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Disability and Employment in Scotland: A Review of the Evidence Base

CHAPTER TWO: DISABLED PEOPLE AND EMPLOYMENT POLICY AND LEGISLATION: THE UK CONTEXT

INTRODUCTION

2.1 As noted in Chapter 1, Scotland's policies on employment and disability cannot be understood unless they are placed in the wider UK context. The report therefore reviews key UK developments before considering their implications for Scotland. This chapter looks at the UK government's employment and benefits policies for disabled people including incapacity benefits, the New Deal for Disabled People, other benefits, tax credits and incentives, the Disability Discrimination Act and the National Minimum Wage.

THE UK GOVERNMENT'S EMPLOYMENT AND BENEFITS POLICY FOR DISABLED PEOPLE

2.2 The UK Government's strategy to achieve social inclusion and tackle poverty is based to a large extent on encouraging greater labour market participation. In relation to disabled people, this can be problematic since, for some people, work may be impossible or very difficult as a result of an impairment, social barriers, discrimination, lack of confidence or skills and/or lack of jobs. As is evident from the following review of key policy documents, in encouraging disabled people into employment, the balance to be struck between coercion and incentivisation is delicate. There is always a danger that the pendulum may swing too far in the direction of encouraging employment, with the danger that insufficient attention is paid to the adequacy of benefits.

2.3 Over the past decade, in all industrialised societies there have been growing concerns about the number of workers leaving the labour market as a result of illness or disability and becoming permanent claimants of disability benefits (Mashaw et al., 1996; Thornton, 1998; BSRM, 2000; Bloch & Prins, 2001; Van Oorschot and Hvinden, 2000). Governments regularly express concerns about early exit from the labour market by middle aged and older workers, and question whether high levels of expenditure on disability benefits can be maintained. There are debates about the best way of reducing the number of disability benefit claimants, and the balance to be struck between incentivising work and making disability benefits less accessible. In addition, the extent to which the state or the employer should bear responsibility for rehabilitation and retention of disabled workers has also been debated.

'INCAPACITY BENEFITS'

2.4 In Great Britain the number of people claiming incapacity-related benefits has trebled over the past twenty years (House of Commons Work and Pensions Committee 2003a, 2003b). 'Incapacity benefits' is a generic term, used throughout the report, which covers Incapacity Benefit, Income Support (on the grounds of incapacity) and Severe Disablement Allowance. The number of people claiming incapacity benefits stands at 2.7 million and involves an expenditure of 16 billion pounds a year. By way of contrast, the number of people claiming Jobseekers Allowance (JSA) has fallen. In November 2002 there were 872,000 JSA claimants, at a cost of 4 billion. Incapacity benefit claimants are unlikely to move back onto JSA or into work: about 45% of incapacity benefit claimants have been on the benefit for five years or more, whereas between November 2001 and November 2002 there was a fall of 11.3% in the number of people claiming JSA for more than a year (House of Commons Work and Pensions Committee 2003a).

2.5 In May 2003, disabled claimants made up over 60% of the total benefits caseload (Stanley and Regan, 2003). Table 2.1 shows the proportion of the working age population claiming out of work benefits in 2003:

Source: Stanley and Regan, (2003)

2.6 It shows that 8.7% of the working age population were claiming at least one disability-related benefit, out of 14.1% of the total working age population who were claiming some form of benefits. According to the Labour Force Survey, which provides labour market information for GB, only about half of people with long-term ill-health or disability are in employment. People are classed as 'economically inactive' if they are either not looking for work, would be unable to take up a job if they were offered one or because they do not want to work. One million of those who are economically inactive have said they would actually like to work (Stanley and Regan, 2003). This has led the government to refer to the 'missing million' and to seek ways of enabling these 'discouraged workers' to re-enter the labour market. However, as argued by Burchardt (2003), disabled people are particularly vulnerable to social exclusion, so that they are one of the first groups to lose employment when there is a downturn in the economy. Even during periods of economic growth, disabled people's position in the labour market often remains tenuous as employers are more likely to recruit non-disabled people.

