How To Reform The ESA System

Simon Duffy argues that the current ESA system is deeply flawed and suggests an alternative based on a better understanding of unemployment.

Author: Simon Duffy

In the UK today disabled people are astonished and affronted by the development of a whole new system that has emerged out of the Department of Work & Pensions (DWP). This system has many parts, but is often referred to by the name of one entitlement that is part of the system - the Employment and Support Allowance (ESA).

The ESA system is failing and is bound to fail. This is not just the fault of the current government. The system was largely designed by the previous government - although this government has made some of its provisions even harsher. 

The system is bound to fail because it is solving the wrong problem in the wrong way. Whitehall cannot solve the problem of unemployment. Whitehall doesn’t even seem to know what the real problem of unemployment is.

What is the real problem of unemployment?

The problem of unemployment is not one problem it is two logically distinct problems:

  1. People need a basic level of income in order to live with dignity. Work is one way to achieve this income, but sometimes people cannot find work to pay them the necessary income or they are unable to work because of sickness or other more important obligations (like taking care of children or a partner who is sick).
  2. People need opportunities to contribute. All human beings need to feel valued and paid work is one important way of making a social contribution - although it is not the most important way. [Being a parent is certainly a more important form of work than any paid job.] Some people (including many disabled people, but not only disabled people) find themselves disadvantaged when it comes to getting paid work and don’t get the same chance to contribute as other people.

In the United Kingdom, which has the most centralised welfare system in the world (after New Zealand) we leave the solution of these two problems to the DWP in Whitehall. And, over the past few years, the DWP has introduced a complex array of inter-linked measures to ‘solve’ these two problems:

  1. Assessment - Increasingly assessments have been moved away from family doctors or from people themselves. Instead assessments have been contracted out to Atos, a private French company, which then applies the Work Capability Assessment. This test is used to divide disabled people between the Support Group (where work is not treated as a realistic prospect) and the Work Related Activity Group (WRAG). If you are put in the WRAG your income is then reduced, despite the fact that there is no evidence that people’s prospects of paid work improves once they’ve been put into this ‘special group’.
  2. Benefits - The system has become progressively less generous, with different benefit levels for Employment Support Allowance (ESA) and Job Seekers Allowance (JSA). Some disabled people, if they pass all the necessary tests, get an income of £106.50 per week, which is just a little lower than a basic state pension. But for many others, including many disabled people, the system is even less generous, with income levels ranging downwards to zero (depending on disability assessment scores, other forms of income, any savings, your family situation and your obedience with any conditions set by the ‘service provider’).
  3. Assistance - Assistance to find work has now been contracted out to large private corporations who are paid according to a complex set of rules that is supposed to guarantee ‘payment by results’. This ‘Work’ Programme also gives providers the capacity to punish people for not doing as they are told or forcing them to work for free (Workfare). The programme has been markedly unsuccessful, particularly for disabled people, of whom only 5% have found work. Employment rates might easily have been higher if no such ‘assistance’ had been provided.

The whole panoply of tests, systems and rules, all with their own weird acronyms, lends an appearance of rationality to the system; but all of this is an illusion. The whole system makes no sense and is based on a deeply flawed understanding of the real world, human motivations and the basic laws of economics. 

There are two obvious flaws:

Work is not an object, it’s a relationship

Being able to find work requires someone willing to offer to provide work. The ability to work is not a property of a person (a capacity or an incapacity, a willingness or an unwillingness) it is the existence (or non-existence) of a relationship between a person with needs, who seeks assistance, and someone with gifts who seeks to express them.

Often such relationships do not involve any money - but when they do they can provide a vital source of income to the person with the desired gifts. We would not want to live in a world where all our needs are met by payments - but in the modern world paid work plays a useful role in helping people meet some of their needs, make a valued contribution and distribute income between each other.

Yet the primary focus of the Work Programme is to make the person ready for employment, as if jobs were things that either exist or don’t exist. The focus is on the person’s capabilities, cv, skills, attitude, appearance etc. The programme does not change the overall level of work available, it simply tries to distribute work opportunities differently. Each time it helps someone who has been unemployed get a job, it deprives someone else of getting the same job. They are not altering the level of paid employment, they are just changing its distribution.

