Welfare Reform Bill

My Lords, I applaud the objective of the Bill to reduce by 1 million the number of people who are dependent on disability benefits. I should have thought that for people who, like me, have had a longstanding concern about unemployment, this would be a day of rejoicing, but I find myself deeply worried by what I regard as the unintended consequences of the Bill. To explain why, I shall concentrate on the50 per cent or so of people who have a mental health problem as either their primary or secondary diagnosis. My noble friend Lord Low spoke eloquently about the impact of the Bill on physically disabled people. I should declare an interest. I chair the East London and City Mental Health Trust and a clinical ethics committee for the Central and North West London Mental Health Trust. The aim of the Bill is to enable people to return to employment, but for those with fluctuating disorders, including most mental health disorders, the fear of taking a job is considerable. First, they face stigma when they return to work. They are very likely to face suspicion on the part of their manager and peers. They generally lack confidence and are likely to assume that they will probably fail. They will often be able to work only part-time, and on fairly low incomes. On top of that, they fear that if the job goes wrong, it will take months to restore their benefits. That fear is based on their personal experience; destitution is never far away from these people. If the Bill could assist just one of those very real problems, it should do so. Reform of the linking rules would be an important start. These rules are designed to ensure a rapid restoration of benefits to a person previously on disability benefit who takes and then loses a job. These linking rules simply do not work. First, the restoration of benefits is not automatic. The applicant still has to complete an application form and visit the jobcentre for an interview. If a person with a mental health problem has just lost a job, they are likely to be curled up in bed thinking that life simply is not worth living. The last thing on their mind will be to make a claim for benefit. Similarly, the likelihood of the person turning up at the right place at the right time for an interview is small and in some cases non-existent. I recently asked the manager of a jobcentre to talk me through exactly what would happen to a mentally ill person who takes and then loses a job. Her response was devastating. She explained the system as it was supposed to work and then she said, ““Quite honestly, what usually happens is that the police pick them up and they are taken back to hospital. We can’t really help. We don’t really understand mental problems. There’s no doubt that mentally ill people really suffer in this system””. Those were the comments of a person responsible for operating these rules. The linking rules will never work with this group unless they are truly automatic. Ministers tell me that the reason for the lack of automaticity is the need to avoid abuse. I would ask the Minister to consider whether it might be less costly to the Exchequer to restore benefit immediately and then to undertake checks when this approach would prevent extremely costly hospital admissions. We need only go back to the jobcentre manager for evidence of that. Vitally important, too, is the need to extend the linking rules to include automatic restoration of housing benefit at the previous higher level for a person not in work. As noble Lords know, if you go into work, your housing benefit drops; if you leave work, in theory, your housing benefit rises. I know that the department has been considering that position and I should be grateful if the Minister could give the House an assurance that plans are in place to render the linking rules, including housing benefit, truly automatic for the most vulnerable group in the context of the new Bill. I have thought long and hard about how those with fluctuating disorders, including those with moderate or severe mental health problems, can be helped by the Welfare Reform Bill. There is a positive and constructive way forward, but only on the basis that this entire group would be placed in the support group. I do not like to disagree with the noble Baroness, Lady Hollis, but sanctions will not work for people with moderate and severe mental health problems. The NHS and DWP need to work closely together to deliver the right package of help and support to return as many as possible of these people to employment for as much time as they can manage. I therefore greatly support the Government’s objectives; my only concern is about the means to attain them. The package, which appears to be readily available, requires four elements. The first is evidence-based psychological therapy at a cost of just £750 per person. This work is currently being piloted in two NHS trusts. The second is evidence-based individual placement and support, a form of supported open employment widely tested in the US and found to be successful for people with mental health problems. London mental health trusts, and no doubt many others, are introducing this approach, and in two cases they have already done so. The third is work with employers to reduce the stigma of mental health issues and to ensure a more supportive environment in