Opinion: Disability Living Allowance replacement will cause economic and human cost

Under the Welfare Reform Act 2012, passed by the government earlier this year, Disability Living Allowance (DLA) for disabled people of working age is due to be replaced by Personal Independence Payments (PIPs) with a net result of a 20% reduction by 2015 in the DLA budget – it is worth pointing out at this point that the fraud rate for DLA is estimated by the Department of Works and Pensions to be less than 0.5%.

Last month a report called Reversing Recovery: The hidden economic costs of welfare reform was published looking at the switch from DLA to PIPs and the associated reduction in funding. The report comes to some very interesting conclusions.

The changes to DLA include an official estimate of a 27% reduction in working age disabled people eligible for the Motability car scheme – which is a scheme which allows disabled people and carers to lease a car, powered wheelchair or scooter through their DLA mobility allowance.

This reduction in the Motability scheme, in terms of its impact on the car industry, is huge. Aproximately 300,000, roughly 10%, UK car sales a year will be lost as a result. The report states that this will cause the loss 3,583 jobs, £79 million of tax receipts and a £342 million contribution to GDP.

But bigger than the impact on the car industry, says the report, will be the impact on the people who use the Motability scheme. The 280,000 disabled people who will lose access to the Motability scheme includes many who depend on it in order to be able to travel to work and keep down jobs. Without it, they will be forced to give up work and will also stop paying income tax as a result – another loss to the treasury.

In fact, the report quotes Oxford Economics which says:

The Motability [car] scheme is estimated to enable 12,500 customers and informal carers to get a job, 56,100 to keep a job and in total this is worth £1.2 billion in gross wages per year.

The report estimates that, excluding the lost tax revenue, the cuts to the Motability scheme will cost £324 million in GDP due to users of the scheme being unable to remain in work.

All of this put together does tend to raise some serious questions about how much money the government’s much-vaunted welfare reforms will really save. With the hidden costs of the cuts to the Motability scheme already accounting for half a billion pounds worth, at least, of extra costs, it seems quite likely that the money the treasury saves due to the welfare reforms will be significantly less than expected.

And that’s without even considering the human cost of 280,000 disabled people, the equivalent of the population of Sunderland, potentially being left trapped in their own homes and deprived of the independence that most of us are lucky enough to take for granted.

* George Potter is the Policy Officer for the Lib Dem Disability Association (LDDA), writing in a personal capacity. He blogs at the Potter Blogger.

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37 Comments

  • Grammar Police 30th Jul '12 - 4:11pm

    I don’t think talking about the impact on the UK car industry does you any favours , it takes away from the moral argument.

  • Sam Barnett-Cormack 30th Jul '12 - 5:09pm

    No, the fraud rate in the stats isn’t the rate of people they’ve caught. It was determined several years ago by a sampling exercise, in which those selected in the sample were put under significant extra scrutiny. Both the current and previous Government haven’t done another such exercise since, though statistical methods indicate that the level is likely to have remained largely the same.

    That’s the same exercise that produced the figures for not-exactly-overpayments (no legal overpayment, but people getting more than they perhaps should) – though that aspect of it has been severely criticised in terms of methodology.

  • Sam Barnett-Cormack 30th Jul '12 - 5:15pm

    The impact assessment for the replacement of DLA with PIP is quite clear, as best as I can make out… in each and every year covered by the IA, including the final year in which everyone will have been moved that’s going to be, more will be spent than will be saved.

    To make that abundantly clear, despite giving less money to disabled people, PIP will cost more than DLA. It’s moving money from claimants to private contractors.

