Report by the Comptroller and Auditor General NATIONAL AUDIT EICE

Invalidity Benefit

Ordered by the House of Commons to be printed 13 December 1989 Her Majesty’s Stationery Office, London E4.60 net 91 This report has been prepared under Section 6 of the National Audit Act, 1983 for presentation to the House of Commons in accordance with Section 9 of the Act.

John Bourn Comptroller and Auditor General National Audit Office 11 December 1989

The Comptroller and Auditor General is the head of the National Audit Office employing sxne 900 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies use their resources. Contents

Pages Summary and conclusions 1

Part 1: Introduction 6

Part 2: Growth of Benefit Expenditure 8

Part 3: Role of General Practitioners and the Regional Medical Service in the control process 11

Part 4: Control by Local Offices 16

Appendices 1: Legislation and case law on incapacity for work 21 2: Surveys and samples 22

3: Potential savings from improved control 23 Summary and conclusions

1. Invalidity Benefit is paid to those incapable of work because of long-term sickness. Recipients increased horn 760,000 in 1983-84 to just over one million in 1987-88. The Department of Social Security expect that by 1990-91 there will be 1.3 million people drawing the benefit. Between 1983-84 and 1987-88 expenditure increased from E2.39 billion to E3.15 billion, and is forecast to exceed f4 billion in 1990-91 (all at 1989 prices).

2. Invalidity Benefit is payable under the Social Security Act 1975. It is administered by the Department of Social Security who assess and pay benefit. It is non-taxable. To qualify for the benefit, a claimant must be incapable of work. Once incapacity has lasted seven days the claimant normally provides a doctor’s statement signed by a General Practitioner or hospital doctor, advising the claimant to refrain from work for a specified period. If incapacity has lasted six months and the doctor considers the claimant is unlikely ever to become capable of work, the doctor may advise the claimant to refrain from work until further notice.

3. In each local office of the Department of Social Security claims for benefit, and questions arising in connection with claims, are decided by Adjudication Officers. These individuals are independent statutory authorities appointed by Act of Parliament to determine entitlement to benefit in accordance with Social Security legislation. Claimants obtaining a statement advising them to refrain from work will almost invariably be awarded Invalidity Benefit by the Adjudication Officer in the Department of Social Security local office provided they also have an adequate Contribution record.

4. In England, the Department of Health’s Regional Medical Service, acting as the Department of Social Security’s agents, are responsible for providing Department of Social Security local offices on request with second opinions on the working capacity of claimants who have been issued doctor’s statements advising them to refrain from work or who have been paid benefit on the basis of other evidence. Most of these opinions are provided by part-time medical referees (practising or retired General Practitioners or retired Regional Medical Officers) employed on a sessional basis. The full-time Regional Medical Officers also undertake liaison duties for the Department of Health. This involves discussions with General Practitioners and others involved in the provision of primary health care services on a wide range of issues.

5. In Wales, the Welsh Office provide this service. In Scotland, the Scottish Home and Health Department provide a similar service, but there a higher proportion of examinations are carried out by full-time Regional Medical Officers.

1 6. In the light of the increase in both beneficiaries and expenditure, the National Audit Office examined the control systems operated by the Department of Social Security through their local offices, General Practitioners and the Regional Medical Service. A number of samples and surveys were conducted by the National Audit Office, including a survey of Regional Medical Service part-time referees. In addition, the National Audit Office commissioned Gallup to conduct a survey of General Practitioners. A summary of the Gallup Survey is published separately and is available, price E5, from the Information Centre, National Audit Office, Buckingham Palace Road, London SWlW 9SP.

7. The National Audit Office addressed three main issues: (a) the reasons for the growth in numbers of beneficiaries and expenditure; (b) whether - the Department of Social Security have ensured that General Practitioners are aware of their obligations in signing medical statements; and that - the Health Departments, in conjunction with the Department of Social Security, have ensured that the Regional Medical Service operate efficiently and effectively in providing advice to General Practitioners and second opinions for the Department; (c) whether the control system operated by local offices is being properly and efficiently applied.

Growth in 8. In examining the reasons for the growth in expenditure, the National expenditure Audit Office found that: (a) although benefit conditions have been tightened the numbers receiving Invalidity Benefit are expected to continue to grow (paragraphs 2.2 and 2.3); (b) three principal trends underly the increase in numbers receiving benefit: each year more people come on to the benefit than come off and on average individuals are receiving the benefit longer; the average age of recipients is increasing; and the proportion of married women receiving the benefit is also increasing [paragraphs 2.4 to 2~); (c) research undertaken by the Department, and externally, into the reasons for these trends has identified no major increase in the incidence of incapacitating diseases although there is some evidence that within an unchanged incidence of heart disease there is a longer duration of incapacity because of a decrease in mortality (paragraph 2.9); but (d) the research indicates that non-medical factors, including the increase in unemployment in the early 198Os, are likely to have played a significant part in the growth (paragraphs 2.10 and 2.11).

9. The National Audit Office have found that the growth in expenditure on invalidity benefit reflects an increase both in the number and duration of claims. Evidence suggests that non-medical factors have contributed to this growth rather than any underlying increase in the incidence of sickness.

2 General 10. In examining whether the Departments have ensured that General Practitioners and Practitioners are aware of their obligations in signing statements the Regional Medical National Audit Office found that: Service (a) 38 per cent of the General Practitioners who responded to the survey said they had received no routine training or advice. Despite this complaint about the lack of advice, however, only 19 per cent said they consulted the Department’s guidance handbook which is issued to all General Practitioners. The Department of Health told the National Audit Office that these findings conflicted with their own experience of matters raised by General Practitioners (paragraphs 3.15 to 3.19). (b) despite guidance in the handbook only 47 per cent of the General Practitioners identified as one of their roles the provision of factual evidence on a patient’s fitness for alternative work. This is a matter which General Practitioners are asked to consider after an individual’s incapacity has lasted for six months (paragraph 3.20); (c) in advising a patient whether or not to refrain from work, General Practitioners properly take account of family and social circumstances which might have a bearing on the individual’s medical condition. The Gallup survey found that other factors taken into account included loss of benefit if the statement is refused and the fact that a claimant may have been advised by the Job Centre to seek a statement (but since February 1989 the Department of Employment have, at the request of the Department of Social Security, issued letters to claimants and General Practitioners which make it clear that the General Practitioner is asked to provide advice on the claimant’s fitness for work) (paragraph 3.22).

11. In examining whether the Departments have ensured that the Regional Medical Service operate efficiently and effectively, the National Audit Office found that: (a) uncertainty exists among some of the part-time medical staff of the Service as to their role in the benefit process; the Department of Health attribute this to the different considerations these staff apply in their primary role as General Practitioners (paragraph 3.23); (b) both Divisional Medical Officers and referees were concerned about poor quality reports from some General Practitioners, leading to unnecessary work [paragraph 3.27); (c) in England and Wales the Regional Medical Service have had difficulty in dealing as promptly as they would wish with the increasing number of cases requiring second opinions (paragraphs 4.21 and 4.22); (d) the time taken to process referrals for second opinions is a contributory factor to the overall delay in the cessation of benefit for those claimants whom it is ultimately decided no longer qualify (paragraph 4.29).

