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The government has been warned against “rushing” planned changes to disability benefits assessments, as experts say they will leave nearly half a million vulnerable people worse off.
The previous Conservative government announced in 2023 that the Work Capability Assessment (WCA) will be reformed, with the qualifying criteria being significantly overhauled. According to research from the Department of Work and Pensions (DWP), the changes will mean around 450,000 fewer people will be considered to have limited capability for work.
Labour recommitted to the plans in its election manifesto, saying the WCA is “not working” and needs to be “reformed or replaced”.
However, the government should not make these changes “in haste”, warned experts from living standards think-tank the Resolution Foundation in its ‘Cutbacks Ahead’ report.
They said the reform will mean around 450,000 people whose health prevents them from working will see a benefit cut of up to £4,900 a year.
The report authors say the issue is “similar in scale” to Labour’s controversial decision to cut back winter fuel payments for millions of pensioners from this year.
“These changes should not be made in haste,” the Resolution Foundation said. “They will degrade living standards for low-income families, with 47 per cent of families who receive these incapacity benefits coming from the bottom 30 per cent of the income distribution.”
Instead, the authors argued, the changes should be delayed or cancelled to allow “sufficient time” to ensure effective implementation.
The think-tank – thought to be influential with ministers – also takes issue with the previous government’s logic that the changes would encourage more people into work, arguing “it is in reality a straightforward cost-saving measure”.
Its research shows only around 3 per cent of those affected (around 15,400 people) would move into work, with the rest still unable to work while also nearly £5,000 worse off. It is forecast the measure will raise about £1.3bn a year for the Treasury by 2028/29.
Labour’s DWP secretary Liz Kendall said she wants to tackle long-term sickness, with a record 2.8 million people out of work for this reason.
In September, she met with a newly founded expert panel which will advise the government on how to meet its ambitious 80 per cent employment target, which is currently at 75 per cent.
Ms Kendall said: “Spiralling inactivity is the greatest employment challenge for a generation, with a near record 2.8 million people out of work due to long-term sickness.
“Addressing these challenges will take time, but we’re going to fix the foundations of the economy and tackle economic inactivity.”
The minister acknowledged an improvement in healthcare is also needed to meet Labour’s ambition, as experts warn against stigmatising sickness and leaving vulnerable people without support.
The Resolution Foundation report added the “real public policy failure here is the underlying deterioration in the nation’s health”, arguing the cost burden for supporting people with health conditions will just be placed onto other parts of local or central government if changes are not thought through.
Over the next six years, public spending on working-age disability and incapacity benefits is forecast to grow from £43 billion in 2022/23 to £63 billion in 2028/29 – an increase of almost 50 per cent. The majority of this will be paid for disability benefits such as Personal Independence Payments (PIP). This benefit is assessed through a different process to the WCA.
The DWP has been approached for comment.