  • It is not only the amount of money this change will cost in terms of jobs, tax etc – which is all absolutely relevant, nor is it just the human cost of people being trapped in their homes – which is the most shockingly relevant, it is also about the massive extra costs that will simply be transferred to Social Care, Hospitals, Care Homes, Mental Health Teams, because people will not be able to be independent, earn enough to pay for, or receive help with, the extra costs of being disabled. Indeed they may very likely become isolated, depressed and in need of mental health support as well. Yet the DWP have refused to carry out a Cumulative Impact Assessment to ascertain just how this change, and all the other changes to support for sick and disabled people, will actually work in real terms. What are they afraid of? Perhaps they know that the figures won’t add up and that the moral implications are too shocking to be made public?

  • The inhumanity in this PIP thing is immense. 0.5% fraud so lets bin 20%
    It amazes me how the Lib Dems have not just up and walked out the door telling Cameron they wont be attached to this inhumanity.

    But no – Clegg is just standing idly by doing nothing.

    I will never vote Lib Dem again (and nor will any other disabled person)

  • These are the benefit changes voted for by both of the parliamentary wings of the coalition. If the lib Dem’s don’t like them they should withdrew their support
    Articles like this are very, illuminating and very moral, but the bottom line is that you guys are in power, not in opposition.

  • Barry Edwards 30th Jul '12 - 6:19pm

    George, if you can persuade your LD colleagues to reverse this cut I might change my opinion of the LDs but I doubt if it will happen.

    Everyone says the LDs cannot pull out of the coalition because they will ne hammered in an election. However, if you carry on, you will be hammered in the 2013 county elections and pulverised in the 2014 local and euro elections.

    Will there be any LDs left to fight a general election in 2015?

  • @GrammarPolice Actually I think George does address the moral implications as well. Maybe it needs to be spelled out a little more clearly? If someone who is unable to keep the mobility car or scooter or wheelchair which is their ONLY means of getting around outside, they will effectively be imprisoned in their own homes. In some cases they may not use their allowance to pay for a car, they may use it to pay for a taxi in order to get to places instead. Before anyone sees that as a luxury consider this – you are unable to walk, you are unable to drive because of your disability or illness – how then do you get anywhere? No, you can’t use public transport, because you cannot walk to the bus-stop or the station. So what do you do? You use a taxi. If this is taken away, I for one, will be unable to go anywhere at all. Believe me, it is hard enough living with the pain and complications of a severe illness, but to feel that you are utterly trapped and unable to interact with the rest of the world is just unbearable and inhumane.

  • mike cobley 30th Jul '12 - 6:51pm

    The moral vacuity at the heart of the ATOS system is starkly clear – better that, say, 50 genuine claimants are denied support than one bogus claimant gains unjustly. The WCA, regardless of who began and who enhanced it, is actively creating avoidable suffering, and this party should have nothing to do with it.

  • I commend people like George Potter who stands up for people who feel as though they no longer have a voice in todays society.

    I know I am not particularly liked on this forum and not many people would give a stuff about my personal circumstances.

    We have all heard of the nightmare stories regarding the DWP incapacity benefit migrating to ESA, and people who are wrongly found capable of work, but it is not until you have first hand knowledge and experience of the system that you see most of the stories are true and not just hyperbole.

    I have been off and on sickness benefits for the last 15 years, suffering from severe depression and other medical conditions.

    I was a victim of sexual abuse for 14 years of my life, It is a life sentence that I have to live with and results in bouts of depression and PTSD.

    In January this year I was sent a form to fill in for ESA as my benefit was being migrated.

    I had supporting evidence from my G.P and therapist who both said it would be extremely detrimental to my health unless I was put in the Support Group of ESA.

    Up until July 17th I had not received a thing from the DWP regarding my ESA, No Medical, No Acknowledgement, Nothing.

    On the 17th I received a P45 from Incapacity telling me my benefit had stopped, No letter, No explanation, Zilch.

    Extremely frightened and distressed I phoned the DWP to find out what on earth was going on, explained the situation and was told that. I had been automatically migrated from Incap to ESA based on medical evidence provided.

