Personal Independence Payment and Disability Benefits: Implementation and Impact

Lord Willetts Excerpts

Thursday 29th October 2026 Lords Chamber

[Lord Willetts (Con)]

My Lords, I congratulate my noble friend Lady Jenkin on bringing this important subject to the House and on her important speech, with important facts and statistics within it. As well as welcoming her in leading this debate, I should say a word to welcome the Minister, because I believe that for the noble Baroness, Lady Dacres, this is her first engagement and speech in our Chamber as a Minister. I welcome her to that and look forward to what she is going to say. I have at the end of my speech some particular questions that I hope she may be able to address.

The importance of this issue arises for many reasons. As we have heard from my noble friend and the noble Lord, Lord Davies, the well-being of people who are disabled and claiming PIP is important, but so is the backdrop of a really shocking increase in spending on welfare benefits, which is estimated to rise by £38 billion in real terms between 2026-27 and 2031-32. It is worth reporting the components of that £38 billion increase: £12 billion is for non-pensioner health and disability benefits—what we are debating today—£21 billion, significantly more, is for increases in spending on the state pension, driven above all by the triple lock, and £6 billion is for all other benefit spending. It is absolutely right to look at what we can do to reduce the costs of benefits for disabled people where the money is not having the effect that we hoped, but we should just remember the wider context of where the money is going.

I should declare an interest because I am president of the Resolution Foundation, a think tank. We produced only earlier this month a report, Hard Truths, which is about the whole issue of PIP. It was written by my distinguished colleagues there, Lindsay Judge and Louise Murphy, and I am going to draw on our Resolution Foundation research heavily throughout my remarks.

The estimates of the costs of PIP are of course very significant, perhaps running at £35 billion a year or more. This was absolutely not what PIP was supposed to do; I was serving as a Minister attending Cabinet when PIP was brought in, and I can still remember that it was supposed to be a cost-cutting measure, in contrast to DLA, but claims and costs are surging. There were 36,000 claims a month in 2019 and it is running at 76,000 claims a month this year, so it is right to reform it. However, reform has to be careful and evidence-based. At the Resolution Foundation, we did a survey of 2,500 claimants of PIP to try to understand better exactly what was going on.

PIP, of course, is an unusual benefit. In many ways, it is like child benefit: it does not depend on whether you are working, although it is possible that the way in which PIP functions could be a deterrence or barrier to work. It is not means-tested. The aim is that it covers the costs of some key condition. It is rather like child benefit, which is aimed at covering simply the costs of having children. The difference is that knowing whether you have children is rather easier to ascertain than establishing exactly what your disability is, what the condition is and what the costs are. You could have a condition-based system or a cost-based system.

Perhaps one of the most striking findings in our report at the Resolution Foundation is that 16% of people claiming PIP do not report any costs associated with their condition. However, of those people we surveyed who are receiving it—and the survey was done carefully, so it was a representative sample—47% said that PIP payments helped or enabled them to do economically valuable activities and 82% said that it boosted their well-being. In other words, we should be careful as we try to find ways of saving costs and ensuring it goes only to the people who most need it. It also has some beneficial effects which must not be sacrificed.

There is a lot of talk about particular conditions. Another significant finding from our research was that 56% of claimants of PIP have two or more conditions and there is often a mix of physical and mental conditions. In fact, 30% of recipients seemed to have a combination, 28% seemed to have just a physical condition, and 18% had just what was broadly regarded as a mental condition.

We need to reform it but we need to reform it with care. At Resolution Foundation, the broad outlines of what we propose are, first, a functional assessment. The assessment of what you are capable of doing is currently a very domestic set of tests, and we say that it should be more outward-looking and more focused on what you can do in society and in the economy. We should also look carefully at a breakdown of PIP. There is a case for a capital element: certain costs which are not regular monthly costs but that could be paid for and that, in turn, make a condition more manageable.

I disagree with the point made by the noble Lord, Lord Davies. We think there is some value in accessing services which help functioning and promote participation, including increasing the chances of getting into work. We think it could be useful if PIP were used as a contribution to the cost of receiving these services, and would help tackle the so-called notorious improvement trap. People are worried that, if they report that they are getting better or are helped to get better, this will cause them to lose the benefit entirely.

There needs to be more routine engagement with people on PIP and they should not be left totally disengaged from the system for years on end. We believe that there are some lower level conditions which, given the fiscal environment, should not of themselves lead to an entitlement to PIP. Put all this together, and the package we propose is one that we believe could save £4 billion to £5 billion in PIP.

I turn to specific questions on which I hope the Minister can give us some advice and guidance. The first issue is young people aged 16 to 24. This is a group whose claims for PIP are particularly scrutinised, and there are some who say that they just should not receive PIP—indeed, there are reports in the media that Alan Milburn may say they should not receive PIP at all. It is clear from our research at Resolution Foundation that one-quarter of young people receiving PIP say that they have no costs associated with a disability or no condition. There is absolutely a case for tightening up the regime. However, the other three-quarters say that they have some costs associated with their condition and that PIP enables them—this is relevant to Alan Milburn’s remit—to work, participate in education or volunteer. If there is to be a significant reduction in PIP entitlement for younger people, or it is to be removed entirely in favour of a new means of helping them work or participate in education, what assurances do we have that Alan Milburn’s report will ensure that simply removing PIP from all those young people who are using it—in exactly the way that he would like to get attention and support for to reduce NEETs—does not have the opposite effect from what was intended? For some young people, the risk of being NEET would go up rather than down. Young people matter.

The second point I turn to, and I hope that the Minister will forgive me for this, is education, particularly for young people aged over 16 or 18. This is something to which I attach a lot of value, and the links between education and disability benefits and work are very strong. If you have no qualifications and you are disabled, your chances of being in work are 40% lower than if you have no qualifications and are not disabled. Among people with no qualifications, sadly, the employment penalty for being disabled is severe. For those with a degree and who are disabled, the chance of working is 14% lower than for people who have a degree and are not disabled.

In other words, one of the many values of higher education—I was one of the people who unleashed and fought long battles to get out the evidence on specific pay returns—and some of the wider benefits to higher education are captured here. For people who participate in higher education and are disabled, it gives them a massive chance and opportunity of getting into work. I hope the Minister will assure us that those types of considerations will be very relevant as we look to reform PIP, including for people who have a mental disability. People with a mental illness or mental problem are significantly more likely to be working, despite their condition, if they are graduates than if they are not.

Finally, I put forward two other points to the Minister. Pensioners cannot apply for PIP but they can carry on receiving it. In effect, PIP becomes a lifetime award if you are a pensioner. There is an argument that attendance allowance is better suited to the needs of these people and it has a lower cost than PIP. There are already 700,000 pensioners on PIP. Will the Government consider this as an area for saving and looking at ways in which attendance allowance could be used, because this absolute lifetime caseload of pensioners claiming PIP will grow?

This is my final point to the Minister. The one point on which I disagree with my noble friend Lady Jenkin is that there is a lot of belief in face-to-face assessments. The evidence from our review is that your likelihood of making a successful claim from a face-to-face assessment is 39%, from a video assessment it is 40% and from a phone assessment it is 41%. The big gap is with paper claims, where the chances are 78%. We do not need to focus on particularly expensive face-to-face claims; there are other means as well. I look forward to the Minister’s response to our debate.