Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) (Amendment) Regulations 2026
(1 week, 1 day ago)
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19:20 - Division on Baroness Stedman-Scott’s Motion - Ayes: 64 / Noes: 95 - Motion disagreed.
Baroness Stedman-Scott
That this House regrets that the Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Decisions and Appeals) (Amendment) Regulations 2026 will result in claimants receiving payments without the appropriate reviews having taken place and fail to reduce the overall benefits bill.
Relevant document: 2nd Report from the Secondary Legislation Scrutiny Committee
Baroness Stedman-Scott (Con)
May I start by saying how delighted I am to see the Minister in her place?
My Lords, these regulations make a significant change to the way in which personal independence payment awards are reviewed. They allow the Secretary of State to extend an existing fixed-term PIP award whenever Ministers consider that necessary to safeguard the efficient administration of the benefit. The department’s stated intention is that, for most claimants aged 25 and over, initial awards should generally last four years and subsequent awards six years, with reviews taking place after three and five years respectively. Formerly, according to the department, 77% of awards were made for periods of two years or less. The effect is therefore not simply to prevent awards expiring during an emergency, but to make substantially less frequent reviews the normal approach for a large proportion of the PIP case load. That is why I have tabled this regret Motion.
A properly functioning welfare system must ensure that people receive the right support at the right level and for the right length of time. Reviews should never be treated merely as an attempt to remove support or catch claimants out. They provide an opportunity to establish whether somebody’s needs have remained the same, improved or deteriorated. Indeed, I might say to some of those noble Lords on the Labour Benches that fewer reviews will not only mean that some people whose functional capacity has improved continue to receive an award that no longer reflects their circumstances; it could also mean that people whose conditions have deteriorated remain on an award that is too low.
The Government cannot therefore present this as an entirely claimant-friendly change. Reviews provide protection in both directions. Nor can Ministers simply rely on claimants to report every relevant change themselves. Some people will report changes promptly, but others may not recognise that a gradual improvement in their functional capacity is relevant. Some may not fully understand the reporting requirements. Others may be reluctant to report a change that could reduce their income. The Government’s own statistics underline the danger of placing too much weight on self-reporting. In the financial year ending 2026, the estimated PIP overpayment rate increased from 1.3% to 2.3%, or from £330 million to £660 million. The department found that improvements in functional needs that had not been reported were the largest cause of PIP overpayments, accounting for more than £7 in every £10 overpaid. There were also more than £1 billion-worth of cases in which the claimant had been overpaid following a change in functional needs but was not reasonably expected to have known that the change needed to be reported.
We should also consider the breadth of the power being created. The regulations allow the Secretary of State to extend a fixed-term award whenever the Secretary of State considers it necessary to safeguard the efficient administration of PIP. But what precisely does this mean? I therefore ask the Minister to tell the House the following. What is the maximum period by which an individual award may be extended using this power? Will the department publish the guidance used by decision-makers? Will Ministers publish regular figures showing how many awards have been extended, for how long and for what reason? And will the Government commit to reviewing the operation of this power once the current backlog has been brought under control? Without these safeguards, the instrument risks transforming what is supposedly an emergency administrative power into a permanent alternative to conducting proper reviews.
The Prime Minister has spoken of a more preventive, supportive welfare system that intervenes earlier and helps more people to move forward. Yet these regulations do precisely what the Prime Minister says he wishes to avoid: they are a short-term administrative workaround for a backlog, not a long-term reform.
The Prime Minister also inherits the Timms review, which concluded that the current PIP system is not fit for purpose and requires radical overhaul. That review emphasised the need for assessments that are accurate, timely and rooted in proper evidence. Yet these regulations move in the opposite direction: they make timely reviews less frequent, not more robust; they risk leaving people on awards that are too high or too low for years at a time; and they do nothing to address the underlying drivers of rising caseloads, rising costs and rising error rates. If the Government wish to align themselves with the Prime Minister’s stated principle of a welfare system that is fiscally responsible then they must confront the operational challenges in PIP directly.
The department says that younger claimants are more likely to see improvements in their functional capacity and that prolonged unemployment and inactivity early in life can have lasting scarring effects. It therefore does not want young people whose circumstances have improved to remain on PIP longer than necessary. But that raises an obvious question: why does that principle cease to matter on somebody’s 25th birthday? The Government cannot argue that reviews are important in preventing young people from being trapped in the system while simultaneously arguing that the same principle should carry considerably less weight for everybody else.