    This came as a relief, but as I explained to the DWP, i thought this was extremely poor of them not to inform me before hand what was happening and to remember that they are dealing with vulnerable people. The DWP were not very sympathetic and I was basically told that they are dealing with Thousands of people and should accept that there would be some “admin” errors.
    I asked on what basis was i awarded ESA and was informed it was in the Support group and she would resend me the letter in the post.

    By Friday the 27th I should have received my first payment of ESA, but it was not paid.

    Today, still no payment so I was forced to ring the DWP again to find out what the heck is going on, and to stress that I do have financial commitment to meet. I also informed them that I “STILL” had not received any paper work from the dwp regarding my migration from Incapacity Benefit to ESA.
    I was told that I would get a call back from someone who would immediately sanction the payment and explain to me what the heck is going on.

    After getting the call back to confirm the payment, I asked for written confirmation of the benefit that I am in receipt of. this time I was told that I had been migrated to ESA but into the WRAG group.

    You may ask yourself, what’s this guy’s problem, he has been given an award, what matter what group he has been put in.

    Well firstly, I have not received any formal notification to tell me what benefit I am even on
    and Secondly
    I have to go through weekly extensive therapy “AT MY OWN EXPENSE” I might add just to cope with life, Yes my therapy is the ONLY thing that keeps me alive at the moment with the glimmer of hope that things might just get better.

    Being placed the WRAG group will severely interfere with my therapy, I will be forced into work group interviews and classes or risk having my benefits stopped.
    I have not been in the City Centre for years, so I can assure you, there is no way i would be able to attend a Focus group or whatever the DWP decides I need to do, so I guess I will be sanctioned and lose my benefits.

    You might think I am being melodramatic and spouting rubbish, but I assure you, the stress and pressure I now feel under is immense. I am fearful of myself and for what lies ahead. I have battled so many fights and am not sure I have the energy to do another round.

    I considered contacting my MP Simon Wright on this matter and asking him to meet with me, but then thought, why should I have to divulge such personal and traumatic information to a stranger, sure I might have spilled my guts over a forum, but that does not take as much courage as having someone sitting face to face listening to your life story, and besides, the DWP know my history and have medical evidence and statements regarding my past and present, And a ATOS health care professional has decided that I am not worthy of a support group without even seeing me. The Liberal Democrats in government do not seem to be sticking up for sick and disabled people so what would I gain from humiliating myself even further by having a face to face with my MP.

    My room is looking very dark right now

  • Well, given the horror stories of many genuinely disabled people being turned down for DLA when their award is reviewed I have little doubt my son , who has autism , will lose out in the transistion to PIP . Given the fact he is breathing and able to turn a tap on unaided he is very obviously able to work and provide for himself.
    I am trying not to be too scathing about the Lib Dems, I broadly welcomed the coalition as a chance for a new sort of politics .Instead I have been utterly horrified as how the government have unleased the hounds of hell from the right wing press to do an astonishing hatchet job on disability benefits, scroungers , spongers etc etc. The term ‘normal people’ has been used to describe those not claiming benefits . I am utterly gobsmacked as to how or why the Lib Dems have supported all this, I assumed they would at least attempt to curn the excesses of the Tories , not openly collaborate in an endless offensive against the vulnerable and the welfare state. I have no idea if many or any Lib Dems support the trail being blazed by the Tories ‘ sponger hysteria’ campaign or not , but the silence is deafening. And it leaves me to wonder who the Lib Dems will appeal to come 2015 .The Tories will get the thanks for hammering the poor and vulnerable, Labour ( probably undeservedly) will pick up the votes of the left and liberal left , leaving the Lib Dems with nothing. I, and I’m sure many more , people with disabled family and friends- and disabled people themselves, won’t forget the Lib Dems acquiesence in the campaign to stigmatise an entire section of society.And if you think that is hyperbole you haven’t been listening.