12. The National Audit Office have found a degree of uncertainty among General Practitioners and, to a much lesser extent, among part-time

3 INvALnJrTYBENEFrr

referees, about their responsibilities in considering whether or not an individual is capable of work. The National Audit Office conclude that to a significant extent General Practitioners appear to be overlooking the requirement to consider the individual’s capacity for alternative work. General Practitioners also appear to be giving too much weight to family and and social circumstances, although there are occasions when these factors should properly be considered.

13. The National Audit Office believe that a more active input from the Departments and the Regional Medical Service in the form of improved guidance and assistance in more effective training is essential if the uncertainties expressed by General Practitioners are to be reduced. The Department of Health point out that training is a professional matter and that they can only provide more input if invited to do so. The National Audit Office believe that more careful consideration by General Practitioners of the guidance on alternative work, plus the application of the appropriate medical criteria, may be expected to lead to a significant reduction in the number of individuals qualifying for Invalidity Benefit.

14. The National Audit Office are concerned about the inability of the Regional Medical Service to accept all cases for referral at the due date and also the average time taken to process those cases which are referred. They therefore recommend that the Department negotiate with the Regional Medical Service performance standards for the prompt processing of referrals and delivery of medical opinions, having regard to the caseload and availability of resources. The Department of Social Security have set this in hand.

Local Offices 16. In examining whether the control system operated by local offices is being properly and efficiently applied the National Audit Office found that: (a) there were serious and continuing delays in referring cases to the Regional Medical Service because of the failure to apply laid-down procedures, inadequate supervision, and requests from the Regional Medical Service to defer references (paragraphs 4.9 and 4.10 and 4.16 to 4.20); (b) individuals found to be not incapable of work by the Regional Medical Service frequently remained in receipt of benefit for a considerable period because of conflicts in medical opinion and the time taken in the adjudication process [paragraphs 4.27 to 4.29).

16. The National Audit Office believe that the Department should reinforce their recent advice to local offices to secure compliance with control procedures generally, with specific action aimed at ensuring that Invalidity Benefit referral dates are correctly set and operated.

17. In the view of the National Audit Office the Department should in addition - continue to review the list of diseases (MF213) to bring it as far as possible into line with General Practitioner diagnoses (paragraph 4.11);

4 - review the guidance offered to General Practitioners on stating accurately the diagnoses on doctor’s statements (paragraph 4.12).

General conclusions 18. The National Audit Office conclude that a potentially effective control system has been established by the Department in a difficult and complex area. But this report identifies a number of significant weaknesses in the operation of that system. In particular, General Practitioners need clearer guidance and improved training to assist them in discharging their difficult certification responsibilities. Care must obviously be taken in dealing with the individuals concerned who will of course include those whose general health may not be good.

19. There are however considerable potential savings (amounting to nearly fll million a year for every one per cent reduction in the current number of recipients) from ensuring that only those who qualify receive the benefit. This would also substantially ease the pressures on all later stages of the control process identified in this report. It will inevitably take time to deal with the consequences of divergent medical opinions. But, nationally in 1988-89, if all those who ultimately had benefit disallowed had been removed from benefit a week earlier, the National Audit Office estimate that there would have been a saving of about El million.

20. In the National Audit Office’s view, the Departments should take steps to ensure that improved instructions and training are made available to those involved at each stage of the control system and that adequate monitoring arrangements are maintained by management to ensure that only claimants satisfying the qualifying conditions receive the benefit.

5 Part 1: Introduction

Background Departmental roles

1.1 Individuals who are unable to work on account 1.7 The Department of Social Security are of sickness are entitled to receive either Statutory responsible for the administration of Invalidity Sick Pay (paid by the employer) or Sickness Benefit Benefit. This is carried out by the local office [paid by the Department of Social Security) provided network. In each case, an independent Adjudication that in the latter case the qualifying conditions, Officer sited in the local office awards the benefit particularly those relating to the payment of National having regard to the doctor’s statement. Thereafter Insurance contributions, are satisfied. payment ceases if continuing evidence of incapacity is not produced. 1.2 After 28 weeks incapacity they move on to the long-term sickness benefit known as Invalidity 1.8 To assist the control process, each case may be Benefit. Payment of the benefit may continue, so long referred by the local office for a second medical as the individual is incapable of work, up to 70 years opinion on incapacity for work. These second of age [men) or 65 years of age [women). opinions are provided by the Regional Medical Service of the Department of Health, the Scottish 1.3 Invalidity Benefit is only paid where there Home and Health Department, or the Welsh Office, as evidence that an individual is incapable of work appropriate. The Regional Medical Service provide (Appendix l), usually given in the form of a such opinions on an agency basis for the Department statement (commonly known as a “sick note” or “sick of Social Security. While the respective Departments certificate”] from a General Practitioner, or from a are recompensed by the Department of Social hospital doctor if the claimant is an in-patient, Security for their expenditure in providing a reference advising the claimant to refrain from work for a service, it is for the individual Departments to specified period, and giving a diagnosis. exercise day to day management of the Regional Medical Service. The Department of Social Security work closely with these Departments in producing 1.4 The benefit is currently paid at a basic rate guidelines for General Practitioners, the Regional (known as the invalidity pension] of E43.60 per week. Medical Service and Department of Social Security There are also a number of additional payments local offices, and are represented at monthly liaison available which increase the average payment of the meetings with the Department of Health policy benefit to around E60 per week and can increase the division responsible for the Regional Medical Service sum paid to an individual to over El00 per week. and representatives of the Regional Medical Service These include additional invalidity pension earned for England, Wales and Scotland. In Scotland, there through earnings-related National Insurance are biennial meetingssupplemented by additional contributions, an invalidity allowance varying with meetings as the occasion demands. age, and extra sums for adult or child dependants. Invalidity allowance is offset against the additional pension. Invalidity Benefit is not taxable. 1.9 The Regional Medical Service may advise that a claimant is incapable of work, not incapable of work, or capable of work within specified limits. Subject to 1.5 To encourage an individual’s confidence to rare exceptions Invalidity Benefit should only be paid return to work, up to s28.50 per week may be earned where, on medical grounds, the claimant is incapable without the claimant losing benefit, provided that the of work [see Appendix 1). The independent local work is of a therapeutic nature and undertaken on the Adjudication Officer considers all the available advice of a doctor. evidence including the medical evidence from both the Regional Medical Service and the General 1.6 Numbers of individuals receiving Invalidity Practitioner (it may be conflicting) in deciding Benefit have increased by nearly 40 per cent, from whether to continue or stop paying benefit. Where 760,000 in 1983-84 to just over one million in 1987- the benefit is disallowed an aggrieved claimant may 88. Expenditure in 1987-88 amounted to f3.15 billion appeal to an independent Social Security Appeal (1989 prices). Tribunal.

