The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I will now repeat a Statement made earlier in the other place.
“The Government are committed to enabling disabled people to fulfil their potential and play a full role in society. Crucial to that is the reform of disability living allowance, a lifeline for many but which is simply not working in its current form.
In the past 10 years, the number of people claiming rose by more than a third, from around 2.4 million to 3.2 million and expenditure is now far in excess of initial estimated costs. This year the Department for Work and Pensions expects to spend more than £13 billion on DLA. As a percentage of GDP, we spend a fifth more than the EU average on disability benefits and we expect to spend more in real terms in 2015-16 than we did in 2009-10. Today we are publishing the Government’s consultation responses on the draft assessment criteria and on the detailed design of PIP. Alongside that, I will be laying in draft before Parliament the main PIP regulations, setting out the PIP entitlement conditions, assessment criteria and payment rates. We will also publish in draft what the transitional arrangements might look like. The main scheme regulations are subject to the affirmative procedure and I look forward to debating them in full early next year.
Personal independence payment will be easier to understand and administer, financially sustainable and more objective. Throughout the whole development, we have consulted widely with disabled people and we have used their views to inform policy design and implementation plans. As a result of hearing those views, we have made several key changes to the final assessment criteria. I would like to thank the individuals and organisations who contributed.
Starting with the rates, I am pleased to confirm that the rates for PIP will be set at the same rates as DLA. The daily living enhanced rate of PIP will be the same as the higher-rate care component of DLA, and the standard rate of the daily living component will be set at the middle-rate DLA care component. The mobility rates of PIP will be the same as the DLA rates. Furthermore, following the Autumn Statement, these disability benefits will be protected within our uprating measures. PIP, like DLA and carer’s allowance, will continue to be uprated by inflation.
The most important thing I want to announce today is that we have listened and acted on the huge amount of consultation we have had with disabled people and disability groups. We have made specific key changes as a result of our engagement. These are outlined in full in our consultation responses and include broadening our approach to aids and appliances, assessing ability to read and taking account of specialist orientation aids that help mobility; mirroring the linking rules for DLA, which will help to ensure continuity for people with fluctuating conditions; and new plans for contacting young people when they reach the age of 16, or their appointees, to help a smooth transition to PIP. All the changes we have made address the genuine concerns of disabled people and the organisations representing them. Overall, their effect is to make PIP more transparent, objective and fair.
We also listened carefully to concerns about the speed of reassessment. To that end, we will now undertake a significantly slower reassessment timetable to ensure we get this right. It will be phased in, starting with new claims only, in a controlled start area in the north-west and parts of the north-east of England from April 2013. We will then take new claims nationally from June 2013. From October 2013, we will start reassessing people whose DLA award is due to end, people who report a change in condition and young people who reach the age of 16. But now the peak period of reassessments will not start until October 2015. That means we can learn from the early introduction of PIP, testing our process and making sure the assessment is working correctly before we embark on higher volumes. We will then consider the findings of our first independent review, planned for 2014, and act on them. Importantly, unless people report a change in their condition, those with a lifetime or indefinite DLA award will not be reassessed until October 2015 at the earliest.
We can now publish caseload assumptions about the impact of PIP. Those figures clearly show that PIP will deliver its key objective of focusing support on those with the greatest needs. By October 2015, we estimate that we will have reassessed 560,000 claimants. Of those, 160,000 will get a reduced award and 170,000 will get no award. However, 230,000 will get the same support or more support. Under the new criteria, almost a quarter of PIP recipients will get both of the highest rates, worth £134.40 each week, compared with only 16% on DLA.
By reforming the system and ensuring that it is fit for the 21st century, we can use the money we spend on disabled people more efficiently and effectively to help those most in need”.
Lord Freud
My Lords, I thank the noble Lord, Lord McKenzie, for his speech and his—as ever—very thoughtful questions. I will do my best to deal with as many as I can.
I should preface this by saying that we are going to embark on a major exercise and I am determined that it will not be only when we debate the regulations that we will get the information across. There will also be some sessions for noble Lords where we will be able to go through issues with officials and start to look at the detail so that there is a real level of information for all those who are interested. I have made that commitment generally in respect of all the welfare changes we are making, because I acknowledge that there are a lot of them. They require a level of understanding and focus that cannot always be dealt with purely in this Chamber so we have to expand that process.
