As a consequence, it concludes that any new Government will need to focus on the underlying causes of a rising caseload, not just on restricting the eligibility and generosity of claims.
The report“, "Under Strain”, notes that real-terms spending on working-age incapacity benefits increased by a third over the past decade (2013-14 to 2022-23), and disability benefits by 89 %. As a result, total annual spending on working-age health-related benefits has increased from £28 billion to £43 billion over this period (in today's prices).
This rise is forecast to accelerate over the next six years, with total spending increasing by 48% (or £20 billion) to £63 billion between 2022-23 and 2028-29.
The Foundation outlines that the biggest spending pressure is about the number of claimants, not an increase in the generosity of benefits, with a rising caseload of working-age recipients as Britain gets older, less healthy and has a higher prevalence of disability that restricts the ability to work or requires additional support.
This growing caseload has led some to claim that it has become too easy to receive support.
But the report’s authors caution that there is no evidence to support this claim – award rates for new Personal Independence Payments (PIP) claims have been stable since its introduction in 2013, as have awards rates for those moving from the predecessor benefit Disability Living Allowance (DLA) onto PIP.
Instead, they point to a more straightforward explanation – the number of working-age people reporting that they have a disability has increased from 5.9 million in 2012-13 to 8.9 million in 2022-23.
As a result, the report finds that rushed attempts to simply restrict benefit eligibility are therefore likely to result in people with acute needs having their support and living standards cut without improving their underlying health conditions and job prospects.
In addition, it could increase poverty given that more than four-in-ten PIP claimants are currently in the poorest fifth of the income distribution.
The Foundation says that the only sustainable way to reduce overall benefit spending is to tackle the underlying cause of why so many working-age people in Britain today have underlying health conditions or impairments that restrict their ability to work or incur additional costs.
This is a task as much for the NHS, wider public services, and employers – who have a key role to play in boosting recruitment and retention of workers with a health condition – as it is for the Treasury and DWP.
The Under Strain report warns that any policy change that limits the increasing number of working-age health-related benefit claims without understanding the underlying drivers of the trend would be “risky in the extreme”.
Instead, the Resolution Foundation’s analysis suggests three lessons for the next government:
- Policy makers must advance cautiously, given the financial insecurity of so many of those who stand to be affected by any changes. Disability benefits do a good job of protecting incomes, even if they do not fully capture the extra costs of disability.
- It is highly likely that any policy response will have to extend past the benefits system, and also include action focused on the education system, the world of work, public services and beyond. The next government should seek to understand the big underlying question: why are there 2.9 million more disabled working-age adults in Britain than there was a decade ago?
- It is important to learn from the past, and seek to design a benefits system that does not create more problems than it solves. In recent years, policy makers have inadvertently been playing ‘Whack-a-Mole’ in this area: where standard rates of working-age benefits have been hit, some of that pressure has shown up as rising claims for health-related benefits which they then try to hit in response. This is not a strategy for future success.
Lindsay Judge, Research Director at the Resolution Foundation, said of the increased spending on working-age incapacity and disability benefits increased:
“This isn't down to people gaming the system, or support somehow being easier to claim. Nor is it the case that a so-called ‘benefits clampdown' would produce easy, pain-free savings.
Instead, the growing health-related benefit spend reflects the fact that Britain is becoming older, sicker and experiencing more disability, and that previous reforms have often been poorly designed.
We therefore need to focus more on enabling people to enjoy longer, healthier working lives – a goal that requires an integrated strategy involving the NHS and employers, as much as the Treasury and DWP."
Ken Butler DR UK’s Welfare Rights and Policy Adviser said:
“This fact filled Resolution Foundation report is a forceful rebuttal to all those who maintain the rise in benefit spending is a result of Disabled people being scroungers lazing around on ample benefits.
Whoever becomes the next Government needs to commit to ending the culture which paints disabled people as “scroungers” and work adverse.
Importantly, they need to acknowledge that UK benefits have been among the lowest in Europe for over forty years.
This is demonstrated by the fact that Disabled people are almost three times as likely to live in material deprivation in comparison to the rest of the population.
And that nearly 7 in 10 (69%) of those referred to food banks are Disabled people.
The main reason for this shocking number is that benefits are not sufficient to meet the extra costs associated with disability and long-term ill health.
Benefit payments must match the financial needs of Disabled people, and need to be raised to enable their basic living costs to be met.
Under resourcing of health services, social care, education, housing and transport, are excluding Disabled people from opportunity and driving us into poverty and increasing ill health.
Disability benefit reforms that caseload and/or spending goes up, narrow eligibility, turn assessments into interrogations, and impose stricter conditionality don’t work.
People with experience of disability and ill-health want to fully participate in society – including the labour market where they are able and properly supported to do so.
The next government should start by listening to Disabled people, and implement reforms based on co-production and the social model of disability.
Finally, as Disabled people and Disabled-led organisations, we have come together via the DPO Forum England to present our demands to the next UK Government, urging them to institute a radical programme of reforms, tackling systemic oppression and creating a society where everyone is valued and treated equally.
Please share your support for the Disabled People’s Manifesto and the solutions it offers across Representation and Voice, Rights, Independence, and Inclusion.
Find out more at the Disabled People's Manifesto website.”