Professor Len Shackleton is an Editorial and Research Fellow at the IEA and Professor of Economics at the University of Buckingham
Publication of Sir Stephen Timms’s interim review of the Personal Independence Payment (PIP) has focused renewed attention on this benefit, now the fastest-growing payout from our ever-expanding welfare state. The amount spent has doubled since the pre-Covid years. Last year we spent £26 billion on the PIP; the figure is expected to rise to £41 billion by 2030. There are currently 3.7 million claimants, with an extra 600,000-700,000 more projected by the end of the decade.
So what’s this benefit for? The PIP is not designed as a substitute for employment income for those out of work, a role played by benefits such as Job Seeker’s Allowance, Employment and Support Allowance, and Universal Credit. PIPs are a non-means-tested benefit which is available for people who face extra living costs because of a disability. Examples given in the Timms report include mobility assistance and extra transport costs, greater energy needs, home adaptations and help with cooking and housework. People can receive up to £10,120 a year, tax-free.
It’s not widely understood that you can get a PIP even if you are working – around a fifth of all working-age recipients are in employment or self-employment. Nevertheless, it is on those who are not working because of incapacity that political attention has concentrated. Media interest has homed in on the growing proportion of PIP claims by people out of work which are based on mental health (primarily depression and anxiety) or neurodevelopmental conditions such as Attention Deficit Hyperactivity Disorder (ADHD).
In April this year 100,000 people – half of them aged 16-24 - were claiming ADHD as their main disabling condition, up from 70,000 when Labour came into office. This is particularly worrying, as we can see a trend here from schools, with between 5 and 7 per cent of children currently estimated to suffer from this disorder.
Many young PIP claimants will be NEETs – not in employment, education or training – and if they don’t get into work within a year or two they are highly likely to be dependent on benefits for the rest of their life. Yet at a crucial stage of their lives, many will find that a tax-free PIP payment added to other benefits may bring their income close to that which could be obtained in a minimum-wage job, a possible reason why claims have grown.
There are many other reasons. COVID is often cited for its lasting impact on both mental and physical health. The rise is also partly down to demographics, with greater numbers of older people, who are more likely to have disability issues, in the working-age population, as the last of the Boomer generation hits their sixties. It’s partly greater awareness via social media of the existence of this benefit, and less reticence to admit mental health problems amongst the young. It may also have something to do with the inability of the NHS to keep up with the growing demand for mental health support at an early stage as problems arise.
The Timms review draws on more than 38,000 responses to a Call for Evidence. It is supposed to be ‘co-produced’ review, according a major role to claimants and those with experience of the PIP system. Timms has concluded that the benefit is “not fit for purpose” - a verdict which seems to be applied to an increasing number of government activities – and “needs fundamental change”.
But what is it that needs to change? Timms is remarkably nonchalant about the amount we are spending on this benefit. He told the Today programme that “the current level of spending is not a great concern”, although he admitted that it would be a problem if expenditure continues to rise. The problem is that the PIPs bill is bound to rise on demographic grounds alone unless something is done to rein in spending.
The complaints that lead Timms to argue that the system needs rethinking would, if addressed, almost certainly lead to further expansion of numbers accessing the benefit.
There appear to have been two persistent themes in the responses to the consultation. One, that the process of claiming is described as “dehumanising”, “degrading”, and “stressful”. Only 5 per cent of respondents were positive about it. Yet, although the process of claiming may appear stressful to claimants, objectively it is almost certainly less so than in the past. Face-to-face assessments were effectively abandoned during COVID and have not resumed: whereas 83 per cent of assessments were conducted in person in 2019, only 5 per cent were face-to-face in 2024.
Assessment over the phone is the most common method, but many claimants now simply fill in a form. Objections seem to centre on the need to provide evidence of the limiting nature of a disability, which is surely a prerequisite for any system which is giving access to considerable amounts of public money, particularly as 38 per cent of claims are now based on psychiatric disorders rather than directly observable physical disabilities.
The other criticism is that the PIP creates a barrier to full participation in work or within the community, as access to the benefit may be threatened if individuals are seen to be able to function to some extent as normal. It is said that this is a particular problem for those with conditions which fluctuate, being tolerable at times but much less so at others. Because the assessment rests on ability consistently to perform, or not perform various functions, some people find it difficult to convey the nature of their needs.
It is difficult to see that these problems could be addressed without adopting a more permissive approach to assessment, which would probably lead both to an increase in the number of successful claims and to an increase in average payments (which are currently scaled according to a points system, which is to be dropped).
The Timms review is dominated by the submissions of claimants and those who speak for them. The press release was garlanded with quotes from pressure groups – Mencap, Parkinson’s UK, Scope, Christians Against Poverty, Sense. None of these would support any attempt to reduce access to benefits for their client groups. Yet there is a strong case for cutting back on benefits, a case ignored in the Timms review.
One is the argument for some form of means-testing. As the Taxpayers’ Alliance points out, the PIP is an unusual benefit in that it is neither means-tested nor contribution-based. As it is taken up by over 190,000 households with an annual income of at least £200,000, it is worth considering whether there is a case for targeting benefits on those in greatest need.
Another concern is with PIP fraud. There have been several well-publicised convictions: Catherine Wieland’s claim to be housebound was destroyed by social media showing her ziplining and surfing in Mexico, while the credibility of Tony Rose’s apparent confinement to a wheelchair was undermined by his adventures on a motorbike. PIP fraud rose sharply in the last financial year to just over £400 million but this may only be a fraction of the total lost.
More fundamental issues relate to legitimate claims. The money awarded is based simply on a rating of the effects of disability on a range of functions such as ability to walk unaided, cook for yourself, wash and dress, communication, budgeting, mixing with other people. But the sums awarded are not based on any estimate of the costs which disability imposes. They relate to the sums offered on previous versions of disability benefits, uprated for inflation.
Apart from the most severe cases of disability where special equipment and regular assistance may be necessary, PIPs probably just act as an addition to household income. There is no need to show that PIP spending is in any way related to offsetting a disability. In many cases it is difficult to see that a 20-year-old whose principal condition is depression faces significant additional spending needs beyond those already covered by other out-of-work benefits.
Few comparable countries operate such a broadly available, non-means-tested cash disability benefit. It is therefore unsurprising that the UK’s spending on disability claims has increased significantly faster than in comparable countries in recent years.
It is evident that there are important questions about the future of PIPs which the Timms review doesn’t consider at all. This may only be an ‘interim’ review, but it seems unlikely from what we have seen so far that the final review will make any serious attempt to bring expenditure under control.
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Wondered how the motorbility scheme blends with PIP, or perhaps it doesn't. I know of a few rackets in that department.