The Budget and DLA: initial reactions

From a disability perspective, the big announcement in today’s Budget was the introduction of medical assessments for all DLA claimants from 2013-14.

The relevant paragraph is the following from the Budget document:

1.103 The Government will reform the Disability Living Allowance (DLA) to ensure support is targeted on those with the highest medical need. The Government will introduce the use of objective medical assessments for all DLA claimants from 2013-14 to ensure payments are only made for as long as a claimant needs them.

As I highlighted in my post on “Poverty, worklessness… and DLA?”, the government has established a narrative where it sees reforms to disability benefits as reducing welfare dependency and promoting work. This is reflected again on page 8 (pdf version) of the Budget document.

The same document also talks about a “fair and responsible benefit system” that supports those most in need without creating dependency for those would be better off in work (page 38, pdf version).

And the key motivation for all of this is revealed on page 24 (pdf version) of the Budget document:

The Government will also introduce measures to control spending on tax credits, housing benefit and disability benefits. [emphasis added]

To this end, the introduction of medical assessments for DLA is proposed to save £360m in 2013/14 and £1.075bn in 2014/15. Put another way, this is 2.9% and 8.5% respectively of the disability benefits bill for 2008/09 (which was £12.6bn).

There are several issues arising from this (these are judgments I hope to expand on as and when time allows):

1. The VAT increase affects everyone equally. However, the change from the Retail Prices Index to the Consumer Prices Index is only applied to benefits, thereby affecting disabled people. By dropping 2.1% per annum (RPI is currently 5.5% and CPI is 3.4%) the government is estimated to save £6bn per year by the end of the Parliament. The combined effect of the VAT increase and fiddling with the different prices indices represents a double whammy for disabled people.

(1a. I’m unclear at the moment if benefits are also going to be frozen, rather than rise at the rate of inflation. If so, this could be a triple whammy for disabled people. Anyone who knows more about this than me, please let me know.)

2. Introducing medical assessment suggests the Tories think people are faking disability to claim benefits. Once again, they’re confusing the care and support needs of disabled and older people with being in work. DLA simply recognises that there are extra costs associated with day-to-day living if you are a disabled person.

3. Part of the increase in DLA uptake relates to the fact more people are living independently rather than in a residential setting. Effectively cutting DLA risks reversing this rise in independent living.

4. I suspect the costs of administering medical assessments will be big. I’ve found some figures relating to the introduction of the Employment Support Allowance to support this argument, which I’ll blog later.

5. The potential savings from introducing the medical assessment aren’t particularly big, in absolute or relative terms. This suggests to me that this move by the coalition government is ideological: they are out to get the “scroungers” rather than provide real support to people who need it.

6. By implying a financial cap on the support available through DLA, this is the start of a slippery slope: just look at what the restrictions on the ILF budget have meant in practice: no new applications to that fund until at least April 2011 (more details here)

7. There is no mention in the Budget of a similar approach to Attendance Allowance, which is essentially the same benefit as DLA but for a different age group (i.e. over 65s), and which actually costs more than DLA.

8. I suspect a reduced number of DLA benefit holders will place much more pressure on adult social care, where social care funding is already in a mess. This will compound the pressures on local government introduced by the difficulties the ILF is facing.

My overall conclusion is that disabled people will be much worse off as a result of the introduction of medical assessments for DLA, and that these are being introduced for ideological and not financial reasons.

More later.


Freezing the Council Tax

George Osborne’s Budget sop to the public, of freezing Council Tax for a year, is politics at its very worse. It takes the public for fools, in the hope that we’ll be so taken by saving £100 a year we’ll not notice the ideological cuts happening elsewhere.

Beyond the dodgy politics, the Council Tax freeze has a number of serious implications, represented by these questions:

  • What happens when the Council Tax freeze thaws out?
  • What does central government telling local government it has to freeze Council Tax mean for for localism?
  • Despite the gearing effect (Council Tax roughly makes up for only 1/4 of local government budgets), what impact will the freeze on Council Tax have on services provided by local government?
  • If central government is going to make up the shortfall, what other central government funding will stop to pay for it? “Efficiencies”? “Back-office costs”? “Consultants”?

Osborne has form in headline-grabbing tax announcements, as per his inheritance tax announcement three years back. The difference this time is that the nonsense he’s announcing will actually be put into effect.

What a frightening, frightening thought.