Banning people with anxiety, ADHD or autism from claiming disability benefits would not deliver major financial savings and would probably make it harder for them to get or stay in a job and participate in society, a leading thinktank has warned.
The Resolution Foundation said any proposals to make certain mental health and neurodevelopmental conditions ineligible for personal independence payments (Pip) would be “crude changes” aimed at hitting unrealistic savings targets.
But it warned that Pip was “failing on several fronts” and called for a major overhaul to keep a lid on costs – currently rising at an “unsustainable” rate – and restore public trust in a benefit widely seen as unfair and dysfunctional.
About £4.4bn a year could be saved if Pip support was better targeted, it said. Cash support could be removed from an estimated one in six working-age Pip claimants (670,000) who report having no extra costs as a result of their disability.
However, it added that any reforms should proceed with caution because of the success of Pip in ensuring high numbers of disabled and ill people were able to participate in “economically valuable” activities, such as work, caring, training or volunteering, that they would not be able to do otherwise.
Official concern over Pip has soared in recent years, in part because of the rapidly rising number of claimants, particularly among young people, with much of that sharp increase linked to claims for mental health, ADHD and autism.
Spending on Pip in England and Wales has risen in real terms by 183% since it was introduced in 2014. This year the bill is expected to be £28bn, rising to £34bn by the end of the decade, according to official forecasts.
Attempts by the previous Labour administration under Keir Starmer to push through £5bn of crude savings to Pip collapsed last year amid a rebellion of backbench MPs. His successor, Andy Burnham, has said renewed attempts to reform benefits would not involve “crude cuts”.
Welfare officials, who are awaiting an official review of Pip by welfare minister Stephen Timms and the Milburn review of the youth jobs crisis, are understood to be considering proposals to exclude under-25s from the Pip system.
Pip has also found itself at the heart of culture war rows, with some, such as the Tory leader, Kemi Badenoch, arguing it should not be paid to claimants with so-called “mild” conditions that were not disabling or likely to incur higher daily living costs.
The Resolution Foundation said attempting to link Pip awards to particular conditions was simplistic and impractical as most claimants reported multiple conditions – often combining physical, mental and behavioural conditions.
Lindsay Judge, the thinktank’s research director, said: “Pip is a vital benefit for disabled people that enables them to participate in society and live fuller and more active lives. But the current system is failing on several fronts – claimants don’t trust it, awards don’t fully reflect the nature of disability today and spending is rising unsustainably.
“As well as continuing to provide cash awards to help with ongoing additional costs, a reformed Pip system should focus on supporting disabled people to participate in society. A system more attuned to people’s needs would also mean that around one in six current Pip recipients who don’t face significant limitations or additional costs because of their disability would no longer qualify for cash support.
“There is no perfect system of disability support, but one that better reflects the fact that people often have multiple and fluctuating conditions must target greater support and engagement where it’s needed, and avoid waste where it’s not.”
A Department for Work and Pensions spokesperson said: “Pip is awarded based on a functional assessment that determines how a condition impacts a person’s day-to-day needs. But as the Timms Review report made clear, Pip is no longer fit for purpose and the recommendations from its final report will lay the foundation for sustainable reform.”
