Fit for Purpose? Welfare Reform and Challenges for Health and Labour Market Policy in the UK

Abstract

In the UK, as in some other EU states, the focus of recent welfare reforms has switched from those on unemployment benefits to those receiving sickness/incapacity benefits (IBs), reflecting concerns around the large numbers falling into the this last group. The Labour government elected in 1997 introduced a range of measures to activate those on IBs, setting a target of a one million reduction in the number of claimants by the end of 2015. The Conservative Party similarly came to acknowledge that high levels of IB claiming represented a problem of ‘unemployment hidden as sickness’, and in coalition now proposes even more aggressive supply-side strategies. This paper provides an extensive review of the most recent evidence to identify factors driving the rise in the number of people claiming IBs and, in light of this analysis, assesses whether current policy is fit for purpose. An important conclusion is that any national ‘one-size fits all’ supply-side policy response is blind to the distinctive geography of receipt of IBs and the complex combination of factors that leave some people trapped on these benefits.