My Lords, I will also cover Motion C and we will be able to take the issue in the round rather than have separate debates.
Since we last met, the other place has of course considered the amendments passed in this place to remove the changes to the ESA work-related activity component and the universal credit limited capability for work element. In both cases, there was a clear vote to reinstate the clauses. In addition, the Speaker in the other place ruled that these changes attract financial privilege.
However, a lot of specific, useful points were made by noble Lords during our debate and I would like to provide an assurance that I have listened to their concerns. I aim to address some of the unintended consequences of these measures and to announce how we propose to address some of the specific issues that noble Lords raised. I touched on some of them in a letter that I sent to the noble Lords who spoke during the debate but I will go through them in greater detail now.
The noble Lord, Lord Low, among others, spoke eloquently about the effect that these changes might have on people’s ability to engage in work-related activity, citing the extra costs that can arise from activities such as attending interviews and training courses, and accessing the internet to look for and apply for jobs. We are responding to that concern. We announced in the summer Budget a sum of £60 million per year rising to £100 million per year for practical employment support, but I can announce today that we plan to provide additional funding of £15 million in the first year, 2017-18, directed at the local jobcentre flexible support fund. This money will increase the fund by 22% and it will be set aside specifically for those with limited capability for work. The flexible support fund is used by district managers and work coaches to provide the local support that our claimants may need to return to work, and it has proved to be very effective.
We will also provide guidance to ensure that jobcentres target this additional money at claimants with limited capability for work. The fund will be used to help those affected by the changes to the ESA WRAG and the UC limited capability for work element to attend training courses on gaining practical skills, access mental health support, attend community projects or take part in motivational courses.
The noble Baroness, Lady Meacher, raised the possible impact of these changes on people with progressive conditions. Indeed, several noble Lords expressed real concern on this issue. I have had a very close look at this. I assure noble Lords that we are committed to ensuring that all claimants receiving ESA or UC due to a health condition are subject to appropriate conditionality, based on the way that their condition limits their ability to function. For some people with progressive conditions, this will be the WRAG; for others, it will be the support group.
While the department already offers reassessments to claimants who feel that their condition has deteriorated, I am aware that we can and should do more to make claimants aware of this. To this end, I am committing to improving the awareness of this option to claimants with progressive diseases, as well as the guidance for claimants and disability charities on reassessments. We will also provide training for jobcentre staff to ensure that they are aware that they may need to talk to claimants with deteriorating conditions about requesting a reassessment. This is not an easy area. It is an operational area, and I have told noble Lords who are interested in it that we will work with them and other stakeholders to make sure that we get the guidance and processes absolutely right.
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The third area is work incentives, which many noble Lords, including the noble Baroness, Lady Meacher, talked about at length. Clearly, this Government have a strong focus on the importance of work incentives. Indeed, the very structure of universal credit provides a strong incentive to find a job and will continue to do so. It is estimated that 300,000 more households will be in work once the impact of universal credit is fully realised. We intend to build on the success of universal
credit and will be releasing a White Paper this year to improve support for claimants with health conditions and disabilities.
I want to act now to improve the work incentives for those continuing to get ESA—in other words, before they move on to UC—by removing the 52-week limit that applies to permitted work for those in the ESA WRAG. ESA WRAG claimants can currently work up to 16 hours and earn up to £107.50 per week under the permitted work rules, and keep their benefit. But the existing position is that, after undertaking permitted work for 52 weeks, ESA claimants in the WRAG have to stop work altogether, reduce their earnings to £20 per week, or lose their benefit. We will amend the regulations to remove the 52-week limit and allow claimants to continue to undertake 16 hours of part-time paid work and earn up to £107.50 per week, gaining skills and experience and building their confidence while still receiving benefit over a longer period.
As many noble Lords will be aware, we have set up a task force to advise us on the use of the £60 million, rising to £100 million, of employment support funding that was announced as part of this change. This task force included disability charities and disabled people’s user-led organisations, employers, representatives of the employment services industry, and policy think tanks. The charities include Scope, Leonard Cheshire, RNIB, the National Autistic Society and the Disability Action Alliance. I would like to report that we have had excellent discussions over three meetings, and task force members have also contributed case studies and views individually.