A central purpose in the working-age welfare system should be to support those who can work towards employment. PIP is not itself an unemployment benefit, but it sits within a wider health and disability benefits system that must promote independence, recognise changes in circumstances and avoid writing people off. Compassion does not mean abandoning people to years of passive benefit receipt without meaningful contact, support or review.
The Government have claimed that these changes, alongside related reforms to assessment capacity, will reduce spending by £1.9 billion over five years. Will the Minister provide the House with a detailed and clear breakdown of that figure? Can she confirm that an impact assessment has been undertaken and produced?
More fundamentally, when does the department expect the present backlog to be cleared, and what is the long-term plan for restoring sufficient assessment capacity? The Government are responding to a backlog by weakening the mechanism that identifies whether awards remain correct; they are relying more heavily on self-reporting at the very moment when their own statistics show growing losses resulting from improvements in functional needs not being reported; they are granting Ministers a broad power without adequate statutory limits; and they have failed to provide Parliament with full information about how the power will be applied. Above all, these regulations fail to answer the central question facing the Government: how will they bring the welfare bill under control while helping more people towards independence and employment?
For those reasons, I believe that these regulations represent less oversight, weaker accountability and a further retreat from the urgent task of creating a welfare system that is compassionate, accurate, sustainable and focused on helping people fulfil their potential. I beg to move.
Lord Davies of Brixton (Lab)
My Lords, I speak in favour of these regulations. Despite the case made by the noble Baroness, Lady Stedman-Scott, there was much in what she said about the purpose of reviews with which I agree: they are in the interests of the claimants and of the public, in that they fund these payments. They are clearly an important element of the system.
What was not mentioned is the reason for the backlog. Of course, we know about Covid, and that was out of our hands, but the problem with the number of assessments being undertaken at the moment is because of straightforward capacity constraints, which are a result of decisions made by the previous Government: they let contracts with an inadequate number of assessments, whether face to face or online, and they sold off too much of the estate needed for face-to-face assessments, which most people seem to prefer. To complain about the backlog takes a bit of nerve, to be honest, when it is very much their responsibility: it arose on their watch.
I also fundamentally disagree with the weight placed on the significance of these changes. Given the physical situation of the ability to undertake assessments, something needed to be done. There was a problem. It is possible to highlight potential problems with allowing the Secretary of State the discretion, but there was a real problem that needed to be addressed and was causing problems here and now. To me, this is a relatively narrow and sensible change to the process so that the problems faced by individuals could be addressed. It is a problem not so much for the Government and the DWP to undertake these assessments but for the individuals, who were losing their benefits in certain cases and certainly faced extreme concern and worry about their personal situation. That is the problem these regulations are intended to address. Talking about it in administrative terms is all very well, but the pressure and the effect that it had on individual claimants should be our major concern and why these regulations—which, as I say, are narrow—are required.
Here is what the regulations say, just to be clear to new readers. These changes are only required
“to safeguard the efficient administration of personal independence payment”.
You can ask what it means as many times as you like, but it means what it says. The Secretary of State cannot do it for any other reason; it is purely for “the efficient administration”, and we have already established that the assessments are good for both sides of the process.
When the assessment is made, the decision-makers will retain their existing discretion to set longer or shorter periods, including the 10-year light-touch awards when they think this is justified. Nothing in these regulations removes that judgment; they simply make their exercise more flexible, strictly—to repeat the point—for administrative simplicity. The practical case for this is straightforward: we had the backlog, and it needed to be dealt with for the benefit of claimants themselves. It is a fact that, in the worst cases, payments have been interrupted while a reassessment was pending, so I fully support providing the department with this discretion.
It is worth quickly highlighting two safeguards. Individuals have the right of appeal against the lack of an assessment: if they think their circumstances have changed sufficiently to warrant a further assessment, rather than being rolled over, they can make an appeal.
The question was raised about the under-25 year-olds. It is a clear fact, based on the experience of those who are undertaking the assessments, that under a given age there are far more changes in circumstances, and hence more need for reassessment, than in old age. That is simply a fact. It could have been 25, 26 or 24, but an age was practical and sensible.