Picking up the point about the speed of reassessment, that was an issue that I was able to talk about last January, I think it was, when we were very focused on the right speed of introduction. As we introduce a number of very significant changes, we are determined to deliver them safely and steadily, looking carefully at their impacts. That is our approach as we get into the detailed implementation, as it is our approach here and on a lot of the other changes that we are making.
On the question of capacity in relation to Atos, we conducted an open competition in which we measured the capacity of the organisations to deliver on what is the reality on the ground—that was an objective assessment. It is a different process from the WCA, in particular in the delivery, where the bids were looking at delivering a more localised service using health partners.
We are maintaining the existing arrangements for passporting in relation to DWP benefits and we want to ensure that external passports such as concessionary travel and the blue badge scheme are maintained. Those arrangements in particular will be a matter for the other departments which manage the passported services.
It is very difficult to summarise some of the detail about the types of people who are covered by DLA but are not in PIP because we are moving from a non-objective test to an objective test where we can start to measure properly, coherently and systematically the people who really need the support. This test will make sure that the money we have for people who are disabled goes to those who need it most. The figures I have show that, up to 2015-16, we shall be spending more in real terms each year than in the 2009-10 base year.
There has been appropriate consultation across government in introducing PIP. The noble Lord, Lord McKenzie, will have seen the approach to the impact assessments in the Autumn Statement, which goes through segment by segment trying to look at all the impacts on a decile basis. I suspect that he will not be entirely satisfied with that but there is a lot of information in that particular piece of analysis. As the noble Lord will know, like DLA, PIP is payable to those who are both in and out of work. One of the unfortunate myths surrounding DLA among too many communities is that it is an out-of-work benefit, which it is not. It is reflective of need, and people get it either way. We will be signposting people to other available support such as Access to Work which, as noble Lords may remember, has been called “the DWP’s greatest secret”.
I hope I have covered most of the noble Lord’s key questions. However, to the extent that I have not, I will not offer to write on this occasion because I know that we will have ample opportunity to dig into some of these issues over the next couple of months.
Baroness Turner of Camden
My Lords, the noble Lord will no doubt remember that I have raised the issue of Remploy on a number of occasions in the past. My current information is that most of the people who were made redundant as the result of the closure of the Remploy factories remain unemployed now. So getting rid of them has not increased opportunities for them to become independent—quite the contrary. I am sure the Minister knows that the unions involved are still protesting about it and still believe that the closure of the Remploy factories has certainly not helped the disabled people who once worked there and had the opportunity to make some sort of living. There are also, of course, the people who supervised their work—looking after disabled people is a specialist kind of supervision which requires a bit more training perhaps than ordinary supervision—and they also have been made redundant.
I am glad to note that the Government are continuing with their consultation and paying some attention to the way in which the transition from DLA to PIP will take place. That is very important because I have received a number of letters from disabled people expressing a great deal of concern about the transition. Although it is very nice to talk about independence and so on, one of the first things one loses when one becomes at all disabled is a feeling of independence. I speak from some knowledge because I am partially, although not very, disabled myself. Things that you used to do for yourself you have to rely on other people to do for you. It is all very well if you can afford to pay someone else to assist you but that is not the case for very many people. I am fortunate enough in that I can pay for others to assist me, but if I were not able to and relied on DLA, I would be very concerned about whether my independence would continue to be looked after if I had to rely on a different kind of benefit. So it is going to be very important to look at the transition because, as far as I can see, people who are disabled are very worried about moving from one benefit to another.
I ask the Minister: is there an appropriate system of appeal? If people are assessed in a way that they feel is not correct and does not maintain their independence, it is very important that there is a system of appeal. My understanding is that, in the current situation where there are appeals, roughly 40% have been successful. This indicates that the people doing the assessing have not been very skilled in their assessment. It is, therefore, necessary to have an appeal system.
Lord Freud
On the noble Baroness’s key question, clearly there will be an appeals system, as there is for the WCA. The reason behind the 40% success rate for those who go to appeal—and that figure is roughly right—is usually that there is new information, either oral or written, which was not originally available. On that basis, I do not think it is fair to say that the original WCA and Atos were at fault. Clearly that is not an appropriate charge if one is looking at a different set of information. The real question is whether all the relevant information can be made available at an early stage. We are looking to make sure that there is not additional information which would mean a claimant going to appeal, as that is expensive. The question is whether we can ascertain that earlier in order to truncate the process.
