Poverty and disability in the UK: the role of the welfare system

 

derelict housing

By Diane Lightfoot, Chief Executive Officer, Business Disability Forum

As the UN Rapporteur on extreme poverty and human rights makes further visits as part of his fact-finding trip to the UK this week, we continue our blog series looking at poverty and how it affects disabled people. Today, we will be looking at the impact of the welfare system.

Business Disability Forum is one of the organisations that was asked to submit evidence to the UN Rapporteur ahead of his visit.

This is what we said about the welfare state and how it affects the life chances of disabled people and in turn the businesses they work for and do business with.

 

The need for an effective welfare system

Over a million disabled people, both in work and out of work, rely on income from the welfare system to help them meet basic living costs. There are several reasons for this.

As we looked at in our first blog in this series, at 51 per cent the employment rate for disabled people in the UK is far below the national average, meaning that disabled people are far more likely to experience poverty and need financial assistance than non-disabled people. In addition, those who are in paid employment may need to work fewer hours due to the nature of their disability or long-term condition, and therefore may need to top-up their income.

Alongside this, there are the additional costs of living with a disability. Research carried out by the Extra Costs Commission in 2015 found that disabled people spend on average £550 per month on disability related costs (such as accessible transport options; specialist or assistive equipment; and having to pay premiums on some types of insurance).[1] A updated report finds that the monthly spend directly related to a disability now stands at an average of £570 per month and, for some, this can reach up to £1,000 per month.[2]

Therefore, the welfare system has a vital role to play in providing financially for disabled people and in reducing poverty.

 

Changes to the system

Although the welfare system is designed to do just that, evidence suggests that the recent changes to the benefits process, particularly over the last five years, have significantly and adversely affected disabled people.

Around 1.6 million disabled people claim the Personal Independence Payment (PIP). PIP replaces the Disability Living Allowance (DLA) and is intended to cover the additional daily living and mobility costs experienced by people with long-term health conditions and disabilities.  A recent inquiry by the Work and Pensions Committee reported that many disabled people found the process of claiming Personal Independence Payments (PIP) to be inaccessible. The inquiry evidenced a huge amount of distrust by claimants and detailed how 290,000 disabled people were refused PIP awards on first application but were later granted them on appeal.[3] In addition, a reported 59 per cent of PIP applicants needed assistance with completing the application form.

The roll-out of the new six-in-one benefit, Universal Credit (UC), has also received much criticism in the news recently. Evidence from both parliamentary select committees and think tanks has suggested that without additional investment and structural change, the new benefit could have a detrimental effect on the incomes of claimants, both now and in the future. Issues include claimants falling into debt due to receiving reduced or delayed payments, through to increased use of foodbanks and claimants falling out of the welfare system as a result of an inaccessible online application processes

Additional funding for UC was announced in the Chancellor’s recent budget statement, but even taking this into account, it is estimated that nearly a million disabled people could be worse off on Universal Credit and by more than £200 a month.[4]

Prior and in addition to the introduction of UC, many disabled people have also experienced a reduction in their Housing Benefit (one of the six benefits making up UC), since 2013, due to the introduction of what has become known as the ‘bedroom tax’. The legislation provides less financial support for housing for people who live in accommodation with ‘unnecessary’ additional bedrooms and has meant that disabled people have seen a decrease of 14-25 per cent in the amount of housing benefit they receive.

 

The impact

 The information that we have presented here suggests that changes intended to improve the welfare system, in recent years, have had done little to reduce the risk of poverty for disabled people, and, in fact, have put them at greater risk.

Since we made our submission, new evidence has come to light from the Work and Pensions Select Committee[5] on the negative effect of benefits sanctions on disabled people looking to either enter into work or to increase their working hours, and this really gets the nub of the problem.

The welfare system should be there to help improve the life chances of disabled people, yet there is far too much evidence to suggest that for many it is simply making life harder.

The knock-on effect for business and the wider economy of an ineffective welfare system is twofold. Firstly, it means that at time when many sectors are experiencing a skills shortage, attracting and recruiting talented disabled candidates becomes even more difficult. Secondly, it reduces the spending power of disabled people as potential customers.

Having a welfare system that works and supports those most in need, is of benefit to everyone. We hope that as the UN Rapporteur prepares to issue his interim report at the end of this week, he will address this important issue.

 

[1] Extra Costs Commission (2015), Driving Down the Extra Costs Disabled People Face.