I recognise that this measure gives the Secretary of State a discretionary power, and hence it is right and proper that we should give it detailed consideration. But this power is needed to extend support, not to curtail it, and it has to be exercised for administrative reasons not because of a change in policy in relation to personal independence payments. For that, we have to await the outcome of the Timms review. Let us not be overoptimistic, but I think that that review is very much heading in the right direction and will address the problems highlighted, as I said, by the failure of the previous Government.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Davies, and to join the, I am sure, widespread view around the House in welcoming the continuing presence of the Minister, the noble Baroness, Lady Sherlock, in her position. Personally, I consider that a delight, even though I am often pushing her on the departmental decisions for which we hold her responsible.
For the second statutory instrument in a row, I find myself thanking the Conservative Benches for securing this debate while disagreeing by 180 degrees with the position they are taking.
Baroness Bennett of Manor Castle (GP)
If Hansard did not catch that, the comment from the Opposition Front Bench was, “What is new?”
I begin by making a very simple point. The way in which the outcomes of the reviews of all the payments we are discussing have been conducted, particularly the personal independence payments, are causing a great deal of unnecessary distress, fear and the wrongful withdrawal of essential benefits. As the noble Lord, Lord Davies, set out, this is a modest, short-term, limited measure. But we cannot discuss this situation without looking at the broader context, which, indeed, is what the Conservative Front Bench did.
I make a call here for realism. We have an ageing population, healthy life expectancy that has declined by two years in the past decade and one in 10 local areas where the healthy life expectancy is less than 55 years. We have a mental health crisis and a lot of focus on benefits for mental health issues. We need to tackle the issues behind that: schools forced to become exam factories; inequality; insecurity; and child poverty. We need to take the focus away from individuals, and trying to crack down on individuals, and acknowledge that we have a societal problem that we need to tackle as a society, and the Government need to tackle as a Government, rather than continually pounding away rhetorically at individuals.
In that context, I do not think there is enough awareness that the Timms review, to which the noble Lord, Lord Davies, referred was given guidance that it had to stick within the currently predicted future spending levels of PIP—and there is talk of reductions. Let us be realistic about this. I refer to the reactions to the Timms review from organisations that would not be considered radical. The British Psychological Society, with which I entirely agree, said:
“Those that apply for PIP should not feel demeaned and deterred from applying”
by the process. We are talking about reviews here, but people get so fearful about the reviews that they just give up. The British Psychological Society also said:
“Everyone who has been signed off with long-term sickness, including those living with a mental health condition, deserves support”.
It rightly points out that, for those with financial difficulties, the stress of reviews can cause further mental ill health. That has to be taken into account. It is awful for the individuals concerned and also very bad for the whole of society.
An organisation with which some in your Lordships’ House may have even more sympathy is the RNIB, which says that PIP assessments and reviews
“fail to properly understand the realities blind and partially sighted people face. Too many are then forced to challenge decisions that are later overturned”.
I finish by referring to a report in the Times last week, which I urge noble Lords to look at if they have not seen it. The Times sat through a full day of a hearing of the social security and child support tribunal at Swindon magistrates’ court. Problems with PIP now make up about two-thirds of that court’s caseload. In the first three months of this year, more than 27,000 PIP decisions were appealed, and 67% of those appeals were successful. For all those who were saying, “Isn’t it terrible that this is being done by remote assessments and these remote assessments may be wrong”, many of them are wrong in a way that the court later finds is clearly detrimental to the individuals who need that support.
I cite one case from that report. Appearing before the tribunal was a 63 year-old retired GP practice manager. He was
“there for his 22-year-old nephew who has a neurological impairment, learning difficulties, epilepsy, a severe tic and Tourette syndrome”,
and had
“loss of mass in his brain on the left side, responsible for language comprehension, analytical skills and controlling the right side of his body”.
A phone assessment took away his benefits. The tribunal took a very brief look at the medical evidence and restored those benefits. We have a huge problem here. This SI will possibly do a little bit of cleaning, tidying and sorting, but there is far more to do.
