February 17, 2011 • 4:22 pm

The publication of the Welfare Reform Bill today marks the start of one of the Government’s flagship policies’ journey towards the statute books.

Unfortunately, much of the debate that these proposed reforms have sparked has been marred by misinformation, and Full Fact has been working hard to correct some of the errors that have found there way into the papers.

This morning, Work and Pensions Secretary Iain Duncan Smith took up his pen to put the case for his Bill to readers of the Telegraph. Can he raise the quality of discussion on welfare reform, or do his claims fall prey to the same mistakes seen in so many of the tabloids? Full Fact took a look.

“Under the last government, 1.4 million people spent almost a decade on such benefits and at least 600,000 young people who left school over the same period have never worked since.”

Both the claims made here take their provenance from separate pieces of ‘ad hoc’ analysis undertaken by the Department for Work and Pensions (DWP).

Using the DWP Longitudinal Study, the Department has calculated that 1.41 million individuals claimed benefits for nine or ten years between 1999 and 2009. This accounted for 13 per cent of the total caseload over this decade.

Of these, 895,000 are accounted for by the three main disability benefits: Employment Support Allowance, Incapacity Benefit and Severe Disability Allowance. The proportion of these claimants who can be expected to return to work has been a topic of some debate, and one that has been the subject of a Full Fact factcheck.

The 600,000 young people that have never worked is a figure that is derived from a piece of ‘ad hoc’ research based on Labour Force Survey data that groups those that have never worked by the year in which they left full-time education.

Amongst those currently classed as having never worked, 100,000 left education between 1997 and 2001, 200,000 left between 2002 and 2006, and 300,000 who have left school since 2007. Totting these up gives you a figure of 600,000, which compares to 500,000 individuals who have never worked having left education before 1997.

Whilst the claim is broadly accurate, there are some caveats that should be noted. Firstly the Office for National Statistics’ (ONS) definition of ‘never worked’ does not account for temporary or casual work, an employment category whose workforce is dominated by young people.

Furthermore the figures do not account for the reasons behind this apparent long-term worklessness. As the DWP research notes, the 600,000 figure should not necessary be conflated with welfare and benefit claimants: “some of these individuals may have disabilities or caring responsibilities, or have partners who work.”

It is also worth noting that for each of the school leaving periods into which the figures have been divided, the total number who have never worked has been rounded to the nearest 100,000. By summing the numbers in the way Mr Duncan Smith has therefore, there is a margin for error of 50 per cent: the true figure could be as low as 300,000 or as high as 900,000, although the DWP has described their figure as a “minimum estimate.”

“Welfare budgets have rocketed and almost two million children are growing up in a household where no one works. Incredibly, the proportion of working-age adults living in poverty is the highest since records began.”

Data on workless households is published by the ONS in its Annual Population Survey reports. In the latest year for which information is available, 2009, there were 1.88 million children recorded as living in a household where no adult worked. Of these, two thirds belong to lone-parent households.

The figure therefore supports Iain Duncan Smith’s assertion that “almost two million” children can be found in these jobless households. Again however, it is worth putting this in some context.

The Annual Population Survey data only gives a snapshot of the number of workless households in a given year (in this case at a point when the UK economy was in recession). Whether or not it gives a full picture of the number of children “growing up” in this environment is therefore more complicated.

Indeed when the DWP looked into the number of children that were growing up in households where no adult has ever worked, it estimated that the figure was closer to 260,000.

However Mr Duncan Smith’s claim that a record proportion of working-age adults are now living in poverty is more difficult.

The most commonly-used definition of poverty in this country is where an individual or household has an income below 60 per cent of the national median wage. This metric is measured in the DWP’s Households Below Average Income (HBAI) report.

At a glance, this may seem to support the Work and Pensions Secretary’s position. In the last financial year covered by the most up-to-date data (2008/09) 16 per cent of households had incomes below 60 per cent of the median before housing costs, and 21 per cent were in that category after housing was accounted for. These levels represent that high-water mark in the time series data, although they have both been reached in previous years.

However as the measure is relative rather than absolute, the HBAI tends to calculate changes in real terms. When looked at in this light, 11 per cent were below the 60 per cent mark before housing costs, whilst 15 per cent were afterwards. This actually represents a drop of 4 percentage points over ten years on both measures, and nearer 10 percentage points since records began.

It is for this reason that the DWP concludes in the HBAI that: “There were marked falls over the period in the percentage and number of working-age adults below various low-income thresholds held constant in real-terms, although there has been little change since 2001/02.”

“Around 50 per cent of those receiving DLA did not have to provide additional evidence to support their claim, and some two thirds of current recipients have an award for life, which means they may never be checked to see if their condition has changed.”

Here, Mr Duncan Smith repeats a set of claims made in the Daily Mail earlier this month, which were the subject of a Full Fact factcheck.

However, whereas the Mail argued that half of Disability Living Allowance (DLA) applicants were not asked to “prove eligibility”, the Secretary of State asserts that the same proportion were not asked for “additional evidence” of their condition.

This is important, as the DWP’s own consultation paper notes, the initial application process involves completing a “lengthy” form concerning the applicant’s impairment, which is considered alongside “supporting material” provided to the DWP.

Whether Mr Duncan Smith is correct or not to claim that half of all applicants weren’t required to submit “additional evidence” therefore depends on whether one interprets this as meaning ‘beyond the initial application’ or not. Either way, it is certainly an improvement on the Mail’s effort.

In stating that “some two thirds of current recipients” of DLA received awards for life, Mr Duncan Smith may actually be underplaying his hand. According to DWP estimates, 2.2 million – or 70.9 per cent – of DLA recipients had awards for life, rather than time-limited awards.

However amongst new applicants, the balance comes down on the opposite side, with two thirds receiving a time-limited award to the third given an indefinite one.

“By reforming crisis loans, we will ensure that the job centre is no longer seen as a “hole in the wall” for those short on cash; by revising eligibility rules, we will ensure that illegal workers can no longer claim contributory benefits.”

These twin claims are again issues that have been widely trailed in the press, and indeed factchecked by Full Fact.

We found on the issue of crisis loans that there was little data demonstrating the scale of abuse, nor much to indicate what the money was being used to purchase.

However qualitative research carried out on behalf of the Department through correspondence with Jobcentre Plus customers found that “there were a small number of customer comments about applicants who misused the Social Fund” with some self-declarations from claimants reporting “partial use of local money to afford luxuries and entertainment that they could not normally afford”.

The issue of illegal workers claiming benefits was also a live one this week, featuring as it did in many of Monday’s headlines.

We found that whilst the Department had made use of IPPR and LSE research to estimate that some 155,000 illegal workers may qualify for welfare payments, there was nothing to suggest that any were exercising this privilege.

Verdict

There can be little doubt that Iain Duncan Smith has avoided many of the problems that are apparent in much of the press reporting of welfare and benefits issues, and he should be commended for doing so.

However some of his claims do need greater contextualisation, and some, such as his assertion on the record proportion of working age adults in poverty, could be misleading without this.

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