2.7 There has been particular concern about the geographical concentration of economic inactivity in former mining areas, inner cities and some coastal towns. In such areas of Britain, up to a third of working age men, usually with few or no academic qualifications, are likely to be economically inactive. Many of these men are claimants of incapacity benefits and are therefore classified as disabled rather than unemployed. Table 2.2 presents data on the top 20 districts in GB in terms of proportions of male incapacity benefit claimants.

Source: Beatty, Fothergill, Gore and Green (2002)

2.8 Beatty and Fothergill (1999, 2003) argued that, in terms of their personal and social characteristics, incapacity benefit claimants were very similar to those classified as unemployed. They suggested that the high numbers of incapacity benefit claimants in areas of industrial decline may to some extent have reflected a deliberate policy in the 1980s to encourage people to claim incapacity benefit rather than register as unemployed in order to mask the true rate of unemployment. Beatty et al (2000) are the major proponents of the thesis that incapacity benefit claimants represent hidden unemployment. They have argued that official unemployment statistics conceal the true rate of unemployment in areas of industrial decline such as Clydeside, South Wales and the North East. This has negative outcomes for these regions, because they miss out on the allocation of European Structural Funds which are based on the ILO definition of unemployment. Other implications are embedded in the theory of hidden unemployment, in particular the suggestion that incapacity benefit claimants are not 'really' disabled, but are simply using their benefit status to claim a higher rate of support and to avoid pressure to seek employment. The report of the House of Commons Work and Pensions Committee (2003a, 2003b) and the TUC report on disability, work and poverty (2003) considered these arguments. Both reports emphasised that government investigations indicated a very low level of fraud in relation to incapacity benefit claims. Both reports supported greater efforts to support disabled people in moving from benefits to work, including far more emphasis on job retention, greater investment in rehabilitation and more financial support for people attempting to move from benefits into work. Indeed, the TUC report proposed that the Government should commit itself to the ambitious target of achieving a 60% employment rate for disabled people, rather than its present commitment to 'a significant reduction' in economic inactivity of this group. The idea that disabled people should be compelled to seek work was rejected by both reports.

2.9 There are clearly stark contrasts in the percentage of working age people claiming incapacity benefits in different parts of GB as shown by Table 2.3 (although it should be noted that the figures are subject to seasonal variations). The table suggests a strong association between the vibrancy of the local economy and the number of working age people claiming incapacity benefits. Conversely, the employment rates of people with a long term limiting illness or disability also vary greatly by region/country.

Source: National Statistics, Client Group Analysis, May 2003 and Labour Force Survey Summer 2002

2.10 There are evidently particular issues for Scotland with regard to the percentage of the working age population claiming incapacity benefit and the proportion of long-term disabled adults in employment. There is also considerable local variation within Scotland: Table 2.2 showed that three districts in Scotland (Glasgow, Inverclyde and North Lanarkshire) had particularly high numbers of male incapacity benefit claimants. Local economic development activity and research activity in Scotland has begun to address these issues (see Chapter 4), although, until relatively recently, the focus was on getting the unemployed rather than long-term disabled people into work.

2.11 There is a strong association between disability, worklessness and poverty as indicated by Table 2.4:

Source: Households Below Average Income 1994/5 2001/2, DWP 2003, Table 5.7

2.12 The risk of poverty is clearly associated with employment status and as Table 2.5 shows, households containing disabled people are far more likely to be workless:

Source: calculated using data from Smith, A and Twomey, B, Labour Market Trends, August 2002, Table 8

Table 2.6 shows the quintile distribution of household income for working age adults by disability and clearly shows that families with one or more disabled adults are likely to be poorer.

Source: Households Below Average Income, 1994/5 - 2001/2, DWP, 2003, table 5.1.

1998 GREEN PAPER NEW AMBITIONS FOR OUR COUNTRY: A NEW CONTRACT FOR WELFARE

2.13 The 1998 Green Paper (New Ambitions for our Country: a New Contract for Welfare) (Department of Social Security, 1998) set out the UK Government's position on social security and employment, recognising the links between the two. The central thrust of policy was to provide 'work for those who can, security for those who cannot'. In relation to disabled people, policy aims included introducing effective civil rights for disabled people; removing the barriers to work and providing active help to disabled people who wished to work; fundamentally reforming Incapacity Benefit for future claimants; and ensuring the welfare system recognised the extra costs faced by disabled people (Department of Social Security, 1998: 51).

