10 May 2017

The WCA: Whose fault is it anyway?

Charlotte writes:*

Between December 2011 and February 2014, 2.380 people in the UK died after a work capability assessment (WCA) found they were fit for work, hence ending their employment and support allowance (ESA). ESA is the main benefit for the long-term sick and disabled in the UK. If a claimant’s ESA is discontinued after being found fit for work, they will either receive jobseeker’s allowance, or no benefit at all. Many disabled people rely on ESA to pay for necessities, and the ineffectiveness of the WCA is toying with their potential standard of living. Although overseen by the Department for Work and Pensions (DWP), the WCA is administered by private firms who earn huge sums of taxpayers’ money, therefore benefitting from continuing to carry out these controversial disability assessments.

The British government - whilst supposedly ‘watching the watchmen’ (i.e. the private firms) - is actually legitimising the private firms’ actions through continuing to use outsource providers. Outsourced providers also allow the government to place blame on the firms and their shortcomings, meaning that less attention is paid to the WCA being ineffective - despite the Assessment itself being the root cause of the problems. However, regardless of attempts to shift the blame, the facts speak for themselves. Atos, one well-known contractor, chose to withdraw from a contract worth millions of pounds due to the damage the WCA was causing to the firm’s reputation. If such a lucrative deal can be outweighed by this, it is clear that there is a serious situation at hand. The numerous protests in the UK against contractors such as Atos only further illustrate this point.

Regardless of whether private firms should be able to capitalise on the suffering of others, it is clear from both individual stories and aggregated data that, with regard to the WCA, contractors simply don’t do the job to decent standards. The focus is wrongly on getting the assessments done quickly, rather than making the right decisions. There is a clear quality/ quantity trade-off here. However, unlike most situations where those adversely affected cannot easily challenge the company, the incorrect decisions regarding the WCA can be directly appealed - an option which many former ESA-claimants have opted for. The appeals process means that the lack of quality in the decisions can actually be challenged and the outcome can be reversed. With this in mind, one would assume that the firms have strong disincentives regarding rushing the job to save money and time, given that more appeals mean increased burdens. Yet so far, this basic logic has not been seen. Perhaps future reforms should involve stronger (dis)incentives for the individual firms, so that there is more pressure to actually do the job right.

In a 3-month period in 2016, 2.000 people were wrongly found fit for work; in June 2016, 56% of appeals were upheld. How can this system be viewed as anywhere near functioning, when over half of its decisions are proved wrong? Not only is this traumatic for those being tested - who run the risk of losing the ESA benefit that they so often rely on for basic needs -, but processing so many appeals means digging deeper into taxpayers’ pockets. So much for the claim [pdf] that the WCA would save loads of money...

So, whose fault is it anyway - the DWP for relying on private firms on such sensitive matters, or the contractors themselves for doing an inadequate job? An independent review suggested 37 changes to the system, 32 of which applied to the DWP. It is surely worrying that a system in place for years still needs so much adaptation. Nevertheless, such reviews highlight the urgent reform needed, as well as the responsibility of the DWP to fix the mess they originally created. It is difficult to claim that the DWP could find a better solution, given the many limitations of counterfactuals. But I would sincerely hope that this is not the best the British government has to offer. With the upcoming snap election, I’ll be interested to see how significant the WCA is in the political arena.

Bottom line: The WCA is an ineffective tool for judging who is (not) fit for work and the DWP and outsourced providers are both somewhat accountable for the many mistakes made. A major overhaul is well overdue; hopefully, the General Election in June 2017 will increase the speed of this process.

* Please comment on these posts by students in my growth & development economics course. It really helps if you highlight unclear analysis, alternative perspectives, better data, etc.

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