This article was updated at 18:22 on 24 January after the DWP amended Justin Tomlinson’s parliamentary answer. The article now reflects those changes and also includes a comment from the DWP.
A Department for Work and Pensions (DWP) minister appears to have lied about one of the most controversial benefit cuts of recent years. Either that or he’s got his facts completely wrong. Because while he claimed the cut made “no savings”, that’s not what the government said when it rolled it out. And now, following the original publication of this article, the DWP has amended the minister’s comments to say that information about the savings is “not available”.
The DWP: remember this cut?
Employment and Support Allowance (ESA) is a welfare payment. The DWP says it’s designed for people who “have a disability or health condition that affects how much” they can work. It puts ESA claimants into two groups, with those it deems can “get back into” work in the Work-Related Activity Group (WRAG). Sometimes these people still live with illnesses or impairments. The DWP places people who cannot work in the Support Group.
A previous Conservative government cut the amount of money the DWP paid new WRAG claimants. As a parliament research briefing noted:
In Summer Budget 2015, it was announced that the Work-Related Activity Component paid to those in the WRAG would be abolished for new claims from April 2017. The equivalent element in Universal Credit will also be abolished. This will involve a reduction of £29.05 a week (2017-18 rates) and aligns the rate of payment with those claiming Jobseeker’s Allowance (£73.10 a week). …
The changes were introduced to ‘remove the financial incentives that could otherwise discourage claimants from taking steps back to work’.
The move was controversial. Other parties and charities slammed the government for it. The House of Lords tried to block the change. But the government forced it through anyway. The WRAG cut began in April 2017.
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As Welfare Weekly reported in 2018, Labour analysed the cut. It found that it had already hit 46,000 sick and disabled people. The analysis said that in the end, the cut would affect 500,000 people. Labour’s shadow minister for disabled people Marsha de Cordova noted at the time:
The Tories’ relentless attacks on disabled people are appalling.
This cruel cut is yet another example of the hostile environment the Government has created for disabled people.
The DWP also knew when it made the cut that the WRAG had high deaths rates. Moreover, these were rising. As The Canary previously reported, prior to the 2015 budget the death rates in the WRAG were:
- 5.4 per 1,000 claimants in 2012.
- 6.2 per 1,000 in 2013.
By 2016, this had shot up to 7.7 per 1,000 claimants. This was compared to a death rate of 1.89 for the rest of the UK population aged 16-64. On average, 10 WRAG claimants a day died between March 2014 and February 2017.
Now, a minister has shed fresh light on the policy, and something isn’t quite right.
Questions and answers
In a written question, SNP MP Marion Fellows asked:
what savings have accrued to the public purse under the £30 reduction for claimants of… [ESA WRAG] in each month since that reduction was implemented.
The DWP minister of state Justin Tomlinson said in his original response:
There are no savings from the removal of the… [WRAG rate] for new claims from April 2017.
This change enabled the Department to recycle money into providing practical support… We have invested £330m over 4 years with £100m available in 2020/21 and will support those with limited capability for work to move towards and into suitable employment.
But what Tomlinson said goes completely against the DWP’s previous claims about the cut.
When the government first announced the cut, it was in the context of austerity. A DWP impact assessment noted that the “key monetised benefits” would be:
savings to the Government [that] will reach £640m by 2020/21.
remove the financial incentives that could otherwise discourage claimants from taking steps back to work.
The DWP branded the ESA WRAG payment a ‘disincentive’. So, it slashed the rate by around £29.05 (2017/18 rates) a week for new claimants. The “savings” the DWP forecast were then revised down in 2016 to just over £1bn across four years.
In short, Tomlinson’s claim that cutting the WRAG made “no savings” is not what the DWP said originally.
So, what’s the reality?
The DWP says…
Since the publication of this article, the DWP has amended Tomlinson’s response. It now refuses to say if any savings were made due to “disproportionate cost”:
The information requested on the savings accrued from the removal of the Work Related Activity Component (WRAC) is not available. It would incur disproportionate cost to calculate any actual net savings from the removal of the WRAC.
It further amended Tomlinson’s answer regarding how the money was used:
When the WRAC was removed we made a clear commitment to instead provide practical support that will make a significant difference to the life chances of those in the Work-Related Activity Group. We have been investing an additional £330m over 4 years to support those with limited capability for work to move towards and into suitable employment.
It’s therefore unclear whether or not it stands by Tomlinson’s original comments that the money was “recycled” from WRAG.
A spokesperson for the DWP told The Canary:
We will spend £55bn this year on benefits to support disabled people and people with health conditions. This is up £10bn in real terms since 2010, and is around 2.5% of GDP, and over 6% of government spending.
The DWP previously said…
Back to the summer 2015 budget, and enter the Work and Health Programme. It’s a scheme that gives claimants extra support. As a briefing paper noted, it would cost the DWP “at least” £130m a year.
This was on top of £330m over four years, also for extra support. Tomlinson originally cited this figure. So, overall the DWP would be spending £850m over four years. Since then, the DWP has reduced the cost of the Work and Health programme to £400m over five years, or an average of £80m a year. So now, it’s additional spending has dropped from £850m to £650m across four years.
But even if we take Tomlinson’s initial claims of £330m over four years, and the £80m a year cost of the Work and Health Programme, this is still £350m short of the DWP’s forecast savings from the WRAG cut. Now with the amended statement, we don’t even know how much money has been saved, let alone where it’s gone.
Essentially, the DWP may as well have burned it.
Former chancellor George Osborne said when announcing the cut that the ESA WRAG was:
supposed to end some of the perverse incentives in the old Incapacity Benefit. Instead it has introduced new ones.
But what’s perverse is that the DWP cut the rate of the WRAG when it knew death rates were rising. ‘Perverse’ is the DWP originally claiming the cut would make over £1.365bn of savings in four years when it was politically expedient. It’s more perverse that when the tide changed, and the department was mired in constant controversy, it changed tune and said the WRAG cut was not about saving money. Now, even more perversely, the department is claiming that it is “disproportionate” to even work out how much money it saved.
It’s also perverse, as figures show, that the £80m a year Work and Health Programme has so far failed. At best, just under 9% of people the DWP put on it got a “job outcome”. This is since it started in 2017.
But most perverse is the idea that sick and disabled people are ‘financially incentivised’ by our torrid welfare state. Even before the WRAG cut, the Council of Europe branded the rate of ESA “manifestly inadequate”; finding it and other benefits breached its rules.
Misery and death. All in a day’s work.
So, we now know that the misery the WRAG cut inflicted has been for nothing, except ill-fated austerity. The DWP ploughed money into a scheme which by any measure has failed. It’s left claimants financially worse off. The DWP has barely moved any of them towards work. And it certainly hasn’t helped their health.
Its cut to the WRAG has been one of the most despicable of recent times. Yet the DWP still attempts to cover-up its nefarious actions. The aim was always saving money, despite what Tomlinson said. Now it seems the money might just have well vanished since it can’t be accounted for. And Tomlinson is misleading parliament and the public by saying the Work and Health Programme has helped “support” claimants into work. Because the figures show otherwise. In the best-case scenario, Tomlinson is clueless and misinformed. At worst, he told an outright lie.
Of course, this is all in a day’s work for the most contentious of government departments. It’s probably too much to hope it will come clean about this sordid mess.
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