Treating work like an object is bad economics and bad public policy. It is better to think about how society can be organised so that there are more opportunities for relationships of contribution - a richer network of connections, which include paid work. As the Campaign for a Fair Society’s Manifesto states:

We want all people to have the same opportunities – in housing, work, education, leisure and relationships. Then people will be part of their community. They will get the chance to put something in as well as get support.

But access to opportunities, including paid work, cannot be achieved by central government, nor by the private corporations it selects. Instead we need an approach that creates these new opportunities at the local level:

Work is created in communities, not by central government. As Nassim Nicholas Taleb argues:

How could we have the happiest nation in the world, Denmark ...and a monstrously large state? ...The state exists as tax collector, but the money is spent in the communes themselves, directed by the communes - for, say, skills training locally determined as deemed necessary by the community themselves, to respond to private demand for workers. [Nassim Nicholas Taleb, Antifragile, p. 131]

Overly centralised responses to unemployment become bureaucratic and insensitive. Whitehall cannot spot opportunities at the level of the individual or the community. It will continue to fail.

Work doesn’t guarantee a basic income

As parents (especially mothers), carers and many other people who work very hard know, work doesn’t necessarily provide any income at all. Even if people do work for money there is no guarantee that they will be paid enough for a basic income. This is true even when we set minimum wage rates or living wage rates. 

To some people this is surprising, but it is a natural feature of even the most efficient market: the labour market will only clear (i.e. everybody will be in work) with the maximum level of price flexibility. If we impose minimum wage rates then ultimately the market will reach a point where somebody may be willing to work, but nobody is willing to pay the fixed proce. Or, to put this another way, the only way of guaranteeing full employment in a free market is to leave people free to pay wages that may well fall short of anything we may consider acceptable.

Now it is certainly understandable that there are some people who will advocate for flexible labour markets, and who will also pretend that flexible labour markets can also provide enough income for everyone. This may be what some call 'neoliberalism'. However, in reality, even the most intelligent advocates of a flexible labour market will also recognise that the market won’t lift everyone out of poverty. 

For example, one of the most important economists and liberal thinkers of the twentieth century, Friedrich von Hayek takes it for granted that the free market won’t meet everybody’s needs on its own:

We shall again take for granted the availability of a system of public relief which provides a uniform minimum for all instances of proved need, so that no member of the community need be in want of food or shelter. [Friedrich von Hayek, The Constitution of Liberty, p. 300]

It is time to get real and recognise that a decent minimum income must be guaranteed, not by the market, but by the community as a whole. It is for this reason that the Campaign for a Fair Society supports the idea of a basic income, or citizen income, for all:

We need a new system that gives everyone a reasonable income. We need a system that makes it worth getting a job, saving money and getting involved in community life.

We do not want to see more divisions between different groups each hoping to be slightly less impoverished than some other ‘less deserving group’, we want to see the highest reasonable level of basic income, guaranteed for all citizens.

Thoughts on a strategy

Even if we agree that the current system is unfair and needs to change, the challenge is that power lies with people who do not think the current system is unfair. In fact the current system seems to suit the powerful very well:

Today there is no support for more radical thinking, aimed at social justice, within any of the mainstream political parties. This makes the task of resisting injustice very difficult indeed.

However, here are some thoughts about strategy which may prove useful:

  1. Play for big stakes and small - Instead of criticising those who seek to win small victories why not try to have our cake and eat it too. If some can make a compromise, while others hold out for a bigger win, this tension can still be managed if people can still see themselves as part of a larger movement with a larger goal. This requires trust; but it is the most powerful strategy available. This way small victories can feed the energy to fight for bigger victories.
  2. Build the biggest possible alliance - It is tempting to treat this as an issue of disability. But it is also an issue of poverty, disempowerment and centralisation. People on JSA who are not disabled people are also being treated unfairly and they have even fewer people arguing their case. Community groups that have been successful at helping people find work don’t need to be ignored, but embraced. Local government may not always get it right, but only a local system can build better solutions.
  3. Tie their boats together - It is tempting to respond to each separate element of the current crazy system on its own: (1) change the WCA (2) change Atos (3) find a new provider for the Work Programme (4) abandon the WRAG etc. However it is also useful to show the interconnected incoherence of the current system. 

