Disability – the power of a market model to unlock a global consumer revolution

I think Government should get out of social care, put £100bn of public money into the bank accounts of people with disabilities, invest billions into making Britain a world leading exporter in assistive technology and give employers dramatic tax incentives to employ more people with disabilities. Why do I think this? Because I think that a market model offers people with disabilities far more possibilities than the current welfare model.

Unfortunately, this debate rarely gets going. Those who want to dismantle historic (indeed archaic) welfare are suspected of being heartless and self-interested. This echoes Franklin D Roosevelt’s view that “Self-interest is the enemy of all true affection”. As most people don’t have disabilities, the political debate does not equate disability with self-interest. Disability issues are framed in terms of affection, of charity. “Think of others not yourself” is the moral tone of the debate. But charity has delivered limited results: disabled people are poorer; the number getting help with social care has declined by a quarter in the last 5 years; services for people with disabilities remain old-fashioned and low quality; only half of working age people with disabilities have a job. Even more sobering are the limits to affection. Two-thirds of people admit to having avoided people with disabilities because they feel uncomfortable with them. Shockingly, there are 200 hate crimes against people with disabilities every day. But these are not just issues for other people. The majority of British people will become disabled during their life. 11m people have a disability.  83% of them were not born with it. Just over half of those who reach 65 (and rising) will develop a disability and have it for 5 years or more. Most of us are or will become disabled. 

So, rationally speaking, disability issues should be seen as a matter of self-interest for all us, not just an act of charity for a minority. And yet disability does not even come up as a coherent issue in the current political debate. It is in bits. The charitable origins mean disability is discussed in a fragmented and bureaucratic way. We debate, separately, DWP’s benefits (a dozen of them), HMRC’s tax credits, Local Authorities’ social care, NHS’ long term conditions, Education’s SEN, BIS’ employment rights, CLG’s social housing , etc. But we do not bring this together into a unified debate about what how we want to support the 11m people with disabilities. That’s more than the number of children in our schools. It’s a much bigger minority than all ethnic minorities added together. And the money involved matters. For children and adults with disabilities, benefits and tax credits approach £40 billion per annum and local authority services equal £20 billion. Health spends as much again, with 70% of NHS spend going on the 15m people with long-term conditions, the majority of which are limiting illnesses that disable people. These fiscal costs don’t include the lost tax income from the half of working adults with a disability who are not in a job. When it’s brought together in one debate, it becomes clear that Government spends much more on disability support than it does on pensioners. So we need to lift ourselves above the bureaucratic mess and open a fresh debate. One place to start is to look at unlocking the market power of people with disabilities.

Firstly there is consumer power. Globally, there are already 1.1 billion consumers with disabilities. That’s an emerging market the size of China. Unlike China, however, this is an increasing population. But as a retail market it’s under-served and hardly recognised as a major global market. Instead, lots of the buying power is controlled by public sector institutions – paternalistically deciding on the social care services and medical support given to people with disabilities. Rather than giving this buying power away to disabled consumers, the current debate in the UK is about merging together the paternalist power of health and social care so that “integrated” services are put together by professionals and imposed on people without choice. Somehow, this has become the moral high ground. Politicians are falling over themselves to drive integration. But even if this was feasible (which I doubt), it is a totally retrograde step. Instead, for the last decade, the social care profession has espoused giving people with disabilities full control over their own services. Rather than councils buying services and giving them to people needing social care, the idea has been to give the equivalent cash to the individuals and let them make the best use of the money. Superb NGOs like In Control have demonstrated the very positive impact of this empowerment on the lives of people with disabilities. Not only does it give people more dignity, but they get more out of the money. In Germany, where people are offered a service or a cash amount instead, a large percentage choose the cash even though it is much lower in value. This philosophy has carried across now into children services – e.g. from this summer parents will be able to get direct cash payments for special educational needs. But just giving people the option to take control has not worked. The reluctant professionals and bureaucracies argue that people don’t want choice, or that they are not fit to exercise it or that it’s far too bureaucratic to monitor the spending. This can sound plausible, until you remember that most of the public money to help people with disability services comes in cash benefits from DWP. The same people who apparently don’t want or can’t cope with financial control over their own lives when we discuss the £13 billion of adult social care help seem perfectly willing and able to take the £40 billion of DWP/HMRC cash benefits. In the latter case, once someone is eligible for help they are just given the cash and expected to manage their own life. We should make it mandatory that social care help is paid as a cash benefit. And then we could merge these two systems, putting the adult social care and disability benefits together to create a unified £50+m cash benefit system. The outcome would be that local authorities no longer operated social care services. That would save at least half of the £2 billion p.a. they spend on assessment and care management. It could also save the £1 billion p.a. subsidy that goes to in-house services. Even a £2 billion combined saving could increase the numbers getting care by 15%. We could then rationalise access to the combined funds – some are means-tested, some aren’t; some require independent assessment of needs, others don’t; some are nationally run, some are locally run. Either DWP or Local Authorities could operate the new benefit system. Step 2 would be to do the same for children support. And then Step 3 would be the big one – the NHS and its funding for long-term conditions, which is the majority of its spend. This means conditions like arthritis, MS, heart conditions, depression and diabetes. The NHS has only had the smallest experiment with personal budgets – a modest pilot from 2009-12 and a new right from April 2014 for 56,000 people with continuing care. The evidence of the pilots and private spending is positive, that people become active consumers and make diverse choices about meeting their own needs. All these moves are about giving people with disabilities as much individual consumer power as possible – to give them the same choices with government money that rich people have with their own. If we got on with doing the same for children support and NHS long-term conditions, we could put £100 billion into the bank accounts of people with disabilities.