6 INVALlnITY BENEFIT

Scope of the National Audit Office providing advice to General Practitioners investigation and second opinions for the Department;

1.10 The aim of the investigation carried out by the (c) whether the control system operated by National Audit Office was to examine the system for local offices is being properly and efficiently controlling the award of Invalidity Benefit. The applied. following issues are addressed in this report:

(a) the reasons for the growth in the numbers 1.11 The National Audit Office investigation was of beneficiaries and expenditure; concentrated in the first six months of 1989. The (b) whether work included visits to Regional Medical Service - offices in England, Scotland and Wales and to a the Department of Social Security have representative sample of local offices of the ensured that General Practitioners are Department of Social Security. On behalf of the aware of their obligations in signing National Audit Office, Gallup Surveys undertook a medical statements; and survey of General Practitioners. The National Audit - the Health Departments, in conjunction Office surveyed part-time referees engaged by the with the Department of Social Security, Regional Medical Service in England and Wales and have ensured that the Regional Medical officers in charge of Regional Medical Service Service operate efficiently and effectively in divisional offices. See Appendix 2. Part 2: Growth of Benefit Expenditure

2.1 The National Audit Office examined the data 2.3 The Department have taken these trends into collected by the Department of Social Security, and account in forecasting numbers of recipients and considered the results of work carried out by the levels of expenditure. The Government have however Department and external researchers to identify and made a number of changes to the benefit rules. As a analyse the possible reasons for the growth in result, expenditure in 1987-88 is estimated to be numbers receiving and expenditure on Invalidity about E50 million lower than it would have been had Benefit. the benefit rules been the same as in 1983-84. In addition, through the tightening of National Insurance Extent of growth contribution conditions, expenditure in 1991-92 is forecast to be f33 million lower than it would have 2.2 Figure 1 shows the growth in the numbers of been if benefit rules were the same as in 1987-88. recipients of Invalidity Benefit between 1983-84 and 1987-88 together with the Department’s forecast of Underlying trends further growth in numbers to 1990-91. Figure 1 also shows the growth in benefit expenditure (actual and 2.4 Evidence available from the Department forecast) over the same period. The forecast for indicates three major trends underlying the growth in expenditure rises at a higher level than that for numbers of recipients in recent years. numbers largely because of increasing entitlement to the additional earnings related pension element of the 2.5 First, the rapidly increasing number of Invalidity benefit. Benefit recipients is largely attributable to individuals Figure 1

Growth in Invalidity Benefit (at 1989 price levels)

Numbers (millions) 0 Expenditure (Ebn)

83-84 84-85 85-86 86-87 87-88 88-89 Financial year

Sources: Public Expenditure White Paper 89-90 to 90-91 Table 15.6, Hansard 2 Feb 1989 P370, 83-84 to 87-88 Actual, 88-89 to 90-91 Estimated

8 staying on the benefit longer. The numbers coming on Medical factors to benefit since 1983-84 have remained constant, while the numbers coming off benefit have been 2.9 Medical factors, in terms of any marked increase consistently lower. On average individuals are in the incidence of certain types of long term receiving the benefit for longer periods: Table 1 incapacity, do not appear to play a major role. The illustrates the increasing duration of claims, broken Departments pointed out however that the number of down by length of claim. recipients of Invalidity Benefit would be increased by medical factors such as the decrease in mortality from 2.6 The second major trend is the increasing heart disease, which would result in a greater proportion of older recipients: Invalidity Benefit payable to persons over pension age is the same as prevalence of that condition and a longer duration of the retirement pension they would have received but incapacity despite an unchanged incidence. The is not taxable. The number of men over 65 and Department have shown in the 1988 Social Security women over 60 receiving Invalidity Benefit as a Statistics that the most common causes of incapacity percentage of the total caseload has increased from are diseases of the circulatory system, principally eight per cent in 1983-84 to fourteen per cent in heart disease (23 per cent), and disease of the 1987-88 and is still rising. Half of those coming on to musculoskeletal system, including arthritis and Invalidity Benefit in 1985-86 were aged 50 or over. backache (24 per cent). Other significant causes Family Expenditure Survey data suggests that about include mental disorders (16 per cent], respiratory half of the men aged 60 to 64 receiving benefit also problems (10 per cent) and diseases of the nervous have an occupational pension, a proportion which system (8 per cent]. The proportion of cases suffering increased to two-thirds for men over state from these causes of incapacity has not changed pensionable age. markedly since the early 1980s. 2.7 The third trend concerns married women, an Non-medical factors increasing number of whom are acquiring a sufficient contribution record to enable them to qualify for 2.10 Entitlement to invalidity benefit should nearly Invalidity Benefit. This is a consequence of the always depend on medical criteria. In 1979, however, ending in 1977 of the married women’s option to pay the Department identified that the factors behind the reduced rate National Insurance Contributions. The then increase in numbers of recipients included men number of married women coming on to benefit is over 65 years of age staying on benefit longer, expected to double between 1983 and 1992, and by claimants returning to work more slowly, and the rise the latter date is expected to comprise about 25 per in long-term unemployment. And in 1985 the cent of the inflow. Government’s social security review suggested that, if Factors behind the underlying trends unemployment remained at a high level, “significant growth” could be expected in Invalidity Benefit 2.8 The National Audit Office examined research expenditure. Research commissioned by the available both within the Department and externally Department, and external research, has tended to about these underlying trends. support these indications. Table 1 Duration of Invalidity Benefit claims

Over 10 years 9.6 10.0 10.8 10.9 11.5 Length 4 to less of than 10 years 29.0 29.3 30.3 32.1 33.0 claim 1 year to less than 38.0 38.8 37.9 36.6 36.0 4 years Less than 1 year 23.4 21.9 21.0 20.4 19.5

Percentage of recipients Source: Department of Social Security analysis

9 2.11 One factor at times of high unemployment is per week in a job which is regarded as therapeutically that employers will be less likely to employ or retain beneficial, without losing any Invalidity Benefit. those with a poor sick record because fully fit people will be available. Therefore claims will be made for Conclusion Invalidity Benefit from those who in other times might have been in the employment field. 2.13 There has been no marked change in the incidence of diseases which can account for the rapid growth in numbers receiving Invalidity Benefit. The The financial attractiveness of Department have responded to this growth by Invalidity Benefit introducing certain changes in, for example, contribution requirements. These are expected to ~12 Unlike the principal alternative benefits reduce the increased cost of the benefit at the margin. available (Unemployment Benefit, There is however a strong likelihood that non- and the National Insurance retirement pension), medical factors, in particular unemployment, could Invalidity Benefit is not taxable. Furthermore, be playing a part in the award and duration of this claimants may qualify for a number of additional non-taxable benefit. The rest of this Report examines benefits which in certain circumstances could make it whether more needs to be done to ensure that more attractive compared with other benefits or controls over the award of, and review of continued working. Moreover, a claimant may earn up to E28.50 entitlement to, the benefit are operating as intended.

