For the taxpayer’s sake, halt the introduction of disability benefit PIP

In response to every criticism of the Government’s austerity drive, the Coalition insists there is no alternative to the cuts and yesterday morning was no different. Speaking on the Today programme, Work and pensions minister Chris Grayling again argued that it was in the taxpayer’s interest for the Government to press ahead with disability welfare cuts despite last night’s dramatic defeat in the House of Lords of three proposed welfare reform changes. Yet as the debate shifts to other aspects of the welfare bill, it can be argued that key elements of the proposed reforms in fact short change the taxpayer.

The Government is intent on scrapping DLA and replacing it with Personal Independence Payments (PIP), despite the fact that only 7% of organisations that took part in a recent DLA consultation were fully in support of this change. The reasons given by the Government for abandoning DLA struggle to stand up under scrutiny, as this week’s excellent Responsible Reforms report by disabled campaigners highlight, but what is clear is that the Government has estimated it will cost £675 million to scrap DLA and introduce PIP.

In addition, despite fierce opposition from disabled people and, at 0.5%, DLA having the lowest fraud rate of all Government benefits, the Government is still intent on introducing a medical test for all potential recipients of PIP. It is suggested it would operate along the lines of the Working Capability Assessment (WCA) administered by private company Atos healthcare for those currently applying for Employment Support Allowance. Frankly, this assessment isn’t currently fit for purpose. 40% of decisions that people are ‘fit to work’ are overturned at the appeal stage, and these original decisions are very heavily based on the findings of the WCA. Atos has not yet been given any financial penalty for any inaccurate report it has produced despite the fact that the hefty appeals process for ESA has cost the taxpayer a staggering £80 million to date. On top of this, the Government is already paying Atos £801 million over a ten year period and one can only presume the contract will increase in size were Atos to be asked to also undertake the medical assessments for PIP eligibility.

In its ‘Budget 2010 policy costings’ document, the Government highlighted a desire to cut DLA payments by 20%. Currently annual DLA payments amount to £12.6 billion, so a 20 per cent saving on this figure would come in at £2.52 billion annually. The up-front PIP implementation costs plus a medical assessment contract similar in size to Atos and any subsequent appeals expenses would eat up half of these savings.

In an age where we are continually told that every penny counts, the Government must justify these costs, including whether it is in the taxpayers interest that 100% of DLA recipients will be forced to attend a medical, even those that have an incurable, end-stage illness. Wednesday's successful House of Lord’s amendment to the welfare bill to exclude cancer patients from being subject to the one year ESA time limit, and therefore implying a medical test for such patients would be redundant, suggest there isn’t the public appetite to impose stressful health tests on the seriously ill who are trying to claim benefits in their hour of need.

The Government also has an obligation to the taxpayer to ensure its money is sensibly spent. The medical tests for PIP eligibility are set to begin in 2013, despite the fact that the latest Harrington report, which examined the practical implementation of the WCA medical test, states it will take at least three years to see if its recommendations have improved the accuracy of the medical test in identifying real need.  Until the Government manages to get WCA appeal rates under control, there is little point adding another hefty bill to the taxpayer’s purse to extend the number of ill people required to undergo similar assessments. Indeed the Government should be obliged to go further and ensure the taxpayer is getting value for money from existing medical assessment contracts by forcing financial penalties on those companies making repeated mistakes for which the taxpayer is currently picking up the bill to rectify.

Don’t get me wrong, I’m not in favour of an arbitrary 20% cut in DLA and I’ve written before voicing my concerns that people who need genuine Government help will be deemed ineligible in order to meet a pre-decided budget cut. But it seems to me that the Government is simply scrapping DLA only to replace it with a similar benefit at great cost to the taxpayer to avoid the PR fall out of being seen to take money away from the long-term sick. In an age of austerity there cannot surely be any spare cash to help the Government save face.

If the Coalition wishes to reform or cut DLA then it should have the courage to makes its case in a fair and democratic manner and make changes within the current benefit. It should not hide its agenda behind a name change or ‘independent’ medical assessments. The introduction of PIP should be recognised as a waste of money which cannot demonstrate any clear benefit to the taxpayer. It should be halted now, before it too becomes a disastrous, administrative nightmare like ESA is now proving to be.