2.14 As a result of one of the recommendations of the 1998 Green Paper, the Employment Service and the Benefits Agency were combined, followed by an amalgamation of Jobcentres and Social Security offices. The first 56 'Pathfinder' officers were established between October 2001 and January 2002 in 17 cluster areas, in order to demonstrate the new service, culture and organisation of Jobcentre Plus. Further Jobcentre Plus offices were opened in October 2002 and the network will be complete by 2006. The style of the new offices was intended to be radically different from the old Jobcentres, creating a comfortable and welcoming environment where claimants could get expert advice on benefits and employment issues from a personal adviser. Attendance at an initial 'work focussed interview' (WFI) was mandatory. Benefits claims were not processed until the claimant had attended the WFI, unless the interview was deferred or waived at the discretion of the personal adviser. In most offices, personal advisers dealt with a wide range of benefits rather than specialising in particular types of benefit claim. Government-sponsored research on the Jobcentre Plus Pathfinders and on ONE, which piloted the work-focussed approach, found that personal advisers failed to engage with incapacity benefits claimants, primarily through lack of confidence in their ability to talk about work with disabled people and those with long-term health problems. There were inconsistencies in approach between different areas and greater difficulty with some types of impairment than others. The DWP therefore adopted a specialist approach in its Pathways to Work pilots for new incapacity benefits claimants (also known as the incapacity benefit pilots, see below and Chapter 5 for further discussion).

2002 GREEN PAPER PATHWAYS TO WORK: HELPING DISABLED PEOPLE INTO EMPLOYMENT

2.15 The 2002 Green Paper (DWP, 2002a) developed government thinking in relation to the problem of the growth of incapacity benefits claimants. It was noted that the degree of impairment of some people claiming incapacity benefits was less than that of many people in employment. About two thirds of people claiming incapacity benefits had mental or behavioural, musculo-skeletal or heart, circulatory or respiratory disorders, referred to in the 2002 Green Paper as 'less severe health problems' (see Table 2.7). By way of contrast, amongst the most severe conditions, 0.7 per cent of incapacity benefit recipients have had a stroke, 0.2% have tetraplegia and 0.9% have multiple sclerosis. For the majority of incapacity benefit claimants, it was argued, barriers to employment were significant, but were more likely to concern negative employer attitudes, low levels of skill and qualifications and lack of confidence than individual impairment.

Source: Department for Work and Pensions (2002a) Pathways to Work: Helping Disabled People into Employment

2.16 It was also argued that the New Deal for Disabled People (which is discussed below) had been much less effective than other New Deal programmes (DWP, 2002a), although, unlike the New Deal for 18 - 24 year olds, for example, participation in the NDDP was voluntary. Whereas the number of incapacity benefit claimants continued to grow, representing about 7.5% of the working age population, the number of claimants of JSA and income support for lone parents fell. Since July 2001, 28,000 people had joined the NDDP and just over 6,000 had gained a job. A number of measures to move new incapacity benefits claimants back into employment were proposed for piloting in six Jobcentre Plus districts, beginning in October 2003. The pilots extended the WFI approach (see above) and made it compulsory to attend a number of work-related interviews with a personal adviser, with a compulsory action plan. The only people exempt from the compulsory WFI and the Personal Capability Assessment were those deemed to have such serious health problems or impairments that it would not be reasonable to expect them to work. The measures to assist incapacity benefit claimants back into employment included the following:

• More skilled support from specialist disability advisers and help to return to work combined with action planning during the early stages of a claim; ⁵

• Easier access to the specialist employment programmes plus new work-focused rehabilitation programmes, offered jointly by Jobcentre Plus and local NHS providers;

• Financial incentives for incapacity benefits recipients to seek work and move into some form of employment;

• Specialist adviser support for people having to move from incapacity benefits to Jobseeker's Allowance;

• Efforts to encourage employers, trades unions and the insurance industry to keep people attached to the labour market.