10 Part 3: Role of General Practitioners and the Regional Medical Service in the Control Process

3.1 Medical evidence plays a crucial part in the consider the patient’s fitness for alternative work. control of Invalidity Benefit. Doctors are involved at This may also be considered before incapacity has two stages: initial certification (General Practitioners) lasted six months where there has been an and second opinions (Regional Medical Service]. irreversibly adverse change in the patient’s physical or mental capacity. Role of General Practitioners 3.6 The Department of Health are not responsible for 3.2 A claim for Invalidity Benefit has to be training General Practitioners. The implementation of supported by a statement, normally signed by a the Vocational Training Regulations in 1981 required doctor, setting out the medical diagnosis which has the appointment of Regional Advisers in General led the doctor to advise the claimant to refrain from Practice to organise and supervise the training of work. In 1988, General Practitioners signed general practitioners. Training is provided at district approximately fourteen million statements of which level by Vocational Training Course Organisers, some four million were for patients who had been responsible to the Regional Advisers, and by sick for more than six months. approved general practitioner trainers. They may include medical certification in the training 3.3 The Department of Social Security, in programme but the Department of Health informed consultation with Department of Health Medical Staff, the National Audit Office that this competes with have provided a guidance booklet for General other matters, including clinical subjects and practice Practitioners on the medical evidence required. The organisational matters, which are of higher priority to booklet informs doctors of the importance of only practising clinicians. issuing statements where the patient is ‘definitely unable to work because of his physical or mental Kole of the Kegional Medical Service disorder’ and points out the benefit consequences of not doing so. It also sets out the rules for issue and 3.7 The main purposes of the Regional Medical completion of doctor’s statements. The booklet is Service are distributed to all GPs by Family Practitioner - to provide a reference service for Committees. Medical questions concerning government departments; completion of statements should be raised with the Regional Medical Service and assistance on non- - to undertake liaison visits to General medical matters should be sought from the manager Practitioners and others involved in the of the local office of the Department of Social provision of primary health care services, to Security. discuss a wide range of issues relevant to general practice and to primary care including 3.4 In addition, brief guidance is given in each pad certification and to gather information to assist of statements. This reminds General Practitioners that policy development in the Department of Health; if diagnoses are not sufficiently explicit, claimants and in England and Wales, may be referred unnecessarily for examination by the Regional Medical Service. - to undertake visits to General Practitioners to advise them on the effective and economic 3.5 Where an illness or injury is likely to be of short prescribing of drugs, practice organisation and duration, the General Practitioner needs to have on the design of new or modified practice regard only to the patient’s normal occupation. When, premises. however, a patient has been advised to refrain from work in that occupation for six months or more and 3.8 Department of Social Security local offices in similar advice for a further lengthy period seems Great Britain currently refer some 750,000 incapacity appropnate, the General Practitioner is asked to benefit cases a year to the Regional Medical Service

11 for a second medical opinion. In 80 per cent of these the guidance and training provided to enable them to cases the second opinion concurs with the General fulfil their medical certification role. The Department Practitioner’s advice that the claimant should refrain and the British Medical Association endorsed the from work. carrying out of this survey. Three thousand General Practitioners were invited to complete questionnaires. 3.9 There are six divisional offices of the Regional About one third responded, providing a sample Medical Service in England, one in Wales and two in representative of General Practitioners by age, Scotland. The divisions have a number of full-time location, sex and type of practice. medical staff who undertake reference and liaison work, part-time medical staff [the referees - 3.13 In addition, the National Audit Office carried practising or retired General Practitioners or retired out a survey of a representative sample of the part- Regional Medical Officers) - employed on a time medical referees in England and Wales available sessional basis - who undertake most but not all of to undertake examination sessions for the Regional the examinations of Invalidity Benefit claimants, plus Medical Service. The aim of this survey was to administrative staff. provide information about part-time referees’ understanding of their role in the control process. 3.10 Once a reference has been received from a local office, the following procedures apply: Questions addressed in the surveys - the reference or re-reference is linked to any previous papers; 3.14 The views of General Practitioners and part- time referees were sought on the following matters: - a confidential report is requested from the doctor issuing the doctor’s statement; (a) the adequacy of guidance and training provided for advising on a patient’s fitness to - on receipt of the report, the papers are work; scrutinised by experienced medical staff who decide whether the information available is (b) the understanding of General Practitioners sufficient for an opinion to be given without an and part-time referees of their responsibilities; examination, or whether an examination is [c) factors taken into account by General necessary; Practitioners when issuing medical statements, - if, in the view of the medical staff, the paper and part-time referees when offering second evidence indicates that the claimant is not opinions; capable of work, this opinion is given to the local office together with a recommendation (d) General Practitioners’ understanding of the either that the case be re-referred at a suggested role of the Regional Medical Service and of the date or that no re-referral is necessary: benefit structure; - if a medical examination of the claimant is (e) the quality of information provided by judged to be necessary, this is arranged. In the General Practitioners in reports to the Regional light of that examination, the Service will advise Medical Service on the condition of patients; the local office and the doctor whether, in their (fJ the views of General Practitioners and part- opinion, the claimant is capable of work or not. time referees about their requirements for further In the latter case a m-referral date is suggested information and guidance. where appropriate. [a) General Practitioners’ Guidance and Training 3.11 The decision whether to continue paying benefit rests with the independent local Adjudication 3.15 Before 1968 there was little formal vocational Officer whether or not the doctor agrees with the training for General Practitioners. Between 1968 and opinion of the Regional Medical Service. 1980 the provision of training increased but varied across the country. Since 1981 the satisfactory National Audit Office surveys completion of vocational training has been mandatory before a doctor can become a principal on a Family 3.12 The National Audit Office found that no survey Practitioner Committee list. Part of this training information was available in the Department about consists of educational sessions arranged locally by General Practitioners’ understanding of their role in Vocational Training Course Organisers whilst the the control process. The National Audit Office remainder is provided in practices by recognised therefore commissioned Gallup to conduct a survey General Practitioner trainers. The training programme among General Practitioners to assess the adequacy of during a three year course covers a wide range of

12 topics relevant to the care and treatment of patients 3.19 Thirty eight per cent of General Practitioners and to practice organisation, and may include responding to the Gallup Survey stated they had certification. For doctors about to become principals received no routine training or advice relating to on Family Practitioner Committee lists, however, certification work. The Department of Health told the clinical and organisational topics are regarded as National Audit Office that these findings did not having a much higher priority. Although Regional reflect their own experience of matters raised by Medical Officers make themselves available to General Practitioners. Where advice had been address trainee General PractitionerS on medical provided General Practitioners confirmed this was certification and the role of the Regional Medical normally part of their vocational training [Table 2). Service, not all course organisers avail themselves of this opportunity. Between 1986 and 1989 Regional Medical Officers in England addressed 79 groups of Table 2 trainees, but 25-30 Course Organisers had not availed themselves of an offer from a Regional Medical Training and advice on medical certification work Offhr.