Instead of fighting distinct battles it may be better to limit the DWP's room for manoeuvre by showing people the absurdity of the whole ESA system:

We must follow the path described by G K Chesterton, and focus on revealing the underlying absurdity of things:

Everywhere the man who alters things begins by liking things. And the real explanation of this success of the optimistic reformer, of this failure of the pessimistic reformer, is, after all, an explanation of sufficient simplicity. It is because the optimist can look at wrong not only with indignation, but with a startled indignation. When the pessimist looks at any infamy, it is to him, after all, only a repetition of the infamy of existence. The Court of Chancery is indefensible - like mankind. The Inquisition is abominable - like the universe. But the optimist sees injustice as something discordant and unexpected, and it stings him into action. The pessimist can be enraged at wrong; but only the optimist can be surprised at it. [G K Chesterton, All Things Considered]

Some possible practical solutions

When considering the changes we want to advocate there is little advantage in allowing the other side to dictate the rules of the debate. Ideas need to be bold, clear and attractive - not technical adjustments. Here are some suggested solutions:

  1. Close down the DWP - There is no need for a Department of Work & Pensions. Benefits and taxes should be integrated (in fact this is implicit in Universal Credit) so the function of giving people money and taking money away from people should be left to HMRC. Moreover Whitehall is incapable of creating work in local communities; instead it only seems to give work to companies that take profits out of our communities. Its only role is to treat some people as second class citizens; it is a department whose time is over.
  2. End Newspeak - The current terminology is deceitful and only serves to keep us confused about what a decent system can and cannot do. We need Basic Incomes - not Job Seekers Allowances or Employment and Support Allowances etc.
  3. Focus on Basic Income Guarantee - In the long-run it is the basic income level that is the most important foundation of any decent system. Currently this has been slashed and the changes to indexation mean that it (and other benefits) will now decline in value over time. Disabled people should be lobbying for the most universal system possible with the best possible foundations.
  4. Justify supplements - There is probably an argument for both ensuring a universal income guarantee and for helping people who become sick or disabled at any time with a slightly higher income which could be justified: (a) because they have fallen from a higher income because of sickness or (b) will always find it harder to earn at the same level as others. Insurance models already operate for the better-off on this basis and a nationalised system of insurance supplements may be useful. However it is important this is defined a justifiable supplement to the basic income system - not a different system.
  5. Welcome innovation - There is a strong track record of helping disabled people find work in places like North Lanarkshire Council where they have embraced positive and intentional approaches that treat disabled people as valuable people, with skills and assets and seek to build creative partnerships with local employers. Experts in these approaches should be included in any wider alliance for change.
  6. Support the local - For too long we have demanded that central government solve problems that can only really be tackled at the local level. Over time this has left the local level powerless to make changes, lead innovation or show what is really possible. Seeking an overly-centralised solution for work and employment is ultimately disastrous as the only solutions on offer will be bureaucratic, low-trust, insensitive and disempowering.


The hardest thing for an oppressed groups is to recognise how much it has in common with other oppressed groups. Often it feels like we must pull ourselves out of harm’s way on our own and that we cannot afford to listen to the problems and perspectives of other groups.

Today the temptation to separate ourselves from others is even greater. 

Increasingly the political elites are falling back on the dreadful distinction between ‘the deserving and undeserving poor.’ This helps them blame the poor for poverty and it divides the poor amongst themselves, as different groups seek to distance themselves from the stigma of being amongst the ‘undeserving’. But this disunity will defeat our boldest visions. It turns out that a smaller group of the ‘deserving’ poor will be even less powerful than the poor as a whole.

The publisher is the Centre for Welfare Reform.

How To Reform The ESA System © Simon Duffy 2013.

All Rights Reserved. No part of this paper may be reproduced in any form without permission from the publisher except for the quotation of brief passages in reviews.

Article | 20.10.13

disability, nature & economics, England, Article

Simon Duffy


President of Citizen Network

Simon Duffy


President of Citizen Network

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