2.17 The 2002 Green Paper also reviewed initiatives aimed at tackling discrimination in the workplace, including the extension of the DDA to small employers and exempt occupations (including the police and barristers) from 2004 (the DDA is discussed later in this chapter). A commitment was made to introduce a duty on public bodies to promote equality of opportunity for disabled people, to be introduced in a new Disability Bill.

2.18 It should be noted that the 2002 Green Paper had little to say about the duties of employers and the measures which needed to be taken to ensure that they did not discriminate against disabled people. The focus was rather on the responsibilities of the individual disabled person, viewed in isolation from their social context.

THE NEW DEAL FOR DISABLED PEOPLE (NDDP)

2.19 The New Deal for Disabled People Programme (NDDP), introduced in 1998, was the main employment programme for people in receipt of a disability or incapacity-related benefit, and was an important part of the Government's welfare to work strategy. Launched as a joint initiative between the Department of Social Security and the Department for Education and Employment (DfEE), the objectives of the programme were:

• to assist disabled people with impairments or a health condition who wish to work to do so;

• to help those already in work to retain employment; and

• through local partnerships, to promote the abilities of people with long-term health problems and to extend the range of services available to them.

2.20 Compared with some of the other New Deal programmes, such as the New Deal for Lone Parents, the Government's approach was cautious and various versions of the programme were piloted and evaluated before the Job Broker scheme was finally rolled out nationally in June 2001. The NDDP was targeted mainly at people of working age, 16 to 59/64 years, in receipt of incapacity-related benefits. Participation was voluntary and there were no benefits penalties for not taking part. The targeting of incapacity benefit claimants was unusual because until this time, people on long-term incapacity benefits had been assumed to be incapable of working.

2.21 Two variants of the NDDP were piloted and operated between September 1998 and June 2001: the Personal Adviser Service (PAS) and the Innovative Schemes. In the 12 PAS pilot areas, a personal adviser assisted people claiming incapacity benefits to find and retain employment. Each project had a project manager and a team of personal advisers, whose job it was to undertake an initial interview with the disabled person and subsequently to organise appropriate services to improve the person's employability and place them in work.

2.22 In July 2001, the NDDP was extended, since policy makers wanted to test on a national scale further measures to help people on incapacity benefits move into work. Following a competitive tendering process, 60 Job Brokers from the not-for-profit, private and public sectors were commissioned to deliver the national extension to the NDDP. Some Job Brokers had expertise in relation to a specific impairment group, whilst others were generalists. Each Job Broker covered a particular geographical area and people wanting to participate in the programme had to register with a specific Job Broker.

2.23 Evaluations of the NDDP drew attention to the very low participation rates across the various schemes. For example, between September 1998 and November 2000, only 2.3% of those invited to join the Personal Adviser Service volunteered to join the programme (Stafford, 2005 forthcoming). Although Job Brokers are empowered to help anyone on incapacity benefits, participants differed from non-participants in that they had generally been on incapacity benefit for a relatively short period of time. The Innovative Schemes also had low uptake rates, and evaluations suggested that this might be due to fear of losing benefits.

2.24 Despite the fact that NDDP participants tended to be closer to the labour market than other incapacity benefit claimants, evaluations suggested that initial job outcomes were disappointing. The original target for the national extensions of the NDDP was 90,000 job entries over three years (Employment Service, 2000). It was hoped that comparisons could be made between 'experimental' and 'control' groups, but for a range of technical reasons these comparisons were not possible. Outcomes may be summarised thus:

• In June 2003, 39% of participants in the first round of Innovation Schemes and 26% of those in the second round had moved into work (Hills et al, 2001)

• By November 2000, 26% of participants (4,800) in PAS areas had moved into employment (Loumidis et al, 2001)

• Between July 2001 and September 2002, there were 27,850 registrations with Job Brokers, of whom 22% (6,099) had moved into employment including 1,400 to sustained employment (DWP, 2003b).

2.25 Whilst some of the NDDP pilots and evaluations took place in Scotland, Scottish data were not disaggregated and separate reports on the impact of the programme in Scotland were not produced.