Baroness Maclean of Redditch (Con)
My Lords, it is a pleasure to follow the noble Baroness, Lady Bennett. I support the regret Motion tabled by my noble friend Lady Stedman-Scott for the reasons that she set out so clearly in her excellent introductory speech. But before I go into that, I too want to say what a delight it is to see the Minister, the noble Baroness, Lady Sherlock, on the Front Bench.
As has been said already, these regulations look like they are just simple administrative regulations. They look like they might be just fixing the backlog and look like they might be benign. Of course, nobody wants vulnerable claimants to lose their entitlements to those really important benefits because the department has not conducted a review on time. But that is not what we are debating here today. What we are, in effect, saying, is that it is acceptable for the Government to respond to a system that is failing by suspending one of the few safeguards that exists within it.
If we all cast our mind back to when the personal independence payment—or PIP—system was introduced, it was never intended to be a benefit that just rolled on indefinitely after it had been awarded. When Parliament debated and agreed the PIP system, the whole point of it was supposed to be based on the fundamental understanding that conditions can change over time and can get worse but can also get better, so you should not just lock somebody into a system of benefits and never look again. That is a fundamentally pessimistic way of looking at human lives.
I listened to the speech by the noble Lord, Lord Davies, and he was obviously very critical of the former Government. I am sure that he is probably right on a lot of those points—I am not an expert so I cannot possibly go back over 14 or 16 years of that history—but, at the end of the day, the current Government have been in power for more than two years, so there must come a point when they now need to take the responsibility for fixing what is currently presenting in the system and looking at the things that have happened on their watch.
If the department does not have the capacity to conduct the reviews, the answer cannot be to abandon them. We need to look at the root cause. Why do we have this backlog? Why do we have so many more claims in the system and this lack of capacity? It is due to the unprecedented rise in the number of people claiming disability and benefits. The growth, as has been said, is particularly striking among younger people claiming on mental health grounds. We have a social security and welfare system that is increasingly being asked to compensate for not just severe disability, which we all agree it should do, but a large and growing number of mental health conditions, such as anxiety, mild depression and ADHD, which would not have been recognised as disabling just a generation ago or even more recently.
Before I came into the Chamber, I saw somebody putting a comparator on X. I do not have the citation, but it is very interesting and I urge the Front Bench and everyone to look at it. The rise in mental health conditions and mental health disability is proportionately much greater in this country compared to about 40 other developed nations. We in the UK are not biologically different or biologically more likely to be disabled because of mental health than people in countries such as France, Germany, Canada, Korea, China, Singapore and so on, so we need to start asking ourselves some of those hard questions. I have spoken in this House on a number of occasions—
Baroness Bennett of Manor Castle (GP)
Does the noble Baroness acknowledge that we should look at our society and ask why we might be suffering from higher levels of those conditions, and why people are not able to find a place in our society, as well as looking at biology?
Baroness Maclean of Redditch (Con)
I am sure the noble Baroness is right, and I thank her for that point. She has posed a very broad question, and I fear I would detain the House for much too long if I tried to answer it with the seriousness it definitely deserves.
I want to touch on a few themes. I have spoken in this House on a number of occasions about what I and a growing number of others regard as the growing medicalisation of ordinary human experiences—just life experiences. We do not do people any favours if we do not distinguish between severe and enduring mental illness, and the very broad spectrum of distress and difficulty that finds its way into our welfare system in one way or another. This is at the root of my worries about these regulations, because every change that reduces scrutiny or delays reassessment sends a signal that says to that person, “Now you are in this system, we expect you to remain there. Just carry on. You are getting the benefits. We have decided that this is the thing that is making your life difficult, and we are going to support you”. It is not saying. “We are looking at you through an optimistic lens about what we can do to help you move off this system”.
Reviews are not just a mechanism for saving money, but that is important. People have mentioned the Timms review, and I am sure it is an excellent piece of work. There are many good points in it. My real worry is that the Minister, when interviewed about this, said that he did not have any worries about the level of welfare spending. That is completely unrealistic; it is fantasy. We should be concerned about the level of welfare spending in this country. It is completely unacceptable, unsustainable, wrong for the taxpayer and wrong for people who are on welfare.
