Saturday, 9 January 2016

Wrong Measurement

From the Independent

The Government is spending more money assessing whether people are fit to work than it is saving in reductions to the benefits bill, a damning official report has revealed

The study by the National Audit Office (NAO) found that the Department for Work and Pensions is handing over £1.6bn over the next three years to private contractors who carry out the controversial health and disability assessments. 

But at the same time, the Government’s own financial watchdog has warned that savings in benefits payments are likely to be less than a billion pounds by 2020 as a result of the new tests. 

Yes, and the police cost far more to run than the seizures of crime. That's not the point. The police, insurance fraud officers, the internal investigations departments of banks and benefits assessors are there to act as a deterrent to people taking the piss. That without them, you'll get more crime, fraud etc.

In 2011, the total cost of Incapacity Benefit to the UK was £13bn per year. 37% of people abandoned their claims during the process. That's not that assessors turned them down. They either saw the letter and knew the game was up, or during the process realised that their pisstaking wasn't going to work. That's about £5bn quid we used to spend that we didn't need to. And more than anything, that's why you spend ~£550m per year on assessors. Because if you don't, a lot of people will take the piss.

Note 1: I'm not saying the assessment system is perfect. I'm sure it mishandles some cases, and maybe it should err more towards paying people. But when 37% of claimants give up, you clearly need an assessment system as a deterrent

Note 2: Not blaming any colour of party here. Both used IB to massage unemployment figures.

Note 3: Yes, the assessors are probably expensive because government pay for it and have no idea how to do this stuff for a sensible cost, but they're still getting a good deal.


Random said...

"Yes, the assessors are probably expensive because government pay for it and have no idea how to do this stuff for a sensible cost, but they're still getting a good deal."

What are they planning on doing with the people instead? Admin is a decent paid public sector job with a good pension for lots of low-level clerical workers.

Kind of amusing that progressive types want to reduce the income of poor people and generate a shitload of unnecessary resentment.

"Because if you don't, a lot of people will take the piss."

Don't tell the lefties that. Check out what R. Murphy has to say:

"There is one problem with Mosler’s idea

We pay tax voluntarily

The idea that force is required is only to deal with those who deviate from the norm – as is the case with all punishment for behaviour that voluntary action deems deviant in society"

- See more at:


Mark Wadsworth said...

"the police cost far more to run than the seizures of crime. That's not the point…"

Agreed.Compare the cost with the cost of crimes not committed in the first place.

(I think the Tory war on welfare claimants is completely misguided, but that's a separate topic.)

The Stigler said...

My monthly donation to the local air ambulance, something that was provided previously by the state is me volunteering to pay a tax.

Outside of the whole "CI works better", there's always a sensible point with these things, where the savings just aren't worth it for either the downsides (deserving people suffer/costs of operations).

I generally agree with you, but clearly, stopping people taking the piss is sensible. When 30~% of claimants don't even go through the process, it wasn't just wrong at the edges and didn't even go into party vindictiveness, but was genuinely broken.

On the other hand, I think the "bedroom tax" is a genuinely bad policy. I like it in principle and it's supposed to address an old problem of people staying in council houses after the kids leave home, but the problem is, it's not very practical. If there isn't a 2 bed house for a couple in a 3 bed to move to, you're not achieving the objective. You're just punishing them.

Mark Wadsworth said...

TS, on the particular topic of IB, that was a fraudster's charter from the start. As you say, they only invented it to mask unemployment figures and many claimants are taking the piss - the gimmick used to be that not only do you get more than income support, you also used to get less hassle to find a job.

So far better to align the rates for income support etc (a few amid a week higher) and IB (a few quid week lower) and have done with it. Which is of course a step towards CI...

Having a separate system for the one per cent of people who are genuinely severely disabled is a separate topic, that's a medical thing not a general welfare thing, I have no views on that one way or another.
The 'bedroom tax' is nonsense, as it just looks at number of bedrooms and not their value.

People in low rent areas with an extra bedroom aren't really depriving anybody of much, but somebody in central London with a spare bedroom is clearly benefitting to the tune of £10,000 a year or something.

If done correctly, the 'bedroom tax', social rents and LVT would all be merged into one system i.e. LVT.

Lola said...

And then there are the people like me who, were they employed by the State could have wangled a whole load of subsidies were they so inclined, but don't (for whatever reason).
I have come across quite a few piss takers in my life all of whom were less 'disabled' than I am...

Of course, in the mad world, I do recognise that I am the bloody idiot.