2.26 Although the NDDP started slowly the scheme is now proving more successful in helping move people on incapacity benefit back into work. As a result of low participation, the government decided to make a work focused interview (WFI) compulsory for people making a new claim for an incapacity benefit (and existing claimants where Jobcentre Plus had replaced the separate Jobcentre and social security offices). When conducting WFIs for new and repeat claimants, personal advisers were instructed to give people information about the NDDP and the job brokering services on offer. Participation in the NDDP was not a condition of benefits receipt, unlike the situation for 18 - 24 year olds, and there was no suggestion that disabled claimants be required to look for work. Nonetheless, the aim of the WFI was to make disabled people think seriously about the possibility of finding a job. The Trades Union Congress, in its publication Setting New Goals: Disabled People, Work and Poverty (TUC Economic and Social Affairs Department, 2003) indicated its support for WFIs because:

…we agree with the Government about the advantages for disabled people of getting jobs, and requiring people to talk about whether employment is right for them is not unreasonable. But we would not like to take this approach further. The OECD, for instance, has urged governments to 'introduce a new obligation for disabled people, including a requirement to look for work, for those who are capable.' We would oppose this. (TUC Economic and Social Affairs Department, 2003: 16)

2.27 In line with the social model of disability, the TUC argued that disabled people should be able to work if barriers were removed. However, there was widespread evidence of discrimination, and until further civil rights had been won, it was unreasonable to expect those experiencing pain and fatigue as a result of sickness or injury to seek work. The TUC also noted that future debates were likely to focus on which citizens should be obliged to seek work, a particularly complex issue for those at the margins.

2.28 Following a review of Jobcentre Plus services, 'Building on the New Deal (BoND): Local Solutions Meeting Individual Needs' was published in June 2004 (DWP, 2004). The report stated that there would be a national framework of rights and responsibilities and greater local flexibility, devolution and discretion. The essence of more flexible policies is that Jobcentre Plus should adopt a menu of provision from which help can be selected based upon customer need. There will be fewer rules on eligibility, programme length and mix with scope for local variation and innovation. Personal advisers will be able to make available to customers elements within a modular menu of provision, irrespective of the benefit they receive. The new service is being tested in prototype districts from October 2005, prior to national implementation.

BENEFITS, TAX CREDITS AND WORK INCENTIVES

2.29 The House of Commons Work and Pensions Committee (House of Commons, 2003) summarised the work incentive measures within the benefits system which have been implemented at the same time as the NDDP to maximise its benefits.

2.30 The Pathways to Work Green Paper outlined plans to create a Return to Work (RTW) credit aimed at helping incapacity benefit claimants cope with the financial disruption of moving back into employment. The RTW credit involves a 40 per week payment being made to incapacity benefit claimants returning to work if they are earning less than 15,000 per year. The credit is paid for 52 weeks.

2.31 The earnings disregard allows people claiming incapacity benefits to earn up to 20 a week for an unlimited period. Under new Permitted Work rules, incapacity benefit claimants are allowed to earn 67.50 a week for 26 weeks.

2.32 Eligibility for tax credits, including the new Working Tax Credit, is dependent on working a minimum of 16 hours per week. It has been suggested by disability organisations that, since many disabled people work less than 16 hours, there would be greater financial incentives to work if the minimum number of hours was reduced to 12 hours per week, allowing more people to qualify for Working Tax Credit.

2.33 The 52 week linking rule states that incapacity benefit claimants who start a job are permitted to move back onto Incapacity Benefit without having to be reassessed if the job breaks down within a year. It is necessary to register within a month if an individual wishes to seek benefits protection under the 52 week linking rule, and disability organisations see this as an unnecessary bureaucratic hurdle.

2.34 Finally, the Committee noted that a disabled person who starts a job may fear the loss of Disability Living Allowance (DLA) and Housing Benefits. Obtaining employment may trigger a review of DLA and Housing Benefits are means tested. It was recommended that these benefits should be protected for a period of time to allow the individual to adapt to their new financial situation in work.