This debate and these regulations risk masking the true scale of the problem. We should be expecting Ministers to explain why they think this is acceptable. It is great that the Minister is here today, but we should be having a much more in-depth debate. We should be asking much bigger questions. Why do we have so many young people, in particular, in this system? Why are we diagnosing them with these mental health conditions that mean they are receiving welfare, PIP and other benefits? Why are we allowing this welfare system to reinforce itself and reinforce a life on benefits for some of these people?
I support my noble friend’s regret Motion, and I will certainly vote for it if she divides the House.
Lord Shinkwin (Con)
My Lords, it is a pleasure to follow my noble friend Lady Maclean of Redditch. I want to take a slightly a bigger picture view to explain why I support the Motion. My greatest fear, as a severely disabled person, is that the overall benefits bill, particularly the cost to the taxpayer of those benefits mentioned in the Motion, becomes so big that the welfare system itself collapses. That would be catastrophic for the most disabled people in our society.
I recently asked the noble Lord, Lord Livermore, what advice the UK Government were giving to the Scottish Government about managing the growing devolved benefits bill in the event of our being at war by 2030, which is what many commentators are saying is likely. In his reply, the noble Lord said that he did not agree with the assumption underlying my question and that while, of course, we must spend more on defence, we must also continue to support those who need that support the most. I say to the Minister, whom I, too, welcome back to her place, that I do not criticise her noble friend for the well-meaning desire underlying his answer, but I also say to her that the current level of benefit spending would not survive contact with the enemy.
One only has to read the fascinating wartime diaries of Chips Channon, edited by my noble friend Lord Blackwater, who is no longer in his place, to realise how much taxes would have to shoot up overnight were we to find ourselves in a wartime situation. It is worth noting that Chips Channon was penning his diaries before the creation of the welfare state and without the crippling backdrop of £3 trillion of national debt and an annual bill of around £130 billion in interest payments. Which one of us could argue that those figures are not astronomical? I do not even know how many noughts there are in a trillion. It is absolutely mind-boggling—so mind-boggling, it might as well be meaningless.
Only, it is not. The situation we have got ourselves into is dire, particularly for disabled people. We fool ourselves if we think that raising taxes in a wartime emergency will be enough; it will not. It will have to be accompanied by an urgent shift of resources to defence—defending our country, of course, but also defending the NHS, the welfare state, national infrastructure and our freedoms. For us to be able to defend them will inevitably involve a recalibration of resources, which is why today’s debate is so important; because right now, not only are we nowhere near being able to fight a war, but we are in denial about the implications for disabled people of our having to do so.
Unless and until we ask ourselves the question as to how we got into this hole—the root cause, as my noble friend has just described it—and how we plan to dig our way out of it, including through appropriate reviews as called for in this Motion, disabled people will remain in grave danger, because it is they who will be most vulnerable to the recalibration of resources that I mentioned.
Yet the answer to that question is, I suggest, relatively simple. Politicians of all persuasions uttered warm words but did not respect disabled people enough to tell them the truth. They implied that the system was too big to fail when, actually, we have allowed it to grow so unsustainably big that it is, I fear, doomed to fail. Indeed, I would argue, in sorrow, in fear and as a stakeholder, that the very viability of the welfare state is threatened by the exponential growth in benefits.
If I respect someone, I level with them. They may not like it, but I will not lie to them just to make my life easier. As we dig ourselves out of this hole, we urgently need to reflect on what respect looks like for disabled people. I suggest that it involves taking a number of practical steps, as well as being straight with them about the scale of the challenge and the fact that there will be casualties of any changes. That is unavoidable, but we can plan now to mitigate the impact on those whose disability means that they depend most on the system. We can take steps to convey respect, build trust and give hope, including combining any recalibration of resources with measures such as ensuring that the existing anti-discrimination legal provisions are upheld and enforced; I will shortly write to the chief executive of the law firm CMS on this very question.
This will also include the Government honouring their manifesto pledge and mandating disability employment and pay gap reporting through the introduction of the equality (race and disability) Bill in this Session. The IoD backs mandatory reporting. The 300-plus signatories to the Disability Employment Charter, the brainchild of Professor Kim Hoque of King’s College London, back it—as does, I am delighted to say, the Business Disability Forum, which today has committed to signing the charter. All that remains is for the Government to do likewise by introducing the Bill in this Session.