  • Little Jackie Paper 30th Jul '12 - 9:01pm

    George – I’ll tell you what your problem is here. This article may very well have some excellent points. Quite frankly I am not wholly convinced that the impact on the car industry is the first consideration here, but you set out reasonable points. What however your article misses totally is the wider context of cuts for disabled people and non-disabed people.

    You talk about, ‘potentially being left trapped in their own homes and deprived of the independence that most of us are lucky enough to take for granted.’ Really? So what about say the working young whose wages do not run to car ownership and who are facing double digit increases in public transport and 20% unemployment? You see George, your argument here would be rather stronger if you looked at better spending, as opposed to simply maintaining spending and hoping that the wider economy comes to your rescue.

    This is the problem that this Coalition is going to run into in a big way in the next 18 months. It is wide open to accusations of cuts for some but not others. My Dad who owns two cars has just got a bus pass. We will soon be assessing people sitting on substantial housing wealth for fuel payments. Now I do apologise for perhaps picking on easy targets here. But bus passes and fuel payments illustrate the problem that arises when there are protections given to areas of spend – the implication is deeper cuts elsewhere. I am yet to hear any convincing argument as to why international development, pensioners and the NHS have seen protections whilst other areas get clobbered. If push came to shove, would we redirect bus pass money to disabled mobility? This is the real rub here – whose cuts.

    Now – of course these are not nice arguments. I wouldn’t want to be the one that talks to voters about cuts to the NHS. But it is one thing to talk about reductions in the DLA budget. It is quite another to do it from within a Coalition government that has talked of immediate deficit reduction as the be-all-and-end-all on pain of national armageddon. Let me be clear, I make no partizan political comment here. I am sure that were Labour in power looking to reduce the deficit we would be seeing similar kinks protections vs cuts and I would be writing much the same.

    But the article really skates very close to hoping that deficit reduction can go along side protected spend with no one else feeling the squeeze, it just isn’t going to happen however ‘deserving’ the cause.

  • Grammar Police 30th Jul '12 - 9:10pm

    @judy I think you’re missing my point. I understand the need for the mobility scheme as well as many on this forum, as my mother needs it.

    @George Potter – arguing that we can’t possibly afford to change the scheme because the UK car industry would lose out seems to me to be surrendering ground to those that argue that this isn’t about the help that people need.

  • Grammar Police 30th Jul '12 - 9:12pm

    Confusing my ‘mobility allowance’ and the ‘Motability scheme’ there! ;o)

  • Grammar Police 30th Jul '12 - 10:30pm

    @George Potter Arguing that we cannot make cuts to Motability because of the potential damage to the car industry makes it sound like you don’t care whether people actually need Motability or not. Benefits aren’t their to support our industries as some kind of State Aid sop.

    If we want to make the argument about costs, far more sensible, imo, to raise the points made by Judy @5.34pm.

  • George Potter – great article. Thanks for standing up for disabled people – unlike the majority of Lib Dem MPs.

    Before the General Election, Danny Alexander supported people with disabilities against ATOS and the changes to the welfare system. As soon as Alexander got into power, he took the government line in attacking and hurting people with disabilities.

    As a former Lib Dem voter, I feel that I have been tricked by the likes of Alexander. I voted Lib Dem in the last two General Elections and in various local elections but I won’t ever vote for the Lib Dems again, due to what the Lib Dems have done to disabled and sick people and due to heir support for the NHS Bill.

    Jenny Tonge is just about the only LD with a conscience.

  • Tony Dawson 31st Jul '12 - 8:13am

    I am concerned how simplistic these arguments can become which sometimes miss the point.

    Nobody can say that the present DLA is ‘spotless': those of us who sometimes have to fight for people to get this benefit which they deserve also encounter people who should clearly never have received it in the first place or have made a serious recovery since they were allocated it and have failed to declare it. This is not ‘fraud’ per se, it is mis-allocation. There is also the major problem of serious obesity, which everyone (DWP, doctors, claimants) seems to ‘dance around’. Increasingly-immobile people often eat too much and can become obese to the point where it makes them grossly-obese and totally immobile, as well as putting extra strain on their arthritis and other illnesses. Could some of these people work if they shed the odd 15 stone?

