Light on carrot, heavy on stick: our reaction to the Autumn Statement

Most of the big announcements in today’s Autumn Statement had been heavily trailed. The closest thing to a rabbit out of the hat was a 2p cut to the main National Insurance rate for employees, rather than just 1p. But below the headlines of the pre-announced changes, some of the detail in the background documents around the speech raise more questions and cause for concern for people with mental health problems.

One area where the rumours thankfully weren’t true was how much benefits would be increased. After speculation that a lower number would be used, it will be a relief to millions of Universal Credit recipients and those on other benefits that payments will go up by 6.7%, keeping pace with inflation. The Chancellor’s speech also confirmed the ‘Back to Work Plan’ the government published last week. That included some good news, particularly the extra funding for NHS Talking Therapies and Individual Placement and Support (IPS, which gives wrap-around employment support to people with more severe mental illnesses).

But the focus in the run-up was on the much more worrying proposals for changes to conditionality, or what’s expected of people in order to keep their full benefit payment. These included a stricter sanctions regime and mandatory work placements. For people receiving benefits because they’re out of work or on a low income, the additional pressure to find work is likely to lead to additional stress and anxiety.

That’s in a population that is already at greater risk of experiencing poor mental health, even if they’re not receiving a payment due to their health. And from a public purse perspective, the underlying documents suggest both the changes to the sanction regime and work placements will cost the government money.

For people who are recognised as having a health condition that limits what work they can do, more detailed changes were announced today. As my colleague Becca set out in more detail recently, the Work Capability Assessment (WCA) is used to gauge whether people are able to work, or if not, how much ‘work-related activity’ – things like writing a CV or completing training – you’re expected to do. 

Back in March, the government proposed abolishing the WCA. The government still plans to get rid of the WCA, although it’s not likely to be completed until the end of the decade. But in the meantime, and from 2025, it plans to change how people being assessed by the WCA for the first time are considered. From a mental health perspective, the biggest change announced today relates to what’s known as the ‘substantial risk criteria’. 

This applies when the WCA judges that someone is fit to prepare or look for work, but would be at substantial risk of harm if required to do so. It’s a vital safety net for people with mental health problems, whose conditions routinely fail to be captured through the WCA. The government now plans to limit the criteria when this safety net applies to “people in crisis and those with active psychotic illness”. It will consult with clinicians to help define those situations and what evidence would be required to prove someone meets the threshold.

Our past research points to a number of problems with this approach. First, acknowledging that the definitions still need to be agreed, ‘people in crisis or with active psychotic illness’ seems likely to miss many people who are nonetheless experiencing serious psychological distress. To take one potential example, we’d be concerned how someone who is severely unwell, or self-harming but not in crisis, would be considered.

Second, the level of stress involved in WCAs currently is a recurring theme when we ask our Research Community about improvements needed in the benefits system. Requiring people to deal with different professionals, advocate for themselves and prove that they present a substantial enough risk seems likely to stack more anxiety and fear onto the process. With the DWP recently having consulted on its approach to safeguarding, this seems set to add to existing concerns.

Third, the Office for Budget Responsibility (OBR) – which checks the government’s numbers and does its own analysis – expects the change in employment from these reforms will be minimal. It expects a fall in the size of the higher-need (and higher-benefit) group of 371,000 by 2089-29 (the end of its forecast period), but just a 10,000 rise in those in employment. It’s worth noting that the more positive measures noted above – more funding for talking therapies and IPS – are each also estimated to boost employment by 10,000. The main achievement is a projected saving of £1 billion, coming mainly from the annual hit of thousands of pounds faced by those in the higher-benefit group.

Fourth, we consistently hear about a lack of understanding of mental health problems when it comes to WCAs as well as the wider DWP workforce. Through a recent Freedom of Information request, we learned that at best only three-fifths of frontline staff have had training on how to identify people’s mental health needs or respond to them appropriately. This is something the government is attempting to address as part of its suicide prevention strategy, but nonetheless points to a gaping hole in current knowledge if a significant minority of staff don’t understand how common symptoms of mental health problems affect us practically. It applies too for people facing an added risk of sanctions or mandatory work placements, with the support alongside those sticks appearing insufficient. 

We’ve set out what we think needs to happen to genuinely support people with mental health problems to prepare for, enter and stay in work. But in the short-term, these plans should be reversed, to reduce the risk of seriously vulnerable people losing out on thousands of pounds.

Ultimately, this Autumn Statement may be remembered for some of the bad news coming from the OBR. It concludes that living standards are set to be 3.5 per cent lower in 2024-25 than their pre-pandemic level – the biggest drop since records began in the 1950s. 

Reversing that terrible big picture view will be difficult, but the government could more easily make changes to protect people with mental health problems and other conditions from the extra living standards hit.