Baroness Thomas of Winchester
My Lords, I am very grateful to the noble Lord and his department for listening so extensively to arguments about the needs of disabled people. I am particularly pleased to find that there is a broadening of the definition of people who need to use aids and appliances. At one stage, it looked as though people who used aids and appliances would be thought to be okay and that they would not need any extra resources. Perhaps I may ask a question following on from the one posed by the noble Baroness, Lady Turner, rather than continuing with the Minister’s theme. It concerns the treatment of medical reports. I am rather shocked to find that only a very small proportion of medical reports seem to be read, particularly at the first stage. Will the medical report of every claimant be sought and read by assessors; or will it still be the case that only a proportion of them are read; or will it be left to a decision-maker in the DWP to read them? I am particularly pleased that these regulations are not set in stone yet. Am I right in saying that they are still in draft?
Lord Freud
My Lords, on my noble friend’s question about the medical reports, my understanding is that all information which is relevant is brought to the assessments, and that indeed people—supporters or family—can be brought forward to make the case and provide evidence. Again, I am not sure about the extent to which the fine detail of this issue is yet locked down. We are going through the details, and indeed on Monday we can start to discuss some of the fine points. The regulations have been laid in draft to be looked at by the various committees—the Secondary Legislation Scrutiny Committee and so on—and I think that that is the stage of the process that we are at. The noble Baroness is looking puzzled. If I am wrong on that, I shall make sure that that is corrected.
Lord Sutherland of Houndwood
My Lords, I welcome the Statement. There are a number of good things in it. However, I should like to ask for reassurance on a specific point. Can the Minister reassure us, either now or certainly at the stage at which regulations are introduced, about the extent to which these changes and their impact will be monitored—for example, in relation to the employability of disabled people, in relation to whether there is a rise in demand for additional residential or homecare support, and in relation to whether there is consistency of assessment between the two different assessing bodies? There are a number of points here on which many of us would be much reassured if monitoring arrangements were in place. No Government can get all of this right. We will be bombarded with statistics from around the whole country, and it would be useful to know that central and independent monitoring was taking place.
Lord Freud
My Lords, we are planning to have a real look at this in the autumn of 2014, once the system is up and running. I am sure that we have not yet fine-tuned the exact nature of what we will be testing for, but consistency of application will clearly be one thing. We generally watch that quite closely but that is likely to be one of the issues, and the impacts will be another area which it is likely that that 2014 process will cover.
The Lord Bishop of Exeter
My Lords, I go back to the question of objective testing. I speak as the father of a 33 year-old Down’s syndrome daughter, who is in supported accommodation and in receipt of DLA. She has recently had her benefits cut to the point where they barely cover her housing and food costs. Were it not for the financial support that she receives from us, her parents, she would not be able to access the integrated drama group, visit the gym or go swimming—the very things that give quality to her life. To what extent would the criteria for assessing PIP cover not just the hard needs that enable a person to survive but the soft needs that enable them to thrive? What assurance will we have that there will be real consistency across the country, rather than the huge variations between local authorities that exist at present?
Lord Freud
My Lords, clearly what we are talking about today is a centralised national process. There are social care provisions on the ground which local authorities are responsible for. PIP will be far more consistent and, indeed, objective than the current DLA, where the criteria for deciding who is entitled to DLA have become increasingly fuzzy. That is one of the problems associated with DLA. The money is designed to deal with the extra costs of being disabled, and those costs are incurred whether someone is in work or out of work—they are extra costs that need to be borne. However, the point of it being made as a payment, as opposed to a provision, is so that people can decide where best to apply those funds. As the right reverend Prelate said, some people will decide on the softer things, which for certain people are just as important as the harder requirements, but it is up to them to decide how to spend that money.