    Any private organisation which had its major output successfully ‘appealed’ in such a high percentage of cases would not be contracted now, but ATOS lumbers on, safe in the knowledge that the government is very happy with the current ‘mis-hit’ rates and the DWP (whose ‘decisionmakers’ actually make the decisions based upon the ATOS reports) would rubber stamp most of the ATOS reports if the ‘examiner'(sic) presented them with a suduko instead of a “work-related ability test”.

  • The Government is led by mainly men that are massively wealthy by most standards. They dont appreciate the difference coping with a debilitating illness in the family can have on the finances of that family, not just the individual, and the knock on effects of this financial strain has on other areas. Good luck George with your campaign.

  • Storm Childs 31st Jul '12 - 9:09am

    How can anyone say that all the 3m people on DLA cant walk between bus stops and need a car subsidised by the tax payer to get about.

    I work full time and I would love to afford a new car or drive in a luxury car like most DLA claimants and hardly ever used by them but mostly driven by their family members.

    Going back to the question of fraud – the number of fraud officers has been been reduced by this and the prevopus government so the true level of fraud is not know.

  • Sorry George for High jacking your thread.

    Was very distressed and emotional yesterday but that’s no excuse for filling the board with personal emotional problems.

    Please accept my apologies, and please keep up the good work that you do for all sick and disabled people.

    Mods should feel free to delete my previous post if they so wish

  • John Carlisle 31st Jul '12 - 9:28am

    Dear Nobody
    “It amazes me how the Lib Dems have not just up and walked out the door telling Cameron they wont be attached to this inhumanity.”
    Yes, and I will tell you why; because we fiddle around with the small stuff, spending great energy on what are tiny issues for the really oppressed folk like you, i.e. Gay marriage, while letting this slip by, and the NHS bill, and the lack of jobs for youngsters, and, and, and.
    Talk about fiddling while Rome burns!!

  • “How can anyone say that all the 3m people on DLA cant walk between bus stops and need a car subsidised by the tax payer to get about.”

    Why don’t you read the article before making yourself look ridiculous.. DLA doesn’t qualify you to get a mobility car, you have to get the mobility component at a certain level to qualify for a mobility car. I’m sure The Daily Mail has given people like yourself an indepth understanding of the complex issues. If you think DLA is easy to claim try claiming it, you may be surprised.

  • Well said George and Mo hey you want my luxury car Storm Child, ? I could take taxis to work but thats not an refficient way to do it as i live in a remote hamlet. Yes I work and employ people but my earnings have reduced by 3/4 since dx here take my MS and the prospect of never leaving the house, Dignitas beckons unless this is reversed, a holocaust in waiting.

  • my husband is blind but also willing to work but he has just had to leave work due to his eye condition,i have depression as a result, now i am relley scared that he is going to lose his dla

