The latest figures for those claiming incapacity benefits is 2.7 million. This includes those in receipt of Incapacity Benefit itself (about 1.4m), ‘NI credits only’ for incapacity (1.0m) and Severe Disablement Allowance (0.3m). None of these people are in employment, but are not recorded as unemployed.
The figures also indicate that high rates of IB claimants are regional and local problems. The claimant rate in the North East, North West, Scotland and Wales is twice that of the South. In North East England one in nine working age adults are on incapacity benefits compared with less than one in twenty in the South East. In Easington, Co. Durham, more than 20% of the working age population are IB claimants. Nearly half of all claimants are over 50.
The government has stated its intention to reduce the number of incapacity claimants by one million within ten years. The report by Fothergill and Wilson asks the question 'how achievable is the Government’s target?' (A MILLION OFF INCAPACITY BENEFIT: How achievable is the Government’s target? Steve Fothergill and Ian Wilson, Centre for Regional Economic and Social Research, Sheffield Hallam University). Their assessment, was carried out by projecting forward current trends to establish a ‘baseline’, and then by introducing assumptions about new trends due to the government’s proposed reforms.
The baseline projections indicated no reduction in IB claimants. IB numbers will not naturally reduce as older claimants reach pension age. Many of this older group were made redundant from coal, steel and engineering jobs during the 1980s and 1990s , and have claimed IB, perhaps, since redundancy. However, the assumption that they will disappear from IB figures once in receipt of pension overlooks the tendency for the IB stock to be renewed as younger claimants replace their older counterparts.
Therefore a natural reduction of claimants will not occur. Whether the government meets its target, or not, depends upon its policies and their implementation.
There are sufficient 'hidden unemployed' within IB claimants to achieve the one million reduction target, but because of the regional nature of high claimant patterns, the majority of the reduction would have to come from the North, Scotland and Wales. Employment growth in these regions would need to accelerate enormously.
The Pathways to Work initiative has the potential to reduce the IB total by about half a million in ten years. To reach the 'one million off' target necessitates the proposed reforms doubling the effectiveness of the Pathways to Work.
The report authors conclude that the government's target is a 'tall order.' Doubling the current impact of Pathways to Work is tough enough, but the regional nature of the perceived problem makes the target achievement extremely difficult. Unless there is sustained accelerated employment growth in the North, Scotland and Wales, any reduction in IB figures will only result in an increase in unemployment.
It is very questionable whether government policies can achieve the required acceleration in regional job growth to reach their IB reduction target.