“We are not cutting the money that is going into supporting disability.”
David Cameron, 5 September 2012
The background
The issue of cuts to benefits for disabled people must have been an unwelcome topic for a Prime Minister who has been busy cheering on Britain’s Paralympians this week.
But Labour MPs were determined to put David Cameron on the spot at the first session of Prime Minister’s Questions after the long summer recess.
What did he have to say to leading disabled athletes who said this week that they would be “lost” without their Disability Living Allowance payment?
After putting his praise for Britain’s Paralympians on record, Mr Cameron replied: “We are not cutting the money that is going into supporting disability. We are reforming the system…it’s all about recognising people’s needs.”
Labour’s Anne McGuire accused him of “waffle” and said 600,000 people would see their income cut. The PM was having none of it, preferring to talk about the “huge consultation” that had gone into the policy change.
Cruel cut or long-overdue reform? Let’s find out.
The analysis
Disability Living Allowance (DLA) is a non-means-tested, non-taxable cash payment that disabled people can claim if they are in work or not. It’s supposed to help with the extra costs of day-to-day caused by their condition.
The government has decided to replace it with the Personal Independence Payment.
It says there will be a more rigorous system of medical assessments to ensure people do not end up getting the money indefinitely if their condition improves.
The Department of Work and Pensions (DWP) says that, at the moment, 70 per cent of DLA awards are open-ended, and there is no clear guidance on reporting a change in circumstances.
The new checking process means that about 500,000 fewer adults will claim DLA by 2015/16, resulting in an expected saving to the Exchequer of £2,240m over three years.
Crucially, the changes will only apply to working age people. Children and over-65s who claim the benefit will be unaffected by the switch.
Clearly, for technical, moral or political reasons, there was little appetite for a raid on DLA for disabled children or pensioners when the spending cuts were decided.
That is the key fact that enables Mr Cameron to say – choosing his words carefully – that the government is “not cutting the money that is going into supporting disability”.
DWP is expecting the amount of money spent on children and pensioners to go up over the next few years. That’s in line with the general increased uptake in DLA that we have seen since the payment was introduced in the early 1990s.
Claimants went up from about 2.4 million to about 3.3 million in ten years and if the government hadn’t intervened, they say, the cost would have carried on spiralling upwards.
The cuts to payments to working-age people – from £7.5bn this year to just under £6.9bn in 2015/16 – stabilises the overall spending figure but doesn’t actually reduce it by much compared to current levels because spending on children and the elderly goes up (here, table 2b).
That’s why DWP figures show that total spend on DLA will be more in 2015/16 than it was in 2011/12 (table 1b).
The verdict
But as far as DLA is concerned, Mr Cameron is correct to say that the total spend on Disability Living Allowance for people of all ages will not be lower in 2015/16 than it is now.
That doesn’t mean there won’t be a cut, in the sense that less money will now be spent than was previously envisaged.
Rightly or wrongly, the government has taken steps to curb the trend of rising spending on DLA. About half a million people will be affected.
Unfortunately for the Prime Minister, from a purely political point of view, the victims of the cut are the same demographic group in the limelight now thanks to the Paralympics, and, like the crowds who booed George Osborne this week, they are refusing to stay silent.
We also note that we have FactChecked other aspects of the government’s reform to benefits and tax credits and found that disabled children are set to lose out in other areas.
By Patrick Worrall