Lord Palmer of Childs Hill (LD)
My Lords, we all recognise that the control of public spending matters. It is right that Governments examine whether money is being spent effectively and whether benefits are achieving the purpose for which they are intended, but that must not be the starting point for today’s debate. It is about not simply whether the Government can reduce expenditure but whether the Government can use the system to better and more effectively support those who genuinely rely on it.
I do not recognise the negative views expressed by the noble Baroness, Lady Stedman-Scott, and some of her colleagues. The personal independence payment is a lifeline, not a luxury. It exists because disabled people face additional costs in their everyday lives—costs that most of us never have to think about. It was never designed as simply an employment support payment, yet in practice it often enables disabled people to remain in work, maintain their independence and contribute to society. Surely that is an outcome we should all welcome.
It follows that any changes to the way in which PIP awards are assessed or managed must place the needs of the claimants first. Administrative convenience for the department can never be the overriding objective. The noble Baroness, Lady Bennett, gave examples of appeals, which are probably an example showing that the system does not work. It is about administrative convenience, which should not be the overriding objective. Does the Minister, whom I welcome to her position, agree that the guiding principle should always be ensuring that disabled people receive the support they need, rather than designing processes primarily around departmental efficiency?
I would also welcome some clarity from the Minister on the wider narrative surrounding welfare spending. Much public debate proceeds on the assumption that there has been an unsustainable explosion in the benefits bill—we recognise that—but that is not borne out by the overall figures. Welfare spending amounted to around 10.6% of GDP last year, compared with approximately 12.4% in 2009-10. Although spending on the state pension has increased, this has been accompanied by reductions in the share of spending devoted to working-age and housing benefits.
The real driver of increased expenditure has instead been disability-related support. This reflects a troubling reality, rather than an accounting problem. We have seen growing numbers of people, in particular younger people, experiencing poor mental health and other conditions that require additional support. Those trends should concern us because of what they say about the health of our society, not simply because they affect departmental budgets. What is the Government’s long-term strategy to address these underlying causes? If more people require disability benefits because of deteriorating mental health, delayed treatment, inadequate early intervention or barriers to employment, simply tightening employment cannot be the whole answer. The better approach is to reduce the need for support in the first place by investing in health services, mental health provision, employment support and early intervention. We on these Benches believe that disabled people deserve dignity, security and confidence that the support on which they rely will be there when they need it. We should judge any changes to the benefits system against that standard. I hope the Minister will be able to assure the House that this remains the Government’s guiding principle.
I see no merit in the regret Motion. There is obviously work to be done—I know that the Minister and her department know that—but we must not get away from the underlying principle that when people need support, that support should be there. As the noble Baroness, Lady Bennett, said, we are not talking about going to appeal and winning there; we should be able to deal with this problem at the source. I therefore do not support the regret Motion.
The Minister of State, Department for Work and Pensions (Baroness Sherlock) (Lab)
My Lords, I am grateful to the noble Baroness, Lady Stedman-Scott, for introducing her Motion. I am also grateful to all noble Lords for their contributions, and I appreciate their many kind words. If I had even a moment’s thought that they meant I would get away with anything at all, this debate has made clear that I definitely will not—but I would not expect to. I enjoy our discussions too much, and they are too important, for me to expect to get away with anything.
I am going to do my best, but we have had a pretty broad debate that has taken us from the nature of our society and demographic changes through to Chips Channon’s experience of wartime. I am not convinced that I will manage to cover the whole territory—it is a lot of weight for a relatively small measure to bear—but let me see what I can do.
The measure we are discussing today relates to how we assess eligibility for benefits, but the context of this change does matter. The fact is that the system of sickness and disability benefits that we inherited was simply not fit for purpose. This Government have begun taking steps to address the structural problems. We have legislated to rebalance the support provided in universal credit. The Timms review, which was mentioned, is looking in detail at the way in which the personal independence payment, or PIP, works; its final report is due in the autumn.
In the short term, we need to take steps to help repair the system we have. This measure grants the Secretary of State the ability to extend awards to make the most efficient use of resource. In doing so, it provides a much-needed safeguard against potential future challenges in order to protect payments to vulnerable people. The noble Lord, Lord Palmer, is right that we have to make the right choices about how to use resources; that is key to what we are doing today.