3.16 The Regional Medical Service told the National Audit Office that Regional Medical Officers aimed to visit all new entrants to general practice within 6-9 months of their becoming principals, to discuss a No routine training or advice wide range of issues, including certification and the provided 38 work of the Regional Medical Service, and to reinforce the Department of Social Security’s Advice provided as part comprehensive handbook of guidance on certificatmn. of vocational training 41

Inter-practice discussions 29 3.17 The Regional Medical Service also carry out routine liaison visits to General Practitioners to Guidance booklet 19 discuss a wide range of issues to assist policy developments in the Department of Health. Wherever By experience/other 7 possible, and depending on the priority of the other issues, the question of certification is raised. General Source: Gallup survey Practitioners are not however obliged to discuss any of these matters with Regional Medical Officers, Note: The percentages exceed 100 because in some although they are obliged to answer inquiries about cases more than one source of guidance was listed. an individual statement or an individual report to the Regional Medical Service about a claimant, for example if irregular certification is suspected or if [b) the understanding of General Practitioners and there is a persistent conflict of opinion. In the first six referees of their roles in the certification process months of 1989 Regional Medical Officers in England visited over 1,200 practices (2,700 General 3.20 The survey indicated that the General Practitioners) and raised the question of certification Practitioners who responded saw their primary role at over 850 of those visits. Only 280 General as providing factual evidence on a patient’s fitness to Practitioners had any query about certification. At the undertake their present employment. Less than half of same time the Regional Medical Officer raised the the respondents also identified one of their roles as question of the role of the Regional Medical Service at providing factual evidence on a patient’s fitness for nearly 750 of those visits but only 210 General alternative work. This is a matter which General Practitioners had a query. Practitioners are asked to consider after an individual’s incapacity has lasted for six months (Table 3). 3.18 All nine Regional Medical Service Offices surveyed confirmed they had a planned cycle of routine visits to general practitioner practices, 3.21 The part-time referees correctly saw their main normally on a two-year cycle in England, but resource role as providing an independent opinion. In constraints and the long lead-in time required to addition, 55 per cent considered their role included a recruit new Regional Medical Officers prevented all check on benefit entitlement and protecting the but one office achieving this cycle. public purse.

13 Table 3 Table 4

Medical certification for the long-term sick Non-Medical Factors considered in long-term

,, oa~ii~~*.~~~*:‘r;~,-r * .^~., ,, sickness certification r” ,* II 4 ” ~ r ? * I/ * _ ~ * 7 *. * / ,* : ” : ; : : i,; ” .; ; ,; “‘,Z. I ” ‘* 1” 2 ‘* * ” 9 * G&eral X? ’ (Non-medical factors judged to be important/very *cz*i i “-I E ‘ix ‘:“? 1 ? *, ‘+‘G. 9,* j e*.’ *’* h * ‘j‘; :I 1 ” :~ ;j :;,j,,,;,,;,; _,;‘: ;. i i ~,/ _/L~ ,; ,.* * ,‘;,,I_ a, / *,z,, ~ ,:, :,I ‘ _ : ,~i_/,~ ./i _j i, , ,._ j* ,(/ &( >,*. . mz /,: ,, ., .: ,.,.i ‘\ )’ : : ’ ?Pr%t&oners important by doctors when issuing medical ,i ; ,,~1,1 :.~,.*,* ,: a ? ,, ..,.; i i ‘,i I ,_., j :,‘_ ; ‘>> ,:,~. ., ” ,> ..i_, ,,,., ,..,, .: ~ .,i, ,t : iiiho $e,etheir statements and opinions on incapacity to work] ; &.&, $~,,) ; ,,,.. 1,: . ,i ,, ‘. .) ;,., ” ; _i role as: I ,,,. ~;;: { ; ,;y: ; : ‘.’ % p&ey& i- : General Providing factual evidence on Practitioners Referees a patient’s fitness for work 91 % % Providing factual evidence on Loss of benefit if a patient’s fitness for the certificate is refused 43 8 alternative work 47 Patient’s family or social circumstances 34 12 Acting as guardians of the Availability of employment public purse 30 in the area 14 8 Confirming the patient’s opinion 22 Request to claimant from Job Centre to Source: Gallup Survey obtain a certificate 28 Not applicable

Source: Gallup survey of General Practitioners and (c) Factors taken into account by General National Audit Office survey of Regional Medical Practitioners when issuing medical statements Service part-time referees. 3.22 In advising a patient whether or not to refrain from work, General Practitioners take account of (d) General Practitioners’ understanding of the role family and social circumstances which might have a of the Regional Medical Service and benefit rates bearing on the individual’s medical condition. Most 3.24 The survey confirmed that General General Practitioners in the sample indicated that Practitioners were aware that the primary role of the medical considerations were paramount, but 43 per Regional Medical Service in the certification process cent felt loss of benefit to be an important or very was to give independent opinions on incapacity for important factor. Other factors which were felt to be work. [Table 5). The Department told the National of significance include the availability of employment Audit Office that these results indicated a good (Table 4) and requests to claimants from Job Centres understanding of the primary role of the Regional to obtain a statement. Since February 1989 letters Medical Service and a good knowledge of the other have been issued by the Unemployment Benefit aspects of the service. The National Audit Office Office to both the claimants and General Practitioners consider however that these results indicate some which make it clear that the General Practitioner is uncertainty. askedto provide adviceon the claimant’sfitness for work and that he should issue or refuse a statement 3.25 The majority of General Practitioners as appropriate. responding to the survey claimed to have little knowledge of Invalidity Benefit including the rates 3.23 Thirty two per cent of General Practitioners paid to claimants (22 per cent claimed “very good” or who responded to the survey stated that they had not “good” understanding). But even though most refused any patient’s request for a statement in the General Practitioners did not see their role as a check last six months. As shown in Table 4, some of the on benefits, a view confirmed by the Department, 71 part-time referees used by the Department to give per cent stated that they needed to know details of second opinions may also be misunderstanding the the various benefits for the purposes of medical criteria for offering medical opinions on capacity to certification. work. The Department of Health told the National Audit Office that the uncertainties of part-time (e) Quality of reports provided by General medical referees are largely due to the different Practitioners to the Regional Medical Service considerations they apply in their primary role as 3.26 The Regional Medical Service request a report General Practitioners, despite their introductory and on each case from the General Practitioner. In 1988 on-going training in the Regional Medical Service. each division of the Regional Medical Service in

14 INvALmITY BENEFIT

Table 5 Officers in eight of the nine Regional Medical Service divisions confirmed this view. General Practitioners’ understanding of the role of of the Regional Medical Service [fJ Requirements of General Practitioners and Referees for further information and guidance 3.28 The survey asked General Practitioners if they considered that they had sufficient information to To give independent opinions which form adequate views on a patient’s rapacity fur work are not affected by the family or limited work. The results indicate that more than doctor/patient relationship 92 one-quarter of General Practitioners considered they had insufficient information. L As a check to confirm proper 66 entitlement to benefit 3.29 Thirty per cent of those General Practitioners To get the patient back to work 40 requiring more information said they needed more As a check to ensure consistency details of the criteria and guidelines for determining a between General Practitioners 27 patient’s capacity for work and limited alternative work. Sixteen per cent said they required more Source: Gallup survey. details from employers as to what the patient’s job actually entailed. Seventy per cent of part-time referees said that, where their opinions differed from England assessed the quality of a total of 1,109 that of the General Practitioner, this was because the reports received from General Practitioners in a one day sample. Overall, one-third of the reports latter had failed to take into account the patient’s capacity for limited alternative work. investigated were found to give little or no assistance because the information provided was either Conclusions inadequate or non-existent. 3.30 The National Audit Office conclude that there 3.27 Eighty nine per cent of referees surveyed by the are considerable potential savings to be made if only National Audit Office said that they did not always those who meet the appropriate criteria receive the have sufficient information on the individual’s benefit. The calculation in Appendix 3 indicates that condition to provide an accurate medical opinion. these amount to nearly f 11 million a year for every Nine out of ten of these blamed the poor quality of one per cent reduction in the current number of the General Practitioner’s report. Divisional Medical recipients.