Baroness Hollis of Heigham
My Lords, I wish to make two brief comments. First, I have a question, which I am sure the noble Lord will be able to answer. Of the 170,000 people who are going to lose DLA when it moves to PIP, how many are on the current lower-level rate? Secondly, perhaps I may challenge the Minister to be wary of the assumption that DLA should be an objective test. It was never intended to be as such in 1992, when we introduced it, primarily because two people with the same objective disability may have very different competences in coping with that disability. It will depend on their resilience, their family support, their educational ability and their financial resources. Because DLA was person-centred and not a box-ticking exercise against some objective at their assessment, it was able to respond to that difference in competence, as well as to the depth of the disability. I very much hope that the Minister will not be led by a false myth into thinking that this can be reduced to an objective account of external health or mental health which is standardised across the country. It cannot be and, in my view, it should not be.
I support my noble friend very strongly in urging the department to come up with a layered assessment of how all of those benefit changes are interacting. I share briefly with the House a letter I received from a disabled middle-aged lady in an eastern region city who lives in a two-bedroom bungalow. She has rented a nearby garage so that she can charge up her mobility scooter. She is now faced with a housing benefit cut and losing one of her bedrooms of her bungalow, but as she says, there is no one-bedroom bungalow for her to go to. She has had a wet room installed under the disability facilities grant, so if she moves out within five years she would have to repay the grant. If she moves she has to repay the grant; if she stays she has a housing benefit cut. On top of that, she will almost certainly be forced to pay 20% for the first time on council tax, even though she is on benefit, and on top of that, some of her DLA support may also be questioned under PIP. What advice will the noble Lord give me to give to that lady?
Lord Freud
Yes, if I can deal with those in order. We do not have a breakdown of where people have moved from.
Lord Freud
I am told that we do not have that information. Clearly, we will be able to go through the figures, to the extent that we have them, when we meet on Monday. When I said that PIP was objective, I was not trying to imply that it was using the medical model. It is objective in the sense that it is looked at through specific competences. As the noble Baroness pointed out, people can respond very differently to different levels of disability. Taking the example raised by the noble Baroness, a substantial amount had been spent on adaptations—she referred to the wet room. We have a specific exemption for people with very heavily adapted homes for that reason. It would not make sense to sell, so it would not make sense to move. Clearly, I cannot comment on a particular case but one needs to look closely before one assumes the worst.
In making the different changes to our welfare system, we have set in train a thorough level of monitoring and assessment as we gradually bring these systems in. One of the reasons for our strategy of gradualism and monitoring is to understand what is happening on the ground and make appropriate changes if we find that we have to do so.
Baroness Uddin
I hesitate to rise because I missed part of the noble Lord’s Statement. I apologise for that but I have been spurred on by the right reverend Prelate and my noble friend Lady Hollis.
I refer to the way in which the noble Lord has approached this whole matter and the fact that the Statement was supposed to clarify the personal independence payment. I declare an interest as a mother of a child who is 33 and has autism, and I have some experience of speaking to other people. I say with respect that ordinarily and normally the Minister provides a great deal of clarity on such matters. However, today he has been less clear. If he is not able to put forward the case with clarity, how can he reassure the House and people with disabilities and their carers who are in a great deal of confusion, disarray and distress, as clearly laid out by a number of noble Lords this afternoon?
Lord Freud
My Lords, I made a very full Statement, which I hope was comprehensive. We have focused a lot on people with mental health and learning difficulties. Indeed, we divided communication activity in the new assessment criteria, so there is a new activity focused on reading and understanding signs, symbols and words. That reflects the importance we place on the non-physical side which is one of the areas on which PIP is far more satisfactory than DLA
Baroness Sherlock
I shall pick up where my noble friend Lady Hollis stopped. Will the Minister help us to understand the implication of the fact that some people will be better off and some worse off? We cannot understand whether those who will be worse off are those, for example, who are getting the severe disability premium at the moment on one benefit. It is hard to understand. We may simply be redistributing the large amounts of money currently given to people with very high needs by giving smaller amounts of money to those who have lower needs. A number of noble Lords were at a briefing this morning where a range of charities were raising questions with us. Has the Minister been able to reflect, for example, on what happens to those who currently receive severe disability premium—those on mid or high rate DLA who live alone and do not have a carer in receipt of carer’s allowance?
Lord Freud
We may have to pick that up and take it later as we are out of time. Within PIP there is a greater concentration towards the people with highest needs. I gave out percentages: I think it was 23% of people on both top rates, which is more than under DLA.