  • Paul Healey 1st Aug '12 - 4:18pm

    I am 57 years old I worked over 30 years, the last 10 years with a disability I didn’t know I had. In the mid nineties I asked my doctor for a scan I knew something was wrong,his reply was, scans are expensive. One day I woke early one morning needing the toilet I tried to get up and found I could not move, every movement from the neck down sent waves of pain surging through my body, after a few months I eventually got movement back, but with pain when I tried to walk or lift anything even a cup of tea. I continued to work through this. In 2006 I eventually had a MRI scan, after another serious attack the nerve pain so bad I was unable to tell the doctor what was wrong. They found two fractures in my neck and multilevel spinal degeneration this had trapped nerves which affected my arms, legs, feet, groin the pain in my groin was akin to being kicked between the legs constantly, it also showed arthritis in my spine and quite a number of other physical problems.Any movement especially trying to walk brought on pain that had me in tears. On top of this I now find I have COPD and emphysema diagnosed this year probably due to lack of decent exercise.I worked in heavy industry all my working life making all my employers barrows full of cash with my time and knowledge. I drive when possible a 15 year old car that I bought, I was told I was entitled to mobility this helps pay for insurance and running costs, but mostly goes to pay the extortionate charges made by our foreign owned utilities company’s. A recent letter from AtoS tells me I am put in the WRAG and from March next year I will be on JSA. Well halleluiah I’m cured unfortunately my body does not agree, I would love to be able to stop taking the Morphine and the other half dozen pain killers or what ever the hell they are and get back to work doing something I enjoyed. The truth is I can’t, even this is being typed by a friend, because the weather is causing the arthritis in my hands to flare up. If anyone thinks that the life of disablement is a holiday and that I’m a lazy scrounger I would trade places with an able bodied person on JSA or a low wage or living in a tent to have my health back as long as they took my disability and all the shit that goes with it, I would even give storm childs my car

  • It’s sad that in order to keep our place in goverment we are introducing support to people who most need our help. In fact it’s disgusting.

  • sorry that should be cutting support

  • Andi Ali1st Aug ’12 – 5:28pm………It’s sad that in order to keep our place in goverment we are introducing support to people who most need our help. In fact it’s disgusting………….

    My daughter, despite winning an appeal last October, has just been informed that she is ‘fit for work’. She must now go through the whole ‘rigmarole’ again and, as her condition has worsened, I have no doubt she’ll win.
    However, contrary to some comments here, she is not blessed with savings and lives ‘hand to mouth’. Her support has been cut immediately and, although in x months time her benefits will (hopefully) be reinstated and backdated there is the constant worrying of making ends meet and the inevitable bank charges/disconnected phone etc. NONE of which are re-imbursed.Disgusting, indeed.

  • If the Liberal Democrats are of the view that replacing DLA is economically counterproductive, not to mention its other evils, then why do you continue to support it in Parliament? Your political party has precisely zero integrity. At least the Tories have the decency to stab from the back.

    FYI: not everyone on DLA qualifies for Motability, far from it. That said, DLA money is often used for other care purposes that enable many to stay in work.

  • Yusuf Osman 3rd Aug '12 - 5:37pm

    Thanks George for an interesting article. If those in favour of DLA reform can have many arguments I don’t see why those of us who are opposed can’t destroy those arguments with a multi layered approach. As a blind part-time PhD student I come to this from the moral point of view and of course from enlightened self-interest. I’ve written 2 articles on this subject
    http://www.libdemvoice.org/opinion-whats-wrong-with-personal-independence-payments-28921.html
    http://www.libdemvoice.org/opinion-the-value-of-reading-29232.html
    so won’t spend too much time. But, I wanted to say something about these supposed “luxury cars”. As has already been pointed out you have to be on the highest level of DLA in order to qualify to join the Motability scheme. Most of the people who get the higher level are in wheelchairs and therefore need large specially adapted vehicles with ramps. In comparison to the heart rending stories earlier my own is rather mundane. I had to ask my nextdoor neighbour to pair my socks for me as I had no other sighted assistance today. I know the neighbours very well, they are always willing to help when I ask. But I’m left feeling rather helpless and dependant. We live in a society and we all help each other, but if you have a disability your often left feeling that your more helpless than other people and so less valued. A rather depressing note on which to end.

  • Nick Edwards 16th Oct '14 - 11:54pm

    I am 46 and 8 months ago I was diagnosed with a right drop foot. I cant get a brace and I have severe tremors. I can’t drive my car how my foot is. I have worked all my adult life and paid my taxes. I applied for P.I.P and scored 10 on my mobility so I got the low rate . I am not after a new car, I wanted my own car adapted through mobility. The DVLA wont let me drive as I am not safe to. arrive it the normal way. I am going to be a prisoner in my home. I need to drive to work 30 miles each way. I hate claiming benefits

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