15 Part 4: Control by Local Offices

4.1 The Department of Social Security are England and Wales (paragraph 3.7). But a sample of responsible for the administration of Invalidity 171 cases from four local offices in Scotland was Benefit and the legislative framework in which the chosen to provide a broad overall comparison. independent adjudication authorities [responsible for the award and continued entitlement to the benefit) 4.5 A second sample of the 561 cases was selected operate. Administration is carried out in the from the records at the Regional Medical Service Department’s local offices, with assistance from the where an opinion was given that the claimant was Regional Medical Service. either not incapable of work or was capable of limited work. This sample was selected because the first 4.2 Although a doctor’s statement is an essential sample of 1,083 cases described above included all precondition in support of a claim in the vast types of cases referred, from which only a small majority of cases, the decision whether or not to percentage would normally be expected to be found award the benefit is the responsibility of the capable of work. The cases in the second sample independent Adjudication Officer. In practice a high were traced back to establish what action had been proportion of cases are accepted if they have the taken by local offices in the light of the opinion of the necessary medical evidence. When the statement Regional Medical Service, in particular whether expires, and no further statement is issued by the Invalidity Benefit was still being paid. doctor, the benefit should cease. In that event, the claimant may become entitled to other benefits, in Control by the local offices particular Unemployment Benefit or Income Support. Invalidity Benefit should also cease if, at any time 4.6 The following sections highlight key controls during the period covered by the statement, the operated by local offices, with the assistance of the claimant becomes capable of work or the doctor Regional Medical Service. Failure to apply these issues a closed statement. controls can put at risk the correct and timely payment of benefit. 4.3 Local offices may seek a second medical opinion from the Regional Medical Service. This second (a] Whether the referral dates chosen by local opinion is to assist the Adjudication Officer in offices were correct; deciding entitlement to benefit (a) to ensure that the [b] Whether local offices observed the referral incapacity is not unduly prolonged and (b) dates set; occasionally at the outset of the claim in cases where incapacity for work is in doubt. If the Adjudication (c) References to the Regional Medical Service; Officer disallows benefit either at the outset, or, (d] Local office action following the receipt of where benefit is in payment, following a “not the Regional Medical Service opinion. incapable” or “fit within limits” opinion, the claimant may appeal to the independent Social Security (a) Whether the referral dates chosen by local offices Appeal Tribunal who may decide to award or restore were correct benefit. 4.7 For a new case, the local office consult a list of 4.4 The National Audit Office examined samples of the more commcm diseases (the MF213), determine Invalidity Benefit cases referred to the Regional when the claimant can reasonably be expected to be Medical Service to establish how effectively the fit again and note the papers to refer the case to the Department of Social Security control system was Regional Medical Service for their opinion if operating. As at 2 April 1988 there were scme Invalidity Benefit is still being paid at that point (the 1,047,000 Invalidity Benefit cases in the United referral date]. The MF213 list is compiled by the Kingdom, controlled by some 500 local offices. For Department of Social Security on the advice of their England and Wales a representative sample was own medical staff and those of the Department of chosen of 1,083 cases referred to the Regional Health. Medical Service of which 1,028 were traced back to 29 local offices. In Scotland the work of the Regional 4.8 A case being referred a second, or subsequent, Medical Service differs in certain aspects to that in time to the Regional Medical Service is known as a

16 re-referral. In most instances, the re-referral date will Further evaluation of control dates will be made once have been based on advice given by the Service for the forms used by the Service have been redesigned that particular case. to allow the collection of data, and when the Service has been computerised. Introduction of the revised Audit findings forms and computerisation are planned for 1990.

4.9 The National Audit Office found that referral (b) Whether local offices observed referral dates set dates were set correctly for 65 per cent of the sample. 4.16 In addition to examining the accuracy of the Five per cent had too early a date and 11 per cent too referral dates set, the National Audit Office examined late. For the remaining 19 per cent of cases it was whether, in the sample taken, these referral dates impossible to tell from the control record whether were observed by local offices. they had been referred on time. Audit findings 4.10 Referring cases too early causes unnecessary work for the Regional Medical Service, and potential 4.17 Table 6 below compares the timing of actual strain on patients: if too late, the local office control referrals compared with referral dates set. of the claimant’s entitlement to Invalidity Benefit will be correspondingly delayed. 4.18 The average delay in the samples was 40 days in England and Wales, and 42 days in Scotland, with 4.11 Officers responsible for setting referral dates in 29 per cent of all cases being referred 30 days late or local offices expressed concern to the National Audit more (one in seven more than three months late]. Office that the MF213 does not take account of all diagnoses given by General Practitioners. The 4.19 The National Audit Office samples were based Department of Social Security told the National Audit on referrals during the first half of 1988 to avoid the Office that the list of diseases is the subject of regular distortions caused by the postal strike in the summer review. of that year. A further examination was made of the cases in the sample to check when re-referrals of 4.12 Concern was also expressed by these officers cases in England and Wales took place between July that General Practitioners’ handwriting was often 1988 and March 1989. (The number of relevant cases found to be difficult to decipher, and the nature of (82) in the Scottish sample was too small for the illness was not always sufficiently clear from the conclusions to be drawn.) The results of this exercise summary diagnosis. which are summarized in Table 7 suggest that, far

4.13 In both situations local office instructions Table 6 provide for a reference to be made to the Departments’ own medical staff when a diagnosis Referrals from local offices to the Regional Medical cannot be read or interpreted. Service

4.14 The Department of Social Security regularly update the referral dates rules, the last occasion being earlier this year. In particular, a management review in 1982 recommended that cases should not be referred to the Regional Medical Service during the Cases sent on time 261 25 34 20 first six months of sickness and there should be a Cases sent early 162 16 56 33 minimum period of one year thereafter before a re- Cases sent up to 30 referral was made. This was rejected because of the days late 301 30 29 17 need to ensure that as far as possible benefit was only + Cases sent between paid when it was properly due. In 1988 a report from 30 and 90 days late 156 15 28 16 the Department of Health and Social Security’s Cases sent Over 90 Internal Audit supported the Department’s intention days late 148 14 24 14 to conduct a review of the referral dates for the control of Invalidity Benefit. 1028 100 171 100

4.15 The Department informed the National Audit Source: National Audit Office samples Office that they had not, however, taken further Note: Some of the cases sent late may have been due action on referral dates because of resource to requests to local offices from the Regional Medical constraints within the Regional Medical Service. Service to defer references.