Under the contracts with assessment providers, which were negotiated by the previous Government, the reality is that we can call on only a finite volume of assessment capacity. We could carry on using a large part of that capacity on frequent reassessment of PIP claimants whose circumstances will most likely not have changed, as the previous Government did. However, we want to use that finite resource in a more productive way.
These regulations enable us to administer the system more efficiently and do more work capability reassessments, clearing that backlog and thus delivering savings down the line.
Secondly, we want to increase substantially the proportion of assessments carried out face to face. They used to be pretty much all done face to face; then came the pandemic and, for reasons we all understand, they were switched to being phone-based, with some video assessments. But once the pandemic went, face-to-face assessments were never properly switched back on again. As my noble friend Lord Davies pointed out, telephone was retained as the main channel, with just a few face-to-face assessments starting back in 2021. We just do not think that is good enough.
At the time of the general election, only about 7% of WCAs and PIP assessments were carried out face to face. We want to do better. I take the point made by the noble Baroness, Lady Maclean of Redditch, that we absolutely have to address the problem, so we are going to do that. We have already started to rebuild the capacity. We have begun to increase the proportion of WCAs and PIP assessments carried out face to face, on our way to a target that at least 30% of both will be so. To achieve that, we will need additional assessment resource; this measure will help us to obtain it.
The assessment system simply was not equipped to do the job. There were contractual limits that, at most, 20% of assessments would be done face to face, but the fact is that there was not nearly enough capacity even to do that, so we are having to fix the system to be able to do it. Before this amendment, a decision to extend an award of PIP meant there had to be one of: a new claim; evidence of an error or mistake with the decision; evidence that a claimant’s circumstances had changed; or a report being completed by a healthcare professional appointed by the Secretary of State, which in many cases would involve an assessment.
As my noble friend Lord Davies pointed out, where such a decision could not be taken before an award expired, claimants would simply cease to be entitled to PIP until a further decision was completed. This amendment to the legislation grants a specific discretion, enabling only the length of an award to be extended, and only where doing so is necessary for the administration of the benefit. That protects vulnerable claimants who risk losing entitlement to PIP when circumstances threaten to limit the capacity to administer it. We saw that during the pandemic and we see it now, when assessment supply simply cannot meet demand.
Initially, this Government will use this new power to increase the length of a large number of existing awards in line with the policy on award lengths for new awards, for which the Secretary of State already has the power, and in doing so to improve efficiency and ease the burden on the health assessment system. Existing claimants’ awards will be extended, so that most first-time awards for those over 25 are for three years’ duration and most subsequent awards are for five years. Only awards deemed appropriate for these durations will be extended.
Let me look at some of the questions that have been asked. First, on the size of the benefits bill and the increase, it is worth pointing out that while PIP is going up—there is no question about that—in fact, the rate at which it is going up has fallen under this Government. It fell from around 13% a year for the period 2019-20 to 2024-25 to the current forecast of around 7% a year from 2024-25 to 2029-30. It is still going up, and that is a huge pressure, but the rate of increase has declined and we are working on that. I have explained why we believe this measure will help us to do a better job.
Briefly, in response to the noble Lord, Lord Shinkwin, I cannot get into the whole issue of defence spending and where that takes us for taxation, but we simply do not think it is a zero-sum game between social security and defence—between welfare and warfare. The defence investment plan will provide a significant increase in defence funding and we have set out our targets for increasing defence spending. But our aim for welfare reform is actually designed to help long-term sick and unemployed people to get back to work; that is the game of this.
If I have time later, I will talk a bit more about the Milburn review, but my Secretary of State has looked at what is happening with young people and the very large numbers of them who are economically inactive. He has said, “Look, the system at the moment says to a young person in this situation, ‘What benefits do you need?’, when what we should be asking is, ‘How do we help make your life better? What do you need to turn your life around?’” That may be services or support; it may well be a job, work experience, training or skills. With the Milburn review, we are looking right across that to see how we bring together all that support to give people the opportunities that they really need.
