The UK's current employment statistics mask the hidden
unemployment of people on incapacity benefits. However, according
to the Work Foundation, the Budget's emphasis on regional
flexibility, as well as regional and urban renewal offers a real
opportunity to tackle the issue.
A recent submission to the Work and Pensions Select Committee by
the Work Foundation and the Wise Group, a charity that helps
unemployed people back into work, highlighted the extent of
incapacity benefit in the UK.
There are currently 2.7 million people of working age claiming
incapacity benefits, which is more than the combined total of lone
parents and unemployed people on benefits.
Between 1979 and 2002 the number of people receiving incapacity
benefits tripled, and once someone has received benefits for 12
months, the average duration of their claim is eight years.
In 1994/1995 25% of men between the ages of 60 and 64 received
incapacity benefits. Of these, 18% were claiming for mental
disorders, and the highest increase between 1980 and 1994 was for
depressive disorders.
The Work Foundation's submission said, "The emergence of mass
unemployment, de-industrialisation and the changing geography of UK
economic activity all took place at more or less the same time as
the rise in incapacity benefit receipt; and it is difficult to deny
a connection between these phenomena.
"It is surely no surprise that the areas hardest hit by industrial
decline are also the ones most likely to see high levels of
inactivity. These are the regions where the inactive, discouraged
older workers are most likely to reside. In such cases incapacity
benefit or disabled living allowance might seem like a reasonable
stopgap between work and retirement."
However, while boosting employment in deprived parts of the country
is a way forward, the Work Foundation and the Wise Group also
highlighted how difficult it can be to move people off incapacity
benefit and into jobs.
This is a complex process and a "one size fits all" approach to
welfare-to-work policy is not going to be effective, they said.
The good news is that there are examples across the country where
other approaches to this complex problem are working. These include
using intermediate labour markets to help people make the
transition from benefits to work by developing employability skills
through a period of temporary work.