury spreadsheets. At the moment, people are not getting the help they need and want. Two in ten out-of-work disabled people say they want to work, but only one-in-ten get help to find work each year. We should provide better support for those that can’t work, and better help for those that can.

We estimate that could help 500,000 people into work over the next decade, a quarter of what’s needed to get to the Government’s 80% employment rate ambition and, more importantly, half a million lives transformed.

By Stephen Evans, Chief Executive of Learning and Work Institute