2.35 In assessing the impact of the NDDP, work incentives and disincentives embedded within the benefits system have to be taken into account. Many research studies, including Riddell, Banks and Wilson, (2001), indicate that incapacity benefit claimants perceive that the financial risks associated with moving into work outweigh the potential benefits, particularly when the jobs available may be relatively low paid.

THE DISABILITY DISCRIMINATION ACT (DDA) 1995

2.36 As noted earlier, part of the Government's strategy to encourage disabled people into the labour market was through the extension of their civil rights. The post-war quota system placed a duty on large employers to ensure that 3% of their workforce was disabled. The quota system was unpopular with employers and disabled people and was not enforced effectively (Riddell and Banks, 2005 forthcoming). In 1995, it was replaced by the Disability Discrimination Act (DDA). Part 2 of the DDA made discrimination against disabled people in employment unlawful. Discrimination is defined as less favourable treatment delivered to a disabled person from that which a non-disabled person might expect to receive or the failure to make a reasonable adjustment. Employers must not discriminate in the following areas:

• Recruitment and retention of employees

• Promotion and transfers

• Training and development

• The dismissal process.

2.37 The employment provisions of the DDA did not initially apply to members of the armed forces; prison officers; fire-fighters; employees working wholly or mainly outwith Great Britain; employees on board ships, aircraft or hovercraft; police officers. From April 2004, the Act was extended to cover business partners, prison and police officers, fire-fighters, barristers, local councillors and those working on board aircraft, hovercraft or ships. The navy, military and air force are still not covered by the DDA. Since October 2004, small businesses are no longer exempt from the Act. The forthcoming Disability Bill is likely to place a duty on public sector bodies to positively promote equality for disabled people in line with the Race Relations Amendment Act 2002.

2.38 Meager and Hurstfield (2005 forthcoming) provided an overview of the impact of the DDA, drawing on a number of earlier pieces of research (Meager et al 1999; Leverton, 2002 and Hurstfield et al 2004). They found that there had been a steady increase in the number of cases taken under the employment provisions of the Act since its inception:

• 1997: 115 cases per month

• 1998: 187 cases per month

• 1999: 244 cases per month

• 2000 (first 8 months) : 292 cases per month.

• 2000/01: 386 cases per month

• 2001/02: 439 cases per month

• 2002/03: 442 cases per month.

2.39 In terms of types of cases the findings of the various evaluations reviewed by Meager included:

• About 61% of DDA applicants are men; with men more likely to take recruitment cases and women reasonable adjustment cases (men and women are equally likely to take dismissal cases).

• A third of cases involve a claim that an employer failed to make a reasonable adjustment and this proportion has tended to increase over time; about one in six cases relates to 'other detriment', such as victimization; only 8.9% of cases relate to recruitment (this may be to do with a greater difficulty in meeting the burden of proof in this area, for example, it may be difficult to get evidence from the employer about other candidates interviewed and it is relatively easy for an employer to argue that another candidate was more suitable for the job).

• The most common impairments among applicants in DDA cases are: 'problems connected with the back or neck', 'depression, bad nerves or anxiety', and 'problems associated with the arms or hands' (this pattern is similar to cases brought under the Americans with Disabilities Act in the first five years).

• A relatively high proportion of cases were brought against public sector employers, almost certainly as a result of greater awareness of the DDA in this sector rather than higher levels of discrimination.

• Half of DDA cases involve a claim under one or more jurisdictions of employment law, most commonly unfair dismissal which accounts for two thirds of all cases brought under the DDA (case study work by Meager and colleagues indicated that legal advisers often suggested that a DDA claim should be made alongside an unfair dismissal claim if sickness absence was involved).