[2] Touchet, A. and Patel, M. (2018) The Disability Price Tag: Policy Report.

[3] Department for Work and Pensions (2018) Personal Independence Payment Claimant Research – Final Report: Findings from three waves of qualitative and quantitative research exploring claimants’ experiences of the PIP claim process.

[4] Disability Benefits Consortium, Statement on Universal Credit Managed Migration Rules, https://disabilitybenefitsconsortium.wordpress.com/2018/11/05/dbc-statement-on-universal-credit-managed-migration-regulations/ [Accessed 5 November 2018]

[5] Work and Pensions Select Committee (2018) Benefit Sanctions

Why small businesses should forget the myth that hiring disabled people is ‘too hard’

This Saturday 6 December is Small Business Saturday in the UK. The aim of the day is to encourage consumers to support small businesses in their communities, and highlight the success of those that are getting things right for their customers.

Operating a small business can be tough – running on tight margins, competing with large businesses and dealing with high staff turnover are just a few of the many concerns on the minds of small business owners.

Image of a small business owner smiling on showroom floor

Recruiting for roles in a small business can be particularly hard when juggling these multiple priorities with day-to-day operations; it’s often tempting to settle for the person recommended by a friend or your neighbour’s relative who’s looking for work, just to temporarily fill the void.

If your business takes a similar approach to recruitment, you could be missing an opportunity to tap into the huge market of disabled talent here in the UK. There are 5.2 disabled people of working age in the UK, 53.7% of whom are not currently employed[i]. That’s a sizeable talent pool of 2.8 million people that might have the ideal attitude, skills and experience for your role.

In the past, the financial implications of making a hiring decision has prompted many small business operators to hesitate offering jobs to disabled people, regardless of whether or not they were the best person for the job[ii]. With 42% of disabled people looking for work naming employer attitudes as a barrier to successfully gaining employment[iii], initiatives such as the Department of Work and Pension’s (DWP) ‘Disability Confident’ campaign are looking to change assumptions about hiring disabled people.

Launched by the Prime Minister in July 2013, Disability Confident aims to dispel the myths about the complexities of employing disabled people, and increase awareness of the support available to employers of disabled people.

Part of this campaign involves bringing employers, including small business owners, together to discuss the support on offer from government and organisations like Business Disability Forum to improve employment outcomes for disabled people.

Image of an employee in a wheelchair holding a pot of flowers in a garden centre

The most significant support for small business employers comes in the form of ‘Access to Work’ (AtW): a labour-market intervention that provides grants to employers which can be used to pay for practical support for staff that have a disability, health or mental health condition. The types of support covered by AtW grants include the purchase of special equipment, a support worker to help disabled staff members in the workplace, and fares to work for staff who cannot use public transport.

Businesses with up to 50 employees do not have to contribute towards the cost of Access to Work grants, making it a viable and attractive option for small businesses thinking of employing a disabled person.

Recent changes to AtW have made the scheme even more appealing to small business; the ‘standard list’ of items AtW would not fund, which included vital equipment such as software and chairs, was withdrawn in 2013.

Once your business has made the decision to hire a disabled person, you may find that guidance and support is still needed to enable that person to be successful in their role, whether it be in the form of disability training for other staff or guidance for the new employee’s line manager.

Business Disability Forum offers a wide range of publications, tools and training to employers of disabled people. Our line manager guides can provide staff in your small business with practical advice on the best way to work with, manage and support disabled staff members.

In early 2015, we will also be launching a new suite of e-learning products suitable for small and medium sized businesses. E-learning is an ideal solution for SMEs, as it can be more cost and time effective than sending staff to face-to-face training. It’s a resource that can be used to train new staff, as refresher training for existing staff, or even to train your suppliers.

To enquire about our products and services for small business, contact us via email to enquiries@businessdisabilityforum.co.uk or call 020 7089 2452.

[i] Department of Work and Pensions, ‘Disability facts and figures’, 16 January 2014: https://www.gov.uk/government/publications/disability-facts-and-figures/disability-facts-and-figures#employment

[ii] BBC News, ‘Moves to help more disabled people into the workplace’, 18 July 2013: http://www.bbc.co.uk/news/business-23355252

[iii] Department of Work and Pensions, ‘National drive to boost disability employment: first ever Disability Confident roadshow tours Britain’, 21 November 2013: https://www.gov.uk/government/news/national-drive-to-boost-disability-employment-first-ever-disability-confident-roadshow-tours-britain