The Government announced measures on Extra Costs payments, employment support, and disability sport in today’s annual budget. In this blog we look at the impact this will have on disabled people’s lives.
Lower economic growth figures and tax revenues meant the Chancellor announced today further public spending reductions of £3.5 billion by 2020.
Given that certain areas – such as health, schools and international aid – are ring fenced, this means that unprotected areas of Government spending will see further reductions.
Extra Costs and PIP
Today the Chancellor confirmed changes to Personal Independence Payment (PIP) assessments which will affect 640,000 people and aims to save £1.2billion.
Scope research shows that disabled people spend an average of £550 a month on the extra costs of being disabled.
Extra cost payments – Disability Living Allowance and PIP – make a vital contribution in covering these costs – currently £360 a month on average.
The PIP assessment changes, announced last week, will see some disabled people receive a reduced rate of PIP, and others not qualify. This comes following a reduction to Employment and Support Allowance for unemployed disabled people from April 2017, as announced in the Government’s Welfare Reform and Work Bill.
Scope hears from disabled people every day who are struggling with their finances and who are having problems getting the support they need. We are concerned at how these changes will impact on disabled people’s ability to make ends meet and save for their futures.
Disabled people already have less financial resilience than non-disabled people, with an average of £108,000 less in savings and assets. 49% of disabled people use credit cards or loans to pay for everyday items including clothing and food.
In announcing measures for young people to save, the Chancellor called his budget one for the ‘next generation’. With disabled people more likely to be out of work, or in lower paid jobs, disabled people are less likely to have money left over at the end of the month. This means that the Chancellor’s new saving incentives will be out of reach for many disabled people.
It is also vital that the Government tackles the extra costs of disability at source. The work of the independent Extra Costs Commission (ECC), which Scope facilitated, sets out the measures that business, regulators and Government can take to do this.
In particular, given the Chancellor’s announcement of an increase in the standard rate of insurance premium tax of 0.5%, we would like to see the Chancellor back the ECC’s recommendation of an investigation into whether disabled people are able to access affordable insurance.
The ECC found at least half a million disabled people have been turned down for insurance, and this increase in insurance costs threatens to exacerbate this problem further still.
The Chancellor also announced a new, slimmed down money guidance body, replacing the Money Advice Service (MAS). This new body will be charged with identifying gaps in the financial guidance market, and commissioning providers to fill these gaps. Scope worked closely with the MAS to provide information and advice for disabled people on money and debt. You can still access this advice on our website.
The Chancellor’s statement comes on the same day as the latest labour market statistics show a fall in unemployment, leading to the highest ever employment figures.
However, the disability unemployment gap has proved to be resistant to wider improvement in the employment rate. The gap between the rate of employment amongst disabled and non- disabled people has remained stubbornly static at 30% for around a decade.
Although the Chancellor didn’t mention it in the House of Commons, we were pleased to see the Government’s Budget Red Book confirm that later this year the government will publish a White Paper. This will focus on the roles that the health, care and welfare sectors can play in supporting disabled people and those with health conditions to get into and stay in work.
In particular, the Red Book states that the Government has accepted the recommendations of a taskforce on how to provide £330 million of additional funding for disabled claimants. This will include a new, tailored peer support offer to offered shared experiences and support to disabled people, and bespoke employment support. While this is welcome, it is important that this support is available to all disabled people who need support to find work and contribute to closing the disability employment gap.
We look forward to seeing what other measures on specialist employment support the Government will introduce through its forthcoming Employment, Disability and Health White Paper. Tailored support for disabled people is vital to overcoming the structural barriers to employment that disabled people face.
In the run up to this year’s Rio Paralympic Games, the Chancellor also confirmed in the Red Book a £1.5m NHS programme to provide activity prosthetics for children and fund new research. This will include a £500,000 fund for new child sports prosthetics to allow 500 children to participate in sport.
Scope welcomes this measure, particularly following our analysis that found over 4 in 10 (42%) parents of disabled children reported their children cannot access a local sports club.
If you have any questions or concerns about the changes made to your support, please call Scope’s Helpline on 0808 800 3333.