A New Vision for Welfare-to-Work


While public debate is focused on cuts to tax credits, and whether their staged introduction and move to National Living Wage will soften the blow for the working poor, a more interesting and nuanced reform is underway.

In August, Ian Duncan Smith ‎gave a speech on welfare reform – focusing on disability benefits and fitness for work. While bearing many of the usual hallmarks of his welfare theory about dependency and its effects on family life, it was also noticeable in its new emphasis on focusing on what people can do when it comes to work, not what they can’t; a shift from a binary fit/unfit approach to disability benefits, to one that more readily allows some work, based on an individual’s capacity.

This has been, of course, one of the alleged benefits of universal credit – but rather than waiting for who knows how long for that ship to come in, it seems IDS has turned his attention to a reform of ESA based on pro-activity, working with employers and a “can-do” approach to fitness to work.

All this isn’t new, of course. Policy wonks familiar with social care know this as the “asset-based” rather than “deficit-based” approach to care and support. It means focusing on what a disabled person can do, what they want to achieve, and then identifying ways of overcoming the barriers to this. It is recognised as the best approach to providing a form of support that develops independence, rather than encouraging being “done to” and passivity, and usually goes hand in hand with a personal budget to enable the disabled person to buy in support to help them achieve the outcomes they have identified.

Applying this proactive approach to benefits assessment, looking at what work a disabled person can do, can only be welcomed – a thorough rethink of ESA is a long time coming, and something Demos is also exploring as part of its Incapacity work.

But what if IDS went further? What if he took the asset-based, social care approach to ESA reform beyond the ‘fitness to work’ assessment phase, to its natural conclusion?

In social care, many disabled and older people help develop their own care plan, setting out the outcomes they hope to achieve (this might be anything from walking in the garden more often to – yes – getting a job) and how they can achieve them. Their local authority then assesses how much money, in the form of a personal budget, it will take to fulfil the care plan and the individual in question can spend that budget accordingly.

The potential parallels between this process and the welfare-to-work regime are obvious. Both involve a support plan and an allocation of cash. But when it comes to welfare-to-work, the two remain stubbornly disjointed. Receiving ESA and developing a work plan are subject to separate assessments, carried out at different times and, most importantly, are not mutually reinforcing – a disabled person who is unemployed will not necessarily spend their ESA on fulfilling their work plan, but rather to support themselves during their unemployment.

But what if, upon a single assessment, an individual was helped to develop a “welfare-to-work plan”, and given a personal budget – composing of money to live (the current ESA) and money to implement the work plan? Disabled people could take this to Work Programme and other relevant support providers to help them get back to the workplace, bringing new choice and competition into a system made sluggish by payment by results.

It’s an idea that has been raised before, but no one yet has joined the dots between the assessment and the allocation of this cash. It would require: a combined assessment of incapacity and employability, a ‘real world’ test that remains a point of contention for the DWP, as well as the addition of support planning tacked on after the eligibility phase.

These have always been separate – first with the work-focused, health-related assessment (WFHRA, scrapped in 2010), and now undertaken (patchily and much later on) by Work Programme providers. Recent research published by Demos on international approaches to incapacity assessments has found, in fact, that no other country combine these “eligibility” and “diagnostic” phases. But then again, none use personal budgets. A personal budget could achieve exactly what IDS wants – moving from a binary question of eligibility for and access to a fixed amount of cash, to a sliding scale based directly to the amount of support needed. It could marry the “how much” with the “what” – so that an assessment of incapacity and employability coexists, creating both an employment plan and a corresponding budget to carry it out.

Some might worry that an assessor would want to keep spending on “personal welfare-to-work budgets” as low as possible, by downplaying people’s barriers (or finding none, and with it, removing eligibility for ESA). Of course this is true of the current regime, where more and more disabled people are found ineligible for ESA. But perhaps the main difference is not that a personal budget approach is more generous, but rather more efficient – by combining and rationalising two disparate stages of assessment. It also empowers disabled people in the process of assessing their employability and enabling them to take charge of their journey back to the workplace – an asset-based approach if ever there was one and a far cry from the opaque and alienating WCA currently in play.