17 from improving, the situation may be getting worse. Reasons for the delays in referrals and The Department of Social Security told the National re-referrals Audit Office that plans to computerise the payment of by 1992 should significantly reduce 4.20 The National Audit Office found that in many the number of referrals not made at the right time cases referral dates were simply being overlooked by because they are overlooked. local office staff. A small number of offices were referring cases within 10 days, but in five offices Table 7 referrals were delayed by over 80 days. The Department told the National Audit Office that in , Cases re-referred to the Regional Medical Service 1989 they had reminded local office management of the need to secure compliance with systems control ! July 1988 to March 1989 procedures generally. Some delays had also arisen “-~~~~~.‘,i:ir~rrirx T,ii;i~s “,?, Li~l”url’~r’~,i,irqjri? .,,, “,*,%w~*., $.j, <~C ;,i; l+ii(r~g; *I 1-i:: ‘,,a i,i,,“l ‘,-iii, “rjlb’i”. ~*r~iiVb.>v because of occasional requests from the Regional / ‘) / ; ,~_ ,, _ _ ,.i / > ,~,,, . ” ** Number” i % x : Medical Service in England and Wales to local offices to postpone or temporarily suspend references. Cases sent on time 20 9 Cases sent early 53 23 Cases sent up to 30 days [c) References to the Regional Medical Service late 87 38 Cases sent between 30 and 4.21 For a number of years a quota system was in 90 days late 45 19 operation which set maximum weekly levels of cases I Cases sent over 90 days which could be referred from each local office. This late 27 11 quota was officially lifted in 1986. It has been re- introduced in Wales. Since January 1987 all regions 232 100 in England have had periods of referencing arrears. Five of the six divisions in England have occasionally ! Source: National Audit Office sample (England and introduced measures to temporarily suspend, limit or Wales) delay, the flow of references, mainly because of the

/ Figure 2 I I Numbers of claimants to incapacity benefits and references to the Regional Medical Service 1 1800 I !

Numbers of claimants 1200 H References- England 2 & Wales E 900 q References- Scotland $ 5 600 z’

85-86 86-87 87-88 88-89 Financial year

18 INVALIDITY BENEFIT

shortages of lay staff and Medical Examination of Social Security relating to processing times for the Centres but also because of factors beyond their delivery of these opinions. control such as the postal strike in the summer of 1988. The sixth division had not taken such measures (d) Local office action following the receipt of the but they informed the National Audit Office that they Regional Medical Service opinion. had had a continuous and variable backlog of work in that period. 4.26 The National Audit Office examined those cases within the sample of 561 cases (paragraph 4.5) 4.22 As a result, even though the number of where the Regional Medical Service’s opinion was references fell in 1986-87 on account of the extension that the claimant was either not incapable of work or of Statutory Sick Pay [offset by a lifting of quota capable of limited work. If the General Practitioner restrictions for other cases), the number of references agrees and issues a statement to that effect, the received by the Service for England and Wales has benefit ceases. If the General Practitioner continues to not increased in line with the increase in numbers certify incapacity for work a further reference to the claiming incapacity benefits (see Figure 2). The Regional Medical Service is made. Department of Health told the National Audit Office that the number of references in England had risen Audit Findings markedly during 1989. They forecast about 560,000 references for 1989-90 as a whole, an increase of 13 4.27 Gathering sufficient information for the per cant compared with the previous financial year. Adjudication Officer to decide on the continuation of There has also been a steady increase in the number Invalidity Benefit can be a time consuming process. of references to the Regional Medical Service in Of the 561 cases examined, 75 claimants were still Scotland over the same period, while there has been receiving Invalidity Benefit six months after the a slight decline in the number of claimants to opinion of the Regional Medical Service that the incapacity benefits. person was capable of some form of work was notified to the local office. It took on average 27 days Audit findings from the date of the opinion to the disallowance of 4.23 In the samples of cases they examined, the the benefit from those found to be not incapable of National Audit Office found variations between work by the Regional Medical Service and 38 days for divisional offices of the Regional Medical Service in those found to be capable of limited alternative work, the time taken to process cases. With two exceptions, where the Adjudication Officer decided that benefit all divisional offices experienced delay in what should cease. should be the straightforward despatch of requests to General Practitioners for reports on the claimant’s 4.28 In cases where the individual is found capable condition. Two factors were found to be delaying of limited work, the local office will refer the despatch to General Practitioners: individual to the local Unemployment Benefit Office to consider entitlement to Unemployment Benefit, - some offices suffered from high turnover of administrative staff; interview the claimant and seek assistance where appropriate from the Disablement Resettlement - the variable quality of referrals from local Officer at the Department of Employment. The offices. A recent survey by the Department of National Audit Office found that where close working Health revealed that 11 per cent of references relationships existed between the Department of received were faulty and had to be clarified or Social Security local office and the Unemployment rejected. In the sample studied by the National Benefit Office these appeared to facilitate that Audit Office, only 48 per cent listed the process. Close working links between the Department occupation of the claimant, which is important of Social Security local office and Department of for scrutiny purposes. In many of these cases Employment Disablement Resettlement Officers, who this was due to the claimant being unemployed. advise on alternative employment or training 4.24 Responses from General Practitioners were opportunities, appeared to have a similar effect. averaging 9 days. These responses varied in quality (paragraphs 3.26 and 3.27). 4.29 In the samples studied by the National Audit Office, lengthy processing times and delays meant 4.25 Further delays can occur where medical that on average it took 13 weeks [England and Wales] examinations are required. In the National Audit from the referral date set to the case being referred to Office samples, the average processing time for the the Adjudication Officer where the individual was Regional Medical Service (including obtaining reports found to be not incapable of work or capable of from General Practitioners] was 41 days in England limited alternative work, and a further 5 weeks for and Wales and 24 days in Scotland. No performance the Adjudication Officer to process the case to standards have yet been laid down by the Department disallowance of benefit (Table 8).

