Why Mr Duncan-Smith's figures on incapacity benefits don't stack up.
Mr Duncan-Smith has been making a mess of his statistics, with all sorts of ludicrous claims such as working tax credit rising by 58% between 2003 and 2005 when in fact it increased in line with inflation so that over the two years it increased by 8%. It brings into question the accuracy of other figures used by the Department for Work and Pensions (DWP).
One such figure is the estimate of the numbers receiving incapacity benefit who should not really be eligible. Those IDS considers to be receiving benefit but who should not be. There are 2.6 million people of working age claiming incapacity benefit, 8.5% of the total adult workforce, at an annual cost of £12.5 billion. The stakes are high. The DWP estimate that 30 % of these claimants are not genuinely eligible which if correct would give a potential saving of £2.24 billion annually. But where does the estimate come from?
The estimate comes from two pilot projects in Aberdeen and Burnley which showed that of 1347 decisions made, 399 (29.6%) were found 'fit for work'. Mr Duncan-Smith has made a great deal of this estimate, but how robust is it? The answer is probably not very accurate at all. A simple calculation shows us why.
We know that some 40% of assessments that go to appeal are being reversed. This brings into question the DWP's estimate of 30% from their pilot projects. If we assume that a similar percentage would be reversed on appeal, then this would reduce substantially the estimate of the numbers ineligible for benefit. My calculation from the figures given by the DWP is that the estimate at best falls to 18%. But it also brings into question the way in which the assessments are being made and also the criteria used. It is clear something is awry with the assessments if such a high percentage are being overturned on appeal.
In short, the system being imposed is discredited. It is discredited on the numbers and it is discredited by the yardsticks of fairness, competency and ethics. Many of the decisions appear to be cruel and arbitrary and take little account of the real circumstances of the claimant. Mr Duncan-Smith would have a better case if he used better estimates and if he had a system that would be transparently fair. But he does not.
The Anonymouse in his comment below correctly points out that the figure of 48% reversal on appeal changes to 78% or higher if appeals are made through the CAB. Using that percentage my calculation blasts the DWP estimates completely out of the ball park.