Powered by Guardian.co.ukThis article titled “Three-quarters of incapacity benefit claimants are fit to work, says DWP” was written by Allegra Stratton, political correspondent, for The Guardian on Tuesday 26th October 2010 21.22 Europe/London

The following correction was printed in the Guardian’s Corrections and clarifications column, Thursday 28 October 2010

In the story below the headline and opening paragraph over-compressed findings issued by the Department for Work and Pensions. And while a departmental statement made some mention of incapacity benefit, the figures at issue concerned the successor scheme – employment and support allowance (ESA), which has been in force for new claimants since October 2008. To clarify the figures: the 75% of ESA claimants characterised as fit to work actually included, as the second paragraph of our story said, people who closed their claim before medical assessments were complete. The full breakdown of how new claims were assessed between October 2008 and February 2010 was: claimants fit for work, 39%; claims closed before assessment complete, 36%; claimants unable to work now but with help could work in the foreseeable future, 15%; those unable to work now and needing long-term unconditional support, 6%; cases still being assessed, 3%. Parenthetically, a further outcome appears elsewhere in the official report from which the figures came, Employment and Support Allowance: Work Capability Assessment, October 2010. Its section on appeals notes that of people found fit for work after making a claim for ESA between October 2008 and August 2009, 33% have had an appeal heard to date; of these, the original fit-to-work decision was “confirmed for 60%”; by implication 40% of fitness rulings were not upheld .

Three-quarters of the incapacity benefit claimants reassessed recently are able to work, the government claimed today as it sought to demonstrate momentum in the drive to reform the welfare system.

The Department for Work and Pensions (DWP) figures showed that 78% of the 842,100 people reassessed were either fit for work or had closed their claim before medical assessments were complete.

The government is pushing ahead with the programme of reassessing those on the old-style incapacity benefit. It plans to cut back the wider benefit bill by £18bn.

The issue of caps to housing benefit, meanwhile, flared up in the Commons today. At question time, Labour’s shadow political reform minister, Chris Bryant, asked Nick Clegg whether the coalition’s decision to cap the benefit at £400 a week for a four-bedroom house would mean as many as 200,000 people leaving London to find cheaper accommodation and amounted to “sociologically cleansing” poorer residents from the capital.

Bryant said: “Would it not be iniquitous if, on top of being socially engineered and sociologically cleansed out of London, the poor were also disenfranchised by your bill? How do you propose to make electoral provision for these displaced people?”

The deputy prime minister said: “To refer to cleansing would be deeply offensive to people who have witnessed ethnic cleansing in other parts of the world.” He added: “Do you really think it’s wrong for people who can’t afford to live privately in those areas that the state should subsidise people to the tune of more than £21,000? I don’t think so.”

Bryant’s figure of 200,000 is based on work by London Councils – the representative body of the capital’s boroughs – which last week warned that as many as 82,000 households or 250,000 individuals would be unable to afford the new rents, become homeless and be in need of cheaper accommodation outside London.

Later in the afternoon Downing Street disputed the figure, saying by their estimates 21,000 people would be affected nationally, including 17,000 in London.

However they were reminded of deep unease about the cap within their own ranks by a meeting of London Tory MPs yesterday raising questions about the proposed change to housing benefit and an aide to Iain Duncan Smith said their concerns were being taken on board.

Meanwhile, three of Britain’s churches accused the chancellor, George Osborne, of exaggerating the scale of benefit fraud in last week’s spending review speech, pointing out that official figures were lower than the £5bn claimed by Osborne.

Government sources insisted the inconsistency arose because the chancellor was including the amount wasted through error in his lump sum. The president of the Methodist Conference, Alison Tomlin, said: “Exaggerating benefit fraud points the finger of blame at the poor.

“Let us be clear this recession was not caused by the poor, those on benefits, or even benefit cheats.”

This week the DWP confirmed it planned a massive simplification of the pension system with a green paper to be published before Christmas.

It plans to increase the basic state pension from £97.65 a week to £140 for future pensioners at retirement age. The government wants to take millions of pensioners out of means testing and increase payments for women, who often spend long periods out of work looking after children or parents and therefore do not notch up sufficient national insurance.

The Liberal Democrats have long wanted a “citizen’s pension”, paid to claimants who can prove they have lived in the UK irrespective of national insurance. Government sources said the new system would not be purely based on residency but there would be “flexibility” on the contribution principle. An official at the DWP said: “It’s going to be a sensitive balance between keeping the contributory principle … but also looking for some flexibility for women who take some years out of work to care for others.”

Today the government announced a revamp of another policy, the child trust fund (CTF), which they discarded in June’s emergency budget, saving £500m.

The government announced a tax-free children’s savings account from autumn next year, which required it to contribute £250 of public funds to all children and £500 to poorer kids. As with ordinary ISAs, there will be an annual cap on the amount parents can pay in. Children will be able to access the ISAs only when they are 18.

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