In response to the noble Baroness, Lady Stedman-Scott, this power is limited, as my noble friend Lord Davies said, by considerations such as that it must be necessary for the efficient administration of the benefit. These are strong legal terms and show that it can be used only in limited circumstances where necessary. As I explained, the policy on minimum awards will apply to most claimants aged 25 or over, but exceptions to the policy will be applied to those expected to recover or make significant improvements within a shorter timeframe, who will therefore get a shorter award. Longer review periods can still be made for individuals with the most severe or long-term conditions. We do not want to be having unnecessary reviews; we want to be reviewing the right people. There is no maximum period and the regulations will continue to give longer awards where appropriate, as I said, and shorter ones where necessary.
I was asked: why younger people? Given that spells of unemployment and inactivity at a young age have clear long-term scarring effects, we do not want young people whose functional capacity has improved to be on PIP any longer than necessary. We are therefore not applying the wider policy change or these regulations to young people, who will continue to be assessed as now.
There was a question about whether claimants are going to lose out by this. Obviously, we are absolutely committed and, in response to the noble Lord, Lord Palmer, we want disabled people to have the support they need to live independently. If a claimant’s condition is to deteriorate or improve, they should still report a change of circumstances for their award to be reviewed. Claimants have a duty to report a change of circumstances; that is something they must do. Whether the condition deteriorates or improves, they have a duty to report it. That could result in an award review at that stage, and they can report a change at any time.
The noble Baroness, Lady Bennett, talked about the experience of people in PIP. I can tell from what she said that she has read the Timms review interim report. In the responses to the call for evidence put out by Timms, people told the steering group that while PIP is widely valued, they found the assessment process dehumanising and stressful, and that it causes anxiety. We have heard that very clearly. The review’s interim report sets out what the steering group has found and heard to date. In the next stage, it is going to carry on gathering evidence and engagement while developing and testing recommendations over the coming months. The Government will then have to look at that and make some decisions. It became quite clear that the assessment process is not fit for purpose.
However, we have to make sure that we do all we can to support people who can work to get into work or back to work—and where they cannot work, we must give them the appropriate support. Our job is not simply to focus on getting benefits out. It is also to make sure that, as we are doing now, we invest in the health service, bringing health and employment together so that we can support people. We are taking action, for example, through connect to work to stop people falling out of work when they first get sick, so that we do not end up with them on PIP for long periods in the first place. We are doing all those things.
This change is, none the less, a small but specific and pivotal question that will make a difference to our ability to manage things in the short term. As I have said, it would simply allow us to make more efficient use of limited assessment capacity, reduce assessments where they are not needed, so that we can focus them where they are, and allow PIP awards to be extended in a crisis such as the pandemic. It is a measured amendment to ensure the effective administration of the system.
Finally, I will say a word on young people. We will continue to press into this area. I know that this House as a whole believes we should not be leaving our young people without opportunities; we all agree on that. We have made sure in the past to share information with the House about the important work that the Milburn review has done for its interim review. We are looking forward to having the final report soon. We will make sure the House is informed about that and knows what this Government are doing.
Our job is to get the right support to the right people. Everybody who can work should be given the help and support they need to do it. Those who can work should work; those who cannot work should be supported. The system has to get that right, and this instrument is part of trying to do that.
Baroness Stedman-Scott (Con)
My Lords, I thank all noble Lords who have spoken, and I thank the Minister for her response. I agree completely with the noble Lord, Lord Palmer, that disabled people need to be treated with dignity and respect. On these Benches, we completely sign up to that. My noble friends Lady Maclean and Lord Shinkwin rightly raised the cost of the current welfare system. A welfare system has to be affordable, sustainable and effective. I say this with a heavy heart: it may not worry this Government how high the costs go, but believe you me, it worries the public and it worries us. That does not mean that we would not be prepared to spend money to do the right thing by people. I also agree that the priority is to help people into work. It would be helpful if the Government took action to reduce the cost of employing people, because that has had the single biggest impact on there being no jobs about.
As I have said, I am grateful to all noble Lords who have contributed to this debate, but the central concerns remain the same. These regulations reduce the frequency of reviews, place greater reliance on self-reporting and grant the Secretary of State a broad power without sufficient safeguards or parliamentary oversight. They risk leaving some claimants on the wrong award, whether too high or too low, and do nothing to address the underlying growth in the benefits bill or the urgent need to help more people towards independence and employment. For those reasons, I am not content to withdraw my Motion, and I wish to test the opinion of the House.