2.40 The success rate of DDA cases is very low. The vast majority of DDA cases are settled or withdrawn before a tribunal hearing. The chances of winning a case appear to be linked to the presence of legal representation or a legal adviser. The Phase 1 monitoring study indicated that 15.9% of cases which went to tribunal were successful (i.e. decided in favour of the applicant). By the time of the Phase 2 monitoring study, the success rate had risen to 19.5%, but the number of cases withdrawn before going to tribunal had risen. In the Phase 1 study, Meager and colleagues conducted a multivariate analysis to identify which factors were associated with a case being successful. After controlling for all other features of the case, the analysis suggested that the following factors were important:

• The nature of the applicant's impairment (applicants with physical/mobility difficulties were most likely to succeed; those with sensory impairments or impairments relating to internal organs were least likely to succeed)

• Legal representation of the applicant

• Legal representation of the respondent (applicants were more likely to win if the respondent was represented by an in-house lawyer, rather than from outwith the employing organization)

• The sector and occupation of the job relevant to the case (cases brought against respondents in manufacturing, primary construction and 'other services' were most likely to succeed at tribunal; cases involving managerial and professional occupations had a higher success rate than those involving unskilled or skilled manual occupations).

2.41 Qualitative work reported by Meager and Hurstfield (2005, forthcoming) provided some insight into the experience of being involved in a DDA case. For both employer and applicant the process was highly stressful and costly. The burden of having to prove that a person was disabled under the terms of the Act meant that many cases were dismissed, and this was a particular issue for people with mental health problems, who had to prove that they had a 'clinically well-recognised condition'. The focus on normal day-to-day activities was problematic, with disputes over whether work counted as such an activity. There was confusion over how progressive conditions should be treated. Furthermore, the notion of 'justification' in the DDA posed difficulties. The DDA defines discrimination as less favourable treatment for a reason related to a disability which cannot be justified, or a failure to make a reasonable adjustment which cannot be justified. It differs in this respect from other anti-discrimination legislation, such as that relating to sex or race, where the notion of justified discrimination does not exist. Both applicants and respondents were confused by the concept of justified discrimination.

2.42 Meager and Hurstfield (2005, forthcoming) also analysed Labour Force Survey data to investigate the extent to which the DDA had improved the employment rate of disabled people. Normally, someone is considered to be disabled if:

• They say that they have a work-limiting health problem or disability (i.e. one which limits the kind or amount of paid work they might do); and/or

• They say they have a current disability in the sense of the DDA, i.e. a health problem or disability which substantially limits their ability to carry out normal day-to-day activities.

2.43 The Government and the DRC prefer to look at all long-term disabled people. However, Meager suggests, there may be some merit in having a separate focus on people who have a work-limiting illness, on the grounds that if reasonable adjustments were made, more of this group would be in employment.

2.44 Table 2.8 summarises trends in employment rates between 1998 and 2002 for Great Britain. The table shows that, in relation to all long-term disabled people, there was a small increase in the employment rate of disabled people (from 45.1 to 48.8%). In relation to the employment rate of those having a work-limiting disability, the improvement was less impressive (from 38.1 to 40.1% over the same period). It is hard, of course, to know to what extent these changes can be attributed to the impact of the DDA, since many other factors, including the NDDP, need to be taken into account.

Sources: Labour Force Survey: calculations based on data reported in: Disability Rights Commission Quarterly Disability Briefings (May 2000 to Oct 2002) and DfEE Quarterly Disability Briefings (Nov 1998 to May 2002)

2.45 It is also important to look at evidence of changes in employers' attitudes. The findings from a number of Government-funded surveys are summarized in Goldstone and Meager (2002) and indicate that there is no clear evidence of a growth in employer awareness of the DDA in general, and the employment provisions in particular, over the period since the Act came into force in 1996. The studies, however, suggest there has been a change in employers' practices since the early to mid-1990s, which is consistent with a growing awareness of disability issues.

In particular:

• There has been a growth in the proportion of employers with formal written policies on the employment of disabled people.

• The proportion of employers reporting that they actively encourage the employment of disabled people, while remaining a minority (at around one in five employers) has also increased during the period (although such growth occurred mainly in the 1990s).

• In line with these changes, the proportion of employers who report that they have disabled employees has also risen (this may reflect a greater awareness of employees' disabilities, or a real increase in the number of disabled people employed). In the most recent reviews, about two thirds of establishments reported having some disabled employees.

• A growing proportion of employers are making adaptations or adjustments on behalf of those employees.

