Governments long-haul plan for cutting numbers on Incapacity Benefit

Proposals published today for the reform of Incapacity Benefit (IB) offer the prospect of a sustained and gradual reduction in the level of Incapacity Benefit claims but are unlikely to make much difference to the job prospects of most of those already receiving the benefit, according to John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD).

Dr Philpott said:

ìAlthough the government is spot on with its rights and responsibilities approach to welfare reform, the main effect of the proposals set out today by the Secretary of State for Work and Pensions will be a gradual long-term reduction in the number of people joining the IB count plus an increase in the number leaving the count after a short period of on it, rather than any major impact on the bulk of existing long-term claimants. The latter will, rightly, be required to attend work focused interviews and draw up return to work plans but this alone is likely to do much to improve the chances that employers will hire them.

ìThis may be the only realistic approach, and is anyway a major improvement on the current system, but it will nonetheless disappoint those who might be expecting an immediate improvement in the job prospects of most existing claimants.

ìWhile the CIPD welcomes the proposals published today, we will therefore in the consultation process impress upon ministers the need to do as much as possible to engage employers and encourage more to recruit potentially employable people who have already been on IB for a long-time.î

Dr Philpottís reservations are based on a CIPD survey showing considerable reluctance on the part of a substantial proportion of employers to consider hiring people from the ranks of long-term IB claimants. The survey findings, contained in a report, ìIncapacity Benefit Reform: Why it is Needed and How to Engage Employersî, show that:

1 in 3 (33%) of a representative sample of 750 employers drawn from all sectors of the economy say that they deliberately exclude people with a history of long-term sickness or incapacity when recruiting staff. Even amongst employers who do not exclude the long-term sick hardly any (only 3%) target them as part of their recruitment strategies.

For people who have been on IB for a long time, employersí concern about whether they are fit to work is compounded by the fact that many long-term IB claimants lack up to date skills and experience and may have lost the work habit.

43% of employers surveyed think long-term IB claimants would be less productive at work.

60% think long-term IB claimants would be more prone to absence.

26% think long-term IB claimants have potential but 32% also think they would be less adaptable, and 45% that they would be less reliable.

17% question the potential teamwork ability of long-term IB claimants, 16% doubt their contribution to customer service, and 19% expect they would produce a lower standard of work.

Dr Philpott continued:

ìThe good news for ministers is that many employers support the governmentís welfare to work agenda. 40 per cent of employers surveyed would consider making some kind of flexible working arrangement available to recruits from the IB count while a third would provide access to on the job training to such recruits. Over a quarter of employers surveyed would also run a coaching or mentoring scheme and would welcome the involvement of external employment advisers or mentors, including those from voluntary bodies with particular experience of people with anxiety or depressive disorders.

ìEven so, overcoming employer resistance to hiring long-term IB claimants may require greater use of direct financial incentives to employers, such as the offer of recruitment subsidies or low cost work trials for claimants. This, however, could increase the budget needed to win the so-called ëwar on worklessnessí and thus reduce any net savings to the Treasury from a cut in the IB count.î