Rishi Sunak’s Vision for Welfare Reform

In the next parliamentary session, a conservative government plans to overhaul welfare systems significantly. Prime Minister Rishi Sunak provided detailed insights into the five major conservative reforms during his recent speech at the CSJ Centre on April 19, 2024.

This blog examines the key points Rishi highlighted in his speech and their impact on the working lives of individuals dependent on benefits.

5 Conservative Reforms for a New Welfare Settlement

1.  Improved Assessment of Work Capability

Rishi states that the gateway to ill-health benefits is writing too many off as unfit to work,  leaving them on the “wrong type of support”. Statistics from the House of Commons Library reveal a concerning trend: in 2011, 20% of those subjected to a Work Capability Assessment were deemed unfit to work, a figure that has since surged by a staggering 55%.

Key Points of This Reform:

1. Individuals with severe debilitating conditions should not be expected to work.
2. However, those with mild to moderate disabilities should be incentivised to seek employment with the appropriate support from their employers.
3. Employers must make reasonable accommodations, such as remote work options, for employees with minor mobility issues.

Rishi states that the gateway to ill-health benefits is writing too many off as unfit to work,  leaving them on the “wrong type of support”. Statistics from the House of Commons Library reveal a concerning trend: in 2011, 20% of those subjected to a Work Capability Assessment were deemed unfit to work, a figure that has since surged by a staggering 55%.

2. Preventing the Transition from Employment to Welfare

The primary objective behind replacing the conventional 'Sick note' with the 'Fit note' is to reduce the number of individuals being automatically classified as unfit for work. The Fit note offers the option to suggest that an individual may indeed be fit for employment, providing advice on actions that individuals or employers can take to facilitate their continued participation in the workforce. Astonishingly, 11 million Fit notes were issued last year alone, with only 6% indicating a potential ability to work, while the remaining 94% were simply deemed unfit for work.

Key Points of This Reform:

1. Implementation of a new system to facilitate access to specialised work and health support for individuals transitioning back into the workforce.
2. Replacement of Sick notes with Fit-to-Work notes.
3. Restrictions will be placed on GPs from issuing sick notes.
4. Work Capability Assessment (WPA) to be conducted by specialised work and health professionals with sufficient time to provide an impartial evaluation of an individual's work capacity.

Reasons for Shifting from GPs to Specialists:

Rishi emphasises that GPs are already overwhelmed with their existing workload, and this transition could alleviate pressure on the NHS. He states, “Part of the problem is it may not be reasonable to ask GPs who are perfectly very busy at the moment assess whether their own patients are fit for work. It too often puts them in an impossible situation where they know that refusal to sign somebody off will harm that precious relationship with their patient.”

3. Heightened Standards for Benefit Entitlement

Approximately half a million individuals have remained unemployed for six months, while a quarter of a million experienced unemployment for a year. These individuals are said to not have any medical impediments preventing them from seeking employment and have likely benefited from "intensive support and training programs." With over a million job vacancies available in the current job market, Rishi contends that it is unjust for taxpayers to subsidise individuals who refuse to engage in work.

Key Points of This Reform:

1. Under the current regulations, individuals on universal credit can claim full benefits without seeking additional employment if they work only nine hours per week.
2. The new regulation stipulates that individuals working less than half of a full-time week must actively seek additional employment in exchange for claiming benefits.
3. This reform aims to expedite the transition of individuals from legacy benefits to universal credit, thereby increasing their access to employment opportunities.
4. Individuals failing to comply with the conditions set by their work coach, such as rejecting available job offers, will have their claims terminated and lose their benefits entirely after 12 months.

Rishi underscores the significance of this reform by highlighting that spending on Personal Independence Payments (PIP) alone is projected to surge by 50% over the next four years. He asserts that this is unfair to hardworking taxpayers who support individuals taking advantage of the current welfare system, emphasising, "Unemployment support should serve as a safety net, never a lifestyle choice."

4. Aligning Support with Individuals' Specific Needs

Concerns regarding the misuse of Personal Independence Payments (PIP) have been brought to the forefront, particularly with funds earmarked for aids or assistance for disabled individuals, such as stairlifts, often available at low or no cost from the NHS or local authorities. These expenses are typically one-time payments, whereas PIP entails ongoing financial support.

Claims based on mental health conditions have also prompted the need for reform. Since 2019, there has been a twofold increase in individuals claiming PIP citing anxiety or depression as their primary condition. Rishi contends that it remains unclear whether these individuals face the same level of living expenses as those with physical ailments.

Key Points of This Reform:

1. Eligibility for PIP claims will be contingent upon the type and severity of mental health conditions, with a closer alignment between the WPA and the individual's actual condition, requiring greater medical evidence.
2. Transitioning from cash transfers under PIP to improved access to treatment, such as counseling or respite care.
3. Individuals with less severe mental health conditions will be encouraged to participate in the workforce.

Rishi argues that the current system is undermined by the subjective and unverifiable nature of claims regarding an individual's capabilities. He asserts that the proposed welfare system will streamline access to benefits for those with the most pressing needs, with fewer bureaucratic hurdles.

5. Benefit Frauds and Future Measures

In a recent development, the Department for Work and Pensions (DWP) successfully obtained a guilty verdict against a Bulgarian gang responsible for approximately 6,000 fraudulent claims. Moreover, DWP has intensified its efforts to clamp down on thousands of other individuals wrongly claiming Universal Credit.

Key Points of This Reform:

1. A forthcoming fraud bill is slated for introduction in the next parliamentary session, aiming to synchronise DWP practices with those of Her Majesty's Revenue and Customs (HMRC).
2. Once implemented, benefit fraud will be treated on par with tax fraud. This alignment will empower authorities to undertake seizures, make arrests, and impose penalties.

Potential Drawbacks

While there are undoubtedly aspects of the proposed system change that could yield positive impacts on the broader economy, it's crucial to also consider potential negative outcomes:

1. Vulnerability of At-Risk Individuals: The expectation for individuals with disabilities or mental health conditions to engage in work without adequate support could jeopardise their well-being.
2. Risk of Exploitation: There's a looming risk that employers may exploit disabled individuals, leading to instances of discrimination and exploitation in the workplace.
3. Access Barriers to Benefits: The implementation of stricter assessments may inadvertently create barriers to accessing benefits for those in genuine need, potentially exacerbating financial hardships.
4. Unforeseen Impacts on the Job Market: The imposition of stricter conditions for benefits might not necessarily align with the realities of the job market, potentially resulting in increased unemployment rates and mismatched skill sets.