Government spending on disabled people

By Bernadette Meaden
March 29, 2016

Since the Budget, the issue of spending cuts affecting disabled people has been given some long-overdue media attention. Conservative MPs, when challenged, have tended to say 'government spending on disabled people is rising'. A figure of around £50 billion is often quoted. But what is included in this figure, and how is it spent?

The focus of media attention has mainly been on Personal Independence Payments, (PIP) and to a lesser extent Employment Support Allowance (ESA), both benefits paid to working-age people with disabilities or chronic ill health. The few disabled people invited to appear in the media to talk about it have been people like Cherylee Houston  who stars in Coronation Street, and Ellen Clifford of Disabled People Against Cuts, both relatively young women.

I think it's fairly safe to assume that the general public, when spending of £50 billion on disabled people is mentioned, think that people like Ellen and Cherylee are in receipt of all this. I don't think they would imagine that when MPs talk about spending on disabled people it includes the social care received by their frail and elderly parents and grandparents. But in the government's definition, it does.

In a Freedom of Information request in 2013, the government was asked how the figure of £50billion spending on 'support and benefits for disabled people' was calculated. The answer revealed that £22.9 billion went to the two benefits for disabled people below retirement age, who may or may not be working.

Of this, Employment and Support Allowance(ESA), for people unifit to work, comprised £6.5 billion. It's worth pointing out however that two thirds of a person's ESA payment consists of the equivalent to Jobseeker's Allowance, which they would receive if they were fit to work and looking for a job, so it is highly debatable whether this should even be regarded as disability spending. And of course, recent changes mean that in future, people unfit to work but placed in the Work Related Activity Group of ESA will receive only the equivalent to Jobseekers Allowance.

There were several smaller spending categories, like, 'facilities for disabled people', but of the remainder, £15 billion went to adult social care, and £5.6 billion to Attendance Allowance for people aged over 65. Now we know from a National Audit Office report that 68% of the users of adult social care are over 65. So we can see that when MPs talk about spending on disabled people, much of the budget goes to elderly people past retirement age.

In one sense, this very broad definition is frustrating, because it gives the impression that younger disabled people are receiving more generous support than they are. But in another sense, it is positive. If this is how the government defines disability spending, then disabled people cannot easily be portrayed as a minority group consuming more than their fair share of financial resources, which is sometimes the inference. By this definition, 'disabled people' are simply 'us'. What the government refers to as 'spending on disabled people' is in fact a budget that most of us will at some stage need to draw on, if we live long enough.

Also, to talk about spending increases in cash terms, or even real terms adjusted for inflation, is quite misleading. What we should be thinking about, if we are thinking in terms of fairness, is what share of our GDP , or national wealth, we decide to allocate to certain areas or groups, and whether it meets the actual need.

In a 2015 study of the benefits paid to people unable to work, the Institute for Fiscal Studies said, 'Public spending forecasts for these disability benefits in 2018–2019 project them to be at their lowest level as a share of national income since the late 1960s.' This was before the £30 per week cut to ESA for future claimants in the Work Related Activity Group.

And this, let us remember, is in the context of an ageing workforce, with workers retiring later, and thus more likely to become ill or disabled before retirement age. So whilst we may be spending more in cash terms, the support for individual disabled people is effectively falling. Regarding the generosity of benefits for people unable to work, the IFS says,'The value of UK disability benefits relative to earnings peaked in the late 1970s at around 25 percent of average earnings....Since the early 1980s, UK disability benefits have been raised in line with prices; this led the value of these benefits to fall to around 15 percent of average earnings..'

Another thing the government likes to do is make international comparisons, to say 'we are spending more than Germany' or whatever other country they choose to name. But this can be misleading. The way spending is defined and calculated in each country is different, so direct comparisons are difficult. But according to the OECD Social Expenditure Database,  the UK is just at the OECD average of 'public spending for social purposes', below countries like Germany, France, Belgium and Austria, but above countries like Mexico or Estonia.

And to put welfare spending in general into context - after the 2016 Budget, the Office for Budget Responsibility found that, 'the government is on track by 2020-21 to spend the lowest amount on welfare, as a percentage of GDP, in 30 years.'   This is hardly the out of control, unsustainable welfare spending constantly cited by MPs to justify cuts.




© Bernadette Meaden has written about political, religious and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is an Ekklesia associate and regular contributor. You can follow her on Twitter: @BernaMeaden

Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.