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This report uses statistics provided by the Department for Work and Pensions Information Centre. The focus in this article is on results for the Lancashire area, but details for other parts of the country can be found by going to the DWP Statistics page and using the Tabulation tool. The government site also contains full details of entitlement requirements for these two benefits in the A-Z list of services. The small area ward figures for November 2007 were not available on the website at the time of writing this article. They were instead obtained via the NOMIS Labour Market Statistics website.

Difference between Claimants and Beneficiaries

It is important to note that there are significant differences between the number of claimants and the number of beneficiaries to Incapacity Benefit, whereas for Severe Disablement Allowance, the variation between the two is negligible. Table 3 emphasises the differences between claimants and beneficiaries down to the district level, whilst the ward information only measures the numbers of claimants.

Incapacity Benefit

Incapacity Benefit replaced Sickness Benefit and Invalidity Benefit in April 1995. It is paid to people who are assessed as being incapable of work and who meet certain contribution conditions.

There are three rates of Incapacity Benefit. There are two short-term rates; the lower rate is paid for the first 28 weeks of sickness and the higher rate for weeks 29 to 52. The long-term rate applies to people who have been sick for more than a year. The higher short-term rate and the long-term rate are treated as taxable income. Please see the DWP website for further details on entitlement.

The Economic Significance of Incapacity Benefit Figures in the North West

In February 2004, the Deputy Prime Minister invited the three Northern Regional Development Agencies to show how the North could unlock the potential for faster economic growth and bridge the £29 billion output gap between the North and the rest of the UK. The overarching measure of success will be to achieve national UK average Gross Value Added per head for the combined area within 25 years.

The strategy for how to achieve this overall target is contained in the Northern Way First Growth Strategy report. One of the aims of the report was to bring 100,000 people currently off incapacity benefit into work by 2014, but it is not clear if the target refers to the levels of claimants or beneficiaries.

Any changes to the numbers of people claiming IB may be as a result of people re-entering the labour market, but could also be down to changes in entitlement rules or people switching from IB to other benefits as their circumstances change. Anyone moving off IB cannot automatically be assumed to be going back into paid work. More in-depth research would be needed to obtain an accurate picture of the reasons why people no longer receive IB (see Figure 1 for recent trends in claimants).

Severe Disablement Allowance

From April 2001 there have been no new claims to Severe Disablement Allowance. From this date, claimants under the age of 20 (or 25 if receiving training or education) may become entitled to Incapacity Benefit.

The National and Lancashire Perspectives

Table 3 details the caseload numbers for Incapacity Benefit and Severe Disablement Allowance for Great Britain, the North West, the Lancashire County Council 12-district area (excludes Blackburn with Darwen and Blackpool unitary authorities) and the Districts. Nationally, the caseload was just under 2.7 million in November 2007, which represented a -1.1% yearly decline. Over the same period, the North West saw a decrease of -2.1% to 408,220, whilst in the Lancashire County Council area, the number in November 2007 amounted to 59,910 or -1.9% less than a year earlier.

At the local area level, Blackpool unitary authority recorded by far the largest number (11,470) whilst Blackburn with Darwen recorded the second highest figure (9.980). At the other extreme, the rural Ribble Valley District recorded a caseload of just 1,810.

The average weekly claim at the national level for those receiving payment (excludes non-recipients from the denominator) was £86.47, whilst for the North West the figure was slightly higher at £87.24. For the Lancashire County Council area, the average was £86.85. At the district level, the highest average payment was in Pendle (£89.01) followed by Burnley with £88.24.

Figure 1 Incapacity Benefit and Severe Disablement Allowance Claimants, November 2000 to November 2007

Source Department for Work and Pensions

Given the economic significance attached to getting people off benefits and back in to work, it is worth considering the number of claimants to these two benefits over a longer time period than just one year even after accepting that changes may be the result of a variety of administrative or other factors. Figure 1, presents yearly results from November 2000 to November 2007. The numbers for November 2000 are given a value of 100 and subsequent years are measured in relation to the base figure. Initially, there was a pattern of increases at the county and national levels, but all three rates recorded a noticeable downward trend from 2004 onwards.

The North West has seen the largest percentage reduction in claimants with the Lancashire County Council area reduction being somewhat less pronounced, but ahead of the national rate of decline.

Leaving the Unemployment Claimant Count to Receive Incapacity Benefit

Our unemployment section contains a table that details the reasons people give for leaving the unemployment claimant count. One of these is to claim Incapacity Benefit instead. The results for January 2008 reveal that for the broader 14-authority Lancashire area that includes Blackburn with Darwen and Blackpool unitary authorities, only 110 of the 3,425 that left the claimant count in that particular month stated that they were leaving to claim Incapacity Benefit. Given the significant numbers in the 'Not known' and 'Failed to sign' categories, it is likely that the actual figure may be higher.

Ward Level Data

Table 4 highlights the fact that at the ward level, seven wards within the Blackpool unitary authority are within the top 20 wards in the broader 14-authority Lancashire area for the highest numbers of claimants to these two benefits. Two of the Blackpool wards, Claremont and Bloomfield, recorded over 1,000 claimants each; figures noticeably in excess of any of the other wards in the county.

Within the Lancashire County Council area, which excludes the two unitary authorities, Ribbleton Ward in Preston recorded the highest number of total claimants with 745.

The distribution of the number of claimants across wards in the broader Lancashire area is displayed in Figure 2. Concentrations of wards with high percentages are particularly apparent in central Blackpool, Preston and Blackburn.

Figure 2 Incapacity Benefit and Severe Disablement Allowance Claims, Lancashire Wards, November 2007

Source Department for Work and Pensions

Please note that the following contact person can only respond to queries about the figures used in this report. He cannot answer enquiries about how to claim either of these benefits or any other concerns about individual claims.

For further details, or if you have any ideas for improving the content of this article, please contact:
Bryan Moulding
Tel 01772 534172
Email Bryan.Moulding@lancashire.gov.uk