A wide range of views has been presented and we are working with the group to distil and agree its advice on key principles and priority areas to address. This will then inform development of the employment support package in the context of a wider reform agenda that we will set out in the forthcoming work and health White Paper. Alongside the task force recommendations for the summer Budget money, we will be investing £43 million over the next three years in trialling ways to provide specialist support for people with common mental health conditions—a point I have touched on in the past.
I turn now to the amendment tabled by the noble Lord, Lord Low. This is the third time this amendment has been tabled—once in the other place and for a second time in this House. It seeks to do two things. The first is to require the Secretary of State to publish a report before the changes relating to the ESA work-related activity component and UC limited capability for work element comes into force. That report covers the impacts that the provisions would have on those affected by the changes, in particular the impacts on the person’s health, finances and ability to return to work. We debated this amendment in Committee, when it was laid by the noble Lord, Lord Patel, and a similar amendment was laid and debated in the other place.
As I have said before on such amendments, it is clear that what is proposed in the majority of the amendment will be impossible to provide through our analysis. This is because the data that are currently
available do not allow us to make a meaningful estimate. We would therefore need to undertake a large-scale trial over several years which would substantially delay implementation. A trial starting, perhaps, in April 2017 with 15,000 claimants would not yield results before 2019-20. Therefore, the earliest that we would be able to roll out the change would be 2020-21. This delay would not only impact on the savings associated with the change but would hinder the Government’s commitment to providing the right incentives and support for people with health conditions and disabilities to allow them to improve their life chances and fulfil their potential.
The impact on the savings associated with these changes, some of which we plan to recycle into employment support, is significant and would cost the Government more than £1 billion over the four years of this spending review period plus at least a further £1 million in research and analysis costs. What it is possible for the Government to provide—namely, the estimated financial effect of the reforms—has already been provided, along with other impacts, in the impact assessment that was published on 20 July last year.
Those who may be affected by this change are people who claim ESA or UC due to a health condition from April 2017 who might otherwise have been found eligible for the work-related activity component in ESA or the limited capability for work element in UC. How the changes affect individuals will depend on their circumstances, including the nature of their illness, which can vary considerably. There is a large body of evidence that shows that work is generally good for physical and mental well-being. Combine this with the growing awareness that long-term worklessness is harmful to both physical and mental health and it becomes clear why it is so important that, where health conditions permit, sick and disabled people are encouraged and supported to remain in or to re-enter work as soon as possible.
The second part of these amendments is a most unusual idea. It seeks to require that the commencement regulations be made under the affirmative resolution procedure. The changes to the ESA, WRAG and UC limited capability for work element—and, indeed, this specific amendment—have been debated extensively throughout the passage of the Bill with both Houses having ample opportunity to vote to express their view. That is why, in line with the usual process, the commencement regulations are not subject to any parliamentary process. Indeed, I have not been able to find any previous example of affirmative DWP commencement regulations. I would have thought that this House would agree that the time to take decisions of substance on these measures is now, during the passage of the Bill following extensive debate and scrutiny by both Houses, rather than postponing it to the commencement regulations.
In fact, this could appear to be a mechanism that sails perilously close to the wind in terms of trying to overturn normal parliamentary process, and I am sure that I am not alone in having concerns that this appears to be an attempt to block primary legislation through the back door. I cannot agree that requiring further debates in both Houses on the commencement
regulations is either necessary or an appropriate use of parliamentary time. Furthermore, noble Lords are fully aware that we have committed to publishing a White Paper which will provide considerable opportunity for further debate on issues relating to support for people with health conditions and disabilities. In the light of the convincing vote in the other place, the application of financial privilege and the additional support I have outlined today, I am disappointed that the noble Lord, Lord Low, has felt it necessary to table his Motion. At best, as currently drafted, it is a delaying tactic that undermines conventional parliamentary process, but in practice, and I am sure unintentionally, it acts as a wrecking amendment. I therefore urge the noble Lord to withdraw the amendments and hope that noble Lords will feel able to support the Government. I beg to move.
Motion B1 (as an amendment to Motion B)