Who are ESA claimants and what are their needs?

1. Who are ESA claimants and what are their needs? Paul Bivand Associate Director of Analysis & Statistics Inclusion

2. Setting the stage • First part of presentation a 2005 presentation to EU conference organised by British Presidency of EU – indicating the priority given • Analysis of change since then • Job performance and what impacts

3. What does the media think?

4. How did we get to 2.7 million? Musculoskeletal etc. Other, incl. injuries, drugs Working Age IB/SDA: May 1995 to May 2005 Other physical Mental etc. 3,000 2,850 2,800 2,500 2,750 2,700 2,000 2,650 2,600 1,500 Thousands Claimants (Thousands) 2,550 1,000 2,500 2,450 500 2,400 2,350 0 Feb 96 Feb 97 Feb 98 Feb 99 Feb 00 Feb 01 Feb 02 Feb 03 Feb 04 Feb 05 Aug 95 Aug 96 Aug 97 Aug 98 Aug 99 Aug 00 Aug 01 Aug 02 Aug 03 Aug 04

5. But many want to work • One-third of inactive long term sick and disabled want to work – but had not been looking • One-third of incapacity benefits claimants 800,000 Long-term sick and disabled who want to work, not looking 40% 35% 30% Percentage of all inactive long-term sick 25% 20% 15% 10% 5% 0% Jan 95 Jan 96 Jan 97 Jan 98 Jan 99 Jan 00 Jan 01 Jan 02 Jan 03 Jan 04

6. Significant regional differences

7. But recent claims show changing pattern • Some regions have large numbers, yet low percentage of the population – and everywhere mental and other, including injuries, drugs great majority of claims New incapacity benefits claims by condition and region North West Scotland London Yorkshire and The Humber West Midlands South East Wales South West East Midlands North East Eastern 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Number Mental etc Musculoskeletal etc. Other physical Other, incl. injuries, drugs

8. Solutions • Many experiments since 1997 – finding out what works – now moving to implementation • Work-focused interviews • New Deal for Disabled People • Pathways to Work • Others, JRRP, WorkStep, Access to Work • Supported by enhanced in-work benefits (Tax Credits)

9. Work-focused interviews • Oct 2001 in integrated Jobcentre Plus areas – all GB by end 2006 • Start of claim • Every three years thereafter • And if assessed as ‘incapable of work’ at medical assessment • What happens – • Job goals • Skills • Strengths and abilities • Rehabilitation and barriers

10. New Deal for Disabled People • Voluntary and private sector job brokers • Customers can choose job broker • Jobcentre Plus informs customers, does not refer them

11. Pathways to Work I.B. six month off-flow rate 50% • Seven pilots now - extending to areas with 1/3 of all claimants by Oct 2006 • Programme of work-focused interviews • Condition Management Programmes • New Deal for Disables People • Other choices National Phase 1 45% Phase 2 40% Off-flow rate 35% 30% Start of Start of 25% phase 1 phase 2 pilots pilots 20% Jul-01 Jul-02 Jul-03 Jul-04 Apr-01 Apr-02 Apr-03 Apr-04 Oct-01 Oct-02 Oct-03 Oct-04 Jun-01 Jan-02 Jun-02 Jan-03 Jun-03 Jan-04 Jun-04 Mar-02 Mar-03 Mar-04 Feb-02 Feb-03 Feb-04 Nov-01 Nov-02 Nov-03 Nov-04 Aug-01 Sep-01 Dec-01 Aug-02 Sep-02 Dec-02 Aug-03 Sep-03 Dec-03 Aug-04 Sep-04 Dec-04 May-01 May-02 May-03 May-04 Month of benefit start The off-flow rates presented are produced from the Working Age Statistical Database (WASD). WASD does not include a proportion of short-term Incapacity Benefit claims, therefore the off-flows presented will be lower than actual rates. However, trends over time will be consistent.

12. Other programmes • Disability Employment Advisers - nationwide • Workstep – 32,000 jobs • Access to Work – 35,000 beneficiaries • Work Preparation – often unpaid work placements • Job Rehabilitation & Retention Pilots – six pilot areas • Work-based Learning for Adults • Occupational Health Assessments

13. What’s changed since 2005? • ESA introduced for new claimants 2008 • Changing the bar between JSA and IB/ESA • IB reassessment • Pathways to Work replaced by Work Programme • Workstep replaced by Work Choice

14. Overall, a slow fall • 7% fall to May 2008 • Recession rise already turned round in 2010 • Further 5% fall to May 2013 • A total fall from peak of 325,560 • But, changing the bar between ESA/IB and JSA moved them over

15. A lot going on underneath that

16. ESA and IB spending – real terms to March 2012

17. ESA claimants • About 25% of ESA flow WCA are WRAG • 30% leave before assessment – lower than IB proportions leaving in 6 months • For Ex-IB about 40% of WCA are WRAG • Only 1.4% leave before assessment

18. ESA numbers by condition

19. Previous performance • Before recession, JCP measured ‘job outcomes’ as target • Here shown as % of ESA/IB stock • Around 1 in 200 started work each month • Economy ...

20. Programme figures looked better because... • Covering inflows only – the largest reason • Substantially voluntary • Those wanting to return to work volunteered • At some periods, classification used to determine referrals (Pathways) • Programme and benefit figures used in defining Work Programme targets • But included those getting better and going back to previous jobs

21. Work Programme performance • Contractual measure driven as much by inflow changes as actual performance • Cohort measures much better • Summarised in 12-month and 24-month measures • And, later, sustainment analysis

22. Looking at cohorts (averaged)

23. DWP 12-month measure • Performance improved for other large groups • Not for ESA flow • Maybe marginal gain • Referral cohort expanded to longer prognoses • And bar between JSA and ESA different from estimates bases on JSA/IB bar

24. Comparing cohort performance with prior JCP JOT • DWP non-intervention was 15% for completed cohorts • But for 3-month prognosis of fit for work • Not current referrals • Longer prognosis periods imply lower early job outcomes (at the least)

25. The task ahead • Achieving job outcome success while • Dealing sensitively with referrals for people in early stages of treatment • Particularly mental health – treatment in first few months may impede engagement