Following the recent reforms to Employment and Support Allowance (ESA) contained in the Welfare Reform and Work Bill, which has now been approved by both Houses of Parliament, which a number of you have contacted me about, I wanted to clarify why these measures have been introduced and how they will help ESA claimants placed in Work Related Activity Group.
Under these reforms, from April 2017, new ESA claimants placed in the work-related activity group (WRAG) will receive the same rate of benefit as Jobseeker’s Allowance (JSA). This change only affects new claims after that date and will not affect those already receiving ESA.
Under the current arrangements, those in the WRAG receive additional cash payments, however little employment support appropriate for their needs to enable them to find employment. To address this, instead of spending this money on cash payments, which are not having the desired effect of moving people closer to work, the Government wants to invest this money in additional practical support for people with limited capability for work – this new funding will be worth £100 million by 2020-21.
The amendments made to this policy in the House of Lords would have effectively prevented the Government’s proposal from taking place, which is why I could not support them. The amendments would have blocked the reform until the Secretary of State published a report detailing the expected impact on claimants’ health, finances and ability to return to work. It would have been impossible for the Government to provide the majority of what was being proposed, because the data available prior to actual implementation does not allow us to make any meaningful estimate of such impacts. What it is possible for the Government to provide in advance of implementation – the estimated financial effect of the reforms – has already been provided, along with other impacts, in the impact assessment that was published on 20th July last year.
The Government made a number of concessions in response to issues raised in both Houses, including an additional £15 million for the Jobcentre Flexible Support Fund to be targeted specifically at people with limited capability for work. The changes have been debated extensively and I think the Government has listened carefully to views expressed in those debates. I do think this reform is the right thing to do to provide support to enable people to find employment, and I am glad that it has now been agreed by both the Lords and the Commons. This does make clear how important it is that the initial assessment process places claimants into the correct group in the first place and I will keep monitoring progress on this issue.