Report on additional living costs of working-age disabled people published

The Government should not introduce Personal Independence Payment (PIP) assessments nationally until it has satisfied itself, in the planned initial roll-out of the new assessment in a limited geographical area, that the assessment is empathetic and accurate.

• Report: Government support towards the additional living costs of working-age disabled people
• Inquiry: Proposal to replace DLA with Personal Independence Payment
• Work and Pensions Committee

The Government's Welfare Reform Bill includes measures to introduce a new benefit in 2013: the Personal Independence Payment (PIP) will replace Disability Living Allowance (DLA) for working-age claimants, to help meet the additional living costs of disabled people. A new eligibility assessment process will also be brought in.

Comment from the Chair

Commenting on the Government's planned reforms, Committee Chair Dame Anne Begg MP, said:

"The reform was introduced on the basis of a Treasury assumption that by 2015-16 it would save 20% of the projected DLA budget by introducing a new assessment.

The Government's own estimates show that 500,000 fewer people will receive support by 2015-16 compared to the situation if DLA for working-age claimants had continued.

Announcing the change against a background of budget cuts, and the previous negative experience which many people have had with the Work Capability Assessment (WCA), has created high levels of anxiety amongst DLA recipients.

The mistakes made with the WCA for Employment and Support Allowance (ESA), as originally introduced in 2008, should not be repeated with PIP.

The assessment for PIP needs to be empathetic and avoid the mechanistic, box-ticking approach initially used in the WCA."

Areas of Concern

The report highlights a number of areas of concern (Quotes are from the Chair of the Work and Pensions Committee, Dame Anne Begg MP):

On the assessment criteria

• The Committee is concerned that the current draft criteria on which the assessment will be based are still too reliant on a "medical model" of disability. Such a model may fail to take sufficient account of the impact of social, practical and environmental factors, such as housing and access to public transport, on disabled people’s ability to participate in society and the additional costs they therefore incur.

• The Government has launched a formal consultation on the second draft of the criteria. The Committee believes that the Government should listen to the views of disabled people and their representative organisations and conduct a further trial before the criteria are adopted and the new assessment is introduced.

"The Government needs to be certain that the new assessment procedure is accurate and fair before it is introduced.

Otherwise, there is a risk that people with serious disabilities and health conditions will lose the money they rely on to meet the additional costs incurred as a result of their disability - costs such as maintaining wheelchairs, using specially adapted cars, or paying for help to ensure they can live independently."

On the impact of reform

• The Committee accepts that there are a number of arguments for reforming DLA; not least because it has become increasingly complex and is frequently misunderstood to be an out-of-work benefit.

"The Committee is concerned that the reform will be introduced before the Department for Work and Pensions (DWP) understands the full impact and before the assessment used to decide whether claimants are eligible has been fully tested.

The Government has been slow to produce figures for the number of people likely to be affected by this change.

It is still not possible to tell which current recipients of DLA are likely to have their benefit withdrawn altogether or who will be eligible for PIP but at a lower rate.

We need more information on how the introduction of PIP is likely to affect the different groups of disabled people who currently receive DLA or who would have been entitled to it under the existing system."

On the implementation process

• The Committee welcomes the Government's decision not to adopt a "big bang" approach to implementation of PIP and its announcement that the new system will be limited initially to a few thousand new claims per month in one geographical area.
• The Committee believes it is important that the period prior to national roll-out is used to learn the early lessons which emerge from this small-scale implementation and to make changes quickly where necessary.
• The Committee acknowledges that more reassessment of claimants is needed than has been the case under DLA but urges caution in moving from new claims to reassessing existing DLA claimants.

"As has been shown in the move from Incapacity Benefit to ESA, reassessment of existing claimants is even more complex than assessing new claims.

Reassessment of existing DLA claimants should only proceed once DWP is confident that the assessment process produces accurate results and is working properly for new claimants."

On the assessment process and contracts

• The Government has said that most claimants will be required to go through a face-to-face assessment. The Committee believes that evidence from medical professionals expert in a particular condition and with a detailed and longstanding knowledge of the claimant should be given due weight in the assessment process. 
• The Committee recommends that, once the initial assessments for PIP have been completed in the first geographical area, the Government should look again at the value of face-to-face assessments for PIP claims where claimants' conditions are severe and unlikely to change.
• The budget for the contract to carry out the assessments is estimated at between £300 and £500 million over seven years. It is therefore important that DWP gets the contracting process with the private suppliers right.
• The Government appears to have learned lessons from the problems arising from the monopoly supplier arrangement for the WCA. A further lesson should be learned in terms of linking payment of public funds to private companies directly to performance.
• The PIP assessment contracts should stipulate that companies will only be paid for assessment reports that are "right first time" in the majority of cases. Tighter monitoring and regulation of private companies undertaking benefit assessments on behalf of DWP is required.

Further Information

• About Parliament: Select Committees