2.46 Overall, the majority of commentators suggest that the DDA has achieved some degree of success. Gooding (2000) indicated that the Act was of great symbolic importance for disabled people, whilst noting difficulties in relation to the definition of disability, the notion of reasonable adjustment and the justifications of less favourable treatment. She noted that the Act will only be successful if backed up by a powerful collective movement and if the ambition of producing fairer outcomes, rather than equal opportunities, remains the over-riding goal.

2.47 Other writers have been less positive. Floyd (2003) maintained that the Americans with Disabilities Act 1990 was more ambitious and effective for a number of reasons. The ADA defines an individual as disabled if s/he:

• Has a physical or mental impairment that substantially limits one or more of the major life activities

• Has a record of such an impairment

• Is regarded as having such an impairment.

2.48 According to Floyd, the ADA had a greater impact because it was backed up from the start by an Equal Employment Opportunities Commission and other regulatory bodies. In addition, a well resourced and highly professionalised vocational rehabilitation service meant that disabled people had greater support in accessing the labour market. However, it is possible that the picture on the other side of the Atlantic is not as rosy as it might first appear. Studies of the impact of the ADA suggest that its implementation has not been smooth (see, for example, Goss et al 2000; DeLeire, 2000; Lee, 2003; Acemoglu and Angrist, 2001; Kruse and Schur, 2003). These studies indicate that, as in the case of the DDA, problems have arisen in relation to definitions of disability and reasonable accommodation, the extent to which different groups are able to use the legislation and the low success rate of cases brought. In addition, it appears to have had only a minimal impact on the labour market participation rates of disabled people, with a decrease in the employment of disabled men in the two years following its implementation.

2.49 As with the NDDP, there has been no separate evaluation of the impact of the DDA on the employment experiences of disabled people in Scotland.

THE IMPACT OF THE NATIONAL MINIMUM WAGE (NMW)

2.50 The National Minimum Wage (NMW) was introduced in April 1999 as part of the UK Government's commitment to tackling poverty. It was introduced across the whole of the UK and all employees were covered with the exception of those under the age of 18. The introductory level was very low (3.60 an hour) and since disabled people are often paid very low wages, there were hopes that they would benefit from the legislation. At the same time, it was feared that employers might decide to replace disabled people with non-disabled workers, on the grounds that the latter would cost the same to employ and might be able to do certain jobs more efficiently. Burchardt and McKnight (2003) analysed the impact of the NMW and found that employment retention rates improved for low paid disabled workers over the period of the NMW's introduction, although low paid disabled men tended to reduce their hours of work. This might be part of a longer term trend, and not directly attributable to the NMW. Exempting disabled people from the NMW would therefore have a negative effect. Schneider et al (2001) also found that paid hours of work of disabled people had been reduced, without an increase in overall earnings. Longer term studies are necessary to chart the impact of the NMW on disabled people over time, and again disaggregated Scottish data are required.

CONCLUSIONS

2.51 This chapter looked at employment and benefits policies for disabled people in the UK. Some of the main findings of the chapter are:

• Over the past ten years, during a period characterised by a healthy and stable economy, the number of people claiming Incapacity Benefit has increased significantly while the number of people claiming other out of work benefits has fallen. The number of people claiming incapacity benefits greatly outnumbers the number claiming JSA and other out of work benefits.

• Concern about the high proportions of incapacity benefit claimants in certain geographical areas (including Glasgow, Inverclyde and North Lanarkshire in Scotland) has led to debate about levels of so called 'hidden unemployment'.

• There is clearly a link between disability, employment status and poverty which warrants further investigation.

• Evaluations of the various phases of the NDDP indicated that participants' experiences of programmes were generally positive, but low numbers of incapacity benefit claimants participated. Successful outcomes in terms of sustained employment were initially low but more recent evaluations have suggested an improvement in outcomes.

• Positive measures to boost the civil rights of disabled people through the DDA appear to have had modest, rather than spectacular, success. There have been increases in the number of DDA cases over time but success rates remain low.

• There have been no evaluations of the impact of the DDA or NMW for Scotland.

2.52 Chapter 3 examines statistics on the labour market participation of disabled people in Scotland.

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