the workplace with the support of NHS staff. I understand that the DWP is doing important work in that area. Nothing I am saying is new, and if you put it all together, you really begin to get somewhere. The fourth crucial item is the reform of, and rendering automatic, the linking rules to take away the fear that these people face when they take the first steps into jobs. I turn to other concerns about the Bill. The policy presented in the Bill was tested in the Pathways to Work pilots, which were well resourced and included regular back-to-work interviews and opportunities to benefit from a variety of support services and a back-to-work bonus of £40 a week. I hope that that bonus is in the regulations. The pilots were rightly heralded as a success, but hidden behind the success was the fact that people with mental health problems were not assisted into work by the Pathways to Work pilots. The pilots worked for others. The system to be introduced by this Welfare Reform Bill will be a pale reflection of the pathways pilots’ design. For a start, the DWP faces a 5 per cent spending cut in 2007-08. There will be fewer staff and, no doubt, staff less well trained to process the employment and support allowance system. All this bodes ill for vulnerable claimants. What, then, are the important differences between the pathways pilots and the Bill itself? First, the Government plan to contract out all the work associated with the new employment and support allowance. The justification for contracting out the service is based on a flawed evaluation of an entirely different project involving the placement of unemployed people. In that project, the contracted-out service was altogether stronger in design than the in-house model with which it was compared, thus proving nothing. The successful Pathways to Work pilots were, by contrast, undertaken in-house by Jobcentre Plus. The fact is that we have no evidence that contracting out the employment and support allowance will help clients back to work. There are reasons to fear the opposite. Secondly, contractors will be outcome-focused. They will, I understand, be paid only if they place a person in a job. That did not apply to Pathways to Work. We can assume that the financial incentive of payment by results, or payment for every successful job placement, will either result in undue pressure being placed on people with mental health problems, whose symptoms are likely to increase under stress, or this group will simply be left out in the cold. Thirdly, the £800 per job placement is based on the actual cost of placing someone in work in the pathways pilots. But we know that mentally ill people were not helped into work. The question then is: what would it cost to place people with mental health problems in work? It would certainly cost a good deal more than £800 per person. For example, we know from the Sainsbury Centre that the average cost of condition management in the pathways pilots was £1,200. The figures stack up only because 12 per cent of people on those pilots received condition management. Apart from the dilution of the pathways model, there are many other concerns. One of our problems in debating the Bill is that most of the detail will be in the regulations. The personal capability assessment that others have mentioned will determine whether a person is deemed to have a ““limited capability for work”” and is entitled to the ESA, or whether they fall into the support category. The PCA is thus of huge importance to claimants; it determines their livelihood. The PCA has until now failed to assess mental disorders effectively, as others have mentioned. A lot of work has been done to improve the tool used for mental health assessments, and I applaud the Government for that, but the accuracy of the PCA will depend on more than the tool itself. It is essential that the person undertaking the mental health assessment has appropriate training as well as regular contact with the person being assessed so that he really understands how the person is over time. At present, the person’s GP will be invited to complete a form before the assessment begins. Many mentally ill people, particularly those with severe and enduring problems, rarely see their GPs. A member of the community mental health team would be in a far better position to help. In view of these failures, I trust that the Government will test the new PCA all the way to appeal in order to ensure that it will be successful. A major issue is the conditionality introduced with the ESA group. It sounds very reasonable, until we get down to individual cases and what it will mean in practice. I met someone recently who suffers from clinical depression and anxiety. She is literally terrified by this system. Her symptoms are made worse by leaflets coming through the door, and it is difficult to imagine how she is going to cope with the process of being invited to assessment after assessment, interview after interview, and so on. She feels that her whole life will be under threat. I fully support the Government’s commitment to increase the number of people in employment by 1 million over 10 years, but I am profoundly concerned that the Bill will cause increases in NHS expenditure and will not achieve the Government’s objectives unless the concerns that we have all expressed are addressed.