19 INVALIOITY BENEFTT

Figure 3

Successfol appeals by Invalidity Benefit claimants to Social Security Appeal Tribunals (claimants found to be not incapable or no longs capable of work)

60

1984* 1985 1986 1987 1988 Calendar year Number of incapacity appeals: * 1984- 1719 1986- 2667 1988- 3920 1985- 2766 1987- 2515 * Last 9 months

Table 8 4.30 Processing these cases will inevitably take time. But the saving to the Exchequer from disallowance a Cases where benefit disallowed: process time week earlier, assuming this pattern is reflected nationally, is estimated to be fl million, although it will not necessarily follow that speedier processing will have this effect in all cases. See Appendix 3. Average delay in referring the case to the Regional Medical Service 4.31 The claimant may decide to exercise the right 4.18) 40 (paragraph of appeal against disallowance of Invalidity Benefit, Average process time at the even if alternative benefits are available. The weight Regional Medical Service attached to the General Practitioner’s opinion, even [paragraph 4.251 41 Average time in postal system 10 where the (sometimes repeated] opinion of the Regional Medical Service is that the individual is 91 ie 13 weeks capable of, at any rate, limited work, appears to be Plus time taken for Adjudication reflected in the increasing proportion of successful Officer to disallow benefit appeals by aggrieved claimants to the independent (paragraph 4.29, weighted average Social Security Appeal Tribunals (Figure 3). of times stated) 34 ie 5 weeks Total average process time 125 ie 18 weeks

20 Appendix 1

Legislation and case law on incapacity for work

I. In order to obtain sickness or invalidity benefit the claimant must prove that he or she is incapable of work throughout the day for which benefit is claimed. The legislation establishing these benefit entitlement criteria is:

(a] the claimant is incapable of work Social Security Act 1975 sections 14(l) and 15(l) (b) a day is not to be treated as a day of incapacity Social Security Act 1975 sections 17(l), and Schedule for work unless on that day the person is, or is 20 deemed in accordance with regulations to be, incapable of work by reason of some specific disease or bodily or mental disablement (c) “work” means “work which the person can be Social Security Act 1975 section 17(l](a] reasonably expected to do”

2. Further to the primary legislation, case law has developed from appeal decisions by the independent Social Security Commissioners who deal with points of law arising from tribunal decisions. For prolonged illness or disablement the following major decisions have been incorporated into benefit rules and regulations: (a) The test of the claimant’s incapacity for work should not be confined to the ordinary occupation. (b) Work in this context means work, either full or part time, for which an employer would be willing to pay, or work as a self employed person. (c] It is reasonable to expect claimants to adapt to their limitations for the purpose of earning remuneration. (d] Adverse effect of current economic conditions in the labour market is not a factor in deciding incapacity for work. The fact that there is no suitable work locally is not sufficient to prove the claimant is incapable of work. (e] The reasonableness of alternative work is dependent upon individual circumstances but should not be influenced by any financial loss the claimant may suffer.

21 Appendix 2

Surveys and samples

Surveys

I. The following groups were contacted by means of questionnaires and their responses analysed (a] General Practitioners - (i) selected 3,000 (10% of population) (ii] response 989 (33% of selected) (b) Divisional Medical Officers - [i) selected 9 (75% of population) (ii) response 9 (100% of selected) (c) Part-time Referees (England - (i) selected 72 (27% of population] and Wales) (ii] response 62 (86% of selected)

2. The following samples of cases referred to the Regional Medical Service were selected: (a] Sample selected for England and Wales (7 Divisions) reviewing Regional Medical Service performance. - 1,083 cases (b) Sample selected at (a] above and traced through to Department of Social Security Local Offices for England and Wales (29 offices) to review Local Office performance. - 1,028 cases (c] Sample of specific cases where Regional Medical Office doctor’s opinion was, “capable of or capable of limited work” traced through to Department of Social Security Local Offices for England and Wales (29 offices). - 5lzcases

3. A small sample, for comparative purposes, was selected covering the Scottish Regional Medical Service (2 Divisions) and Department of Social Security Local Offices in Scotland (4 offices). - 171cases

22 Appendix 3 Potential savings from improved control - NAO calculations

1. This appendix sets out the calculations underlying the potential savings from: [a) reduction of numbers claiming Invalidity Benefit (nearly El1 million a year for each percentage point reduction) (b] a reduction in average processing time per case found capable of work by the Regional Medical Service (about El million for each week’s reduction). Reduction in numbers

2. Based on estimated outturn for Invalidity Benefit for 1988-89 of E3.41 billion the financial impact of a reduction of 1 per cent of the numbers on benefit has been assessed as set out below: [a) Individuals found capable of work may be eligible to other benefits. In 1988 a Department of Social Security Internal Audit study sampled 1,000 cases found capable of work by the Regional Medical Service. Of these, 25 per cent stayed on Invalidity Benefit, 25 per cent transferred to Unemployment benefit, 25 per cent transferred to Income Support and 25 per cent came off benefit. The National Audit Office samples of 1,028 and 561 cases found capable of work (Appendix 2, paragraph 2 (b) and (c)) supported these findings. Average benefit rates per week of E60 for invalidity Benefit, E48 for Income Support and E43 for Unemployment Benefit have been derived from these studies and samples. (b) The calculation below assumes that the proportions in (a) would apply on cases found capable of work by General Practitioners as a result of improved guidance and training, and the proportion of cases who remain on Invalidity Benefit would transfer to a financial equivalent benefit e.g. retirement pension. Illustration

Calculation of net saving of one percent of 1988-89 benefit (E3.41 billion)

25% come off benefit (E60 X 25%)/E60 X E34m 8.5

25% transfer to Unemployment Benefit ((E60-E43)X25%)/E60 X r&34111 2.4

25% transfer to Income Support ((E60-~&48)X25%)/E60 X E34m 1.7 saviqs 12.6

Less additional payable to individuals coming off IVB -1.9 net benefit savings 10.7

Reduction in processing time

3. The National Audit Office samples (Appendix 2 paragraph 2) showed that, for cases found capable or capable within limits for work by the Regional Medical Service, it took on average 13 weeks from the date the

23 case should have been referred to the Regional Medical Service for a second opinion to the date on which the Adjudication Officer considered the case, and a further 5 weeks before the benefit was disallowed. The sample of 561 cases revealed that 7 per cent of cases found not incapable of work and 19 per cent of cases found capable of limited alternative work are likely to remain on benefit. Invalidity Benefit cases accounted for 76 per cent of the sample [the residual 24 per cent being mainly Sickness Benefit or Severe Disablement Allowance). Applying these results to the total numbers found not incapable of work or capable of limited alternative work by the Regional Medical Service in England and Wales for 1988-89 gives:

total cases cases coming off benefit

Not incapable 34,312 X (loo-7)% 31,910 Capable within limits 42,311 X (loo-191% 34,272 66,182 for Invalidity Benefit numbers coming off 66,182 X 76% = 50,298(assume50,000)

4. Calculations of potential net weekly savings based on the assumptions in paragraphs 2 and 3 above:

EOOOper week

25% ccnne off benefit (50,000 X 25% X E60) 750

25% transfer to Unemployment Benefit (50,000 X 25% X (f60-E43)) 212

25% transfer to Income Support (50,000 X 25% X (E6OGS48)) 150 savings 1,112 Less additional housing benefit payable to individuals coming off IVB -150 net benefit savings 962*

* This figure represents the national saving to the Exchequer if disallowance of Invalidity Benefit took place one week earlier. It is based on the assumption that an earlier reference to the Regional Medical Service would have resulted in the same advice on incapacity for work: this may not apply in all cases. In addition there will be sane small savings on the Sickness Benefit cases resulting from control improvements. The savings are therefore likely to be in the region of El million for every week’s reduction in processing time for individuals found not incapable of work or capable of limited alternative work.

24