Incapacity Benefit: minor tinkering will not end a sick system
The question the Conservatives refuse to examine is whether it is possible for a government bureaucracy to manage such a system without large amounts of fraud and questionable claims. Nobody with any authority has any financial incentive to police the system properly – neither the claimant, the doctor nor the benefit office…The problems that exist within the system cannot be resolved by goodwill and the hounding of claimants.
What is needed is wholesale privatisation of the benefit for those who are fit and healthy when they leave full-time education. Frank Field has pointed out how small profit-making organisations and mutuals used to manage such insurance benefits very well. They developed mechanisms to assess claims which ensured that there were very few “dodgy” claims. Furthermore – and experience of microfinance projects confirms this – private organisations and mutual associations have the strongest possible incentive to ease people back into appropriate employment.
In 1999 a Royal Commission on long-term care for the elderly reported. There is an excellent minority report but the majority report is staunchly left wing, statist and strongly prejudiced against private health care. However, even this Royal Commission had to admit that the best practice in long-term care for the elderly was in the private sector. This is largely because the minimisation of claims (and the disabilities that lead to claims) is in the joint best interest of the insurer and recipient of the benefit.
So let’s privatise all disability insurance. Or better still, make it optional and just allow people to provide for life’s contingencies in their own way.