The second part of the market model is to stimulate innovation and new consumer solutions. Let’s re-set our expectations about what’s possible. Sitting in England in 1914, the most able-bodied people couldn’t hear what people were saying in Africa, they couldn’t fly to other countries for a business meeting, they couldn’t perform complex calculations in a millisecond, they couldn’t capture moving pictures and send them to anyone in the world whenever they wanted. Now these things are commonplace. Technology has lifted the restrictions placed on all of us by the limits of our natural abilities. It has particularly transformed three of our abilities – mobility (cars, planes, bicycles, etc); communications (phone, TV, video, etc); cognitive skills (calculators, computers,  smartphones, etc). We can get around, hear, see, speak and think much better. It is impairment of these abilities which hold back most people with disabilities. It is hard to see why future technology cannot overcome all impairments. Clearly, technology has already done much to help people with disabilities. Most famously, Stephen Hawking’s ability to squeeze his cheek muscles is translated into text, speech and surfing the net through an Intel switch attached to his glasses. Through this technology, Hawking has not only been at the leading edge of his generation in theoretical physics (calculating whether information is or is not lost when it enters a black hole) but he has also popularised deep physics (in Brief History of Time, the Simpsons and the sitcom Big Bang Theory). Given the world’s desire not to lose contact with his genius, technology has adapted over time to cope with his deteriorating condition. Anticipating that he may develop Locked In Syndrome, researchers are now working on facial recognition and brain-controlled software. Imagine if we brought the same intensity of investment in assistive technology to the mass consumer market. Even without significant funding, the world’s innovators are already eliminating disadvantage – the i-Bot stair-climbing wheelchair (which can also elevate its user to eye level); Dagar’s Braille smartphones and Edge 40 Display which converts on screen text into Braille; Dennis Hong’s car for blind drivers or the Kengum electric car which doesn’t require the driver to leave the wheelchair to enter or exit; Dyna Vox’s Eye Max computer where the screen tracks the user’s eyes to get its input. But we need a big leap to bring down cost and drive competition in this global market. If ever there was a need for an industrial strategy, it must be assistive technology. The UK Government could replicate its activism in life sciences – research grants, centres of excellence, data and intelligence, prizes, smart regulation and export help. But more than this, it makes fiscal sense to massively invest in new technology – if more people with disabilities work, if those in work are more productive, if those in education can learn more and if those who receive care need less help, then the fiscal benefits could be enormous. That’s not to mention the productivity gain in the social care workforce.There are already 1.6m jobs in social care in England, projected to rise to 2.6m in 2025. That could be 1 in 10 people working in social care, in low paid, low productivity jobs. Investment in technology makes perfect self-interest. Given existing excellence in Sheffield and other cities, a big investment now could give a big comparative advantage for our export industries, if we can steel a march on the global market.

Thirdly, in a market model, we need to transform the employment prospects of people with disabilities. We have the existing problem that only half of working age adults with disabilities are in work. We also have the emerging problem that, in spite of the retirement age being increased, large numbers of people are early retiring in effect due to sickness and disability. The proportion of men employed falls sharply from the age of 55. Whilst 85% of men aged 50 are employed, by age 62 only half of men are still employed and by 64 only a third are working. This is partly driven by the increasing proportion of men with limiting long-standing illnesses at age 60, which has trebled to to 1 in 4 over the last 30 years. We clearly need to find some way to incentivise the employment of people with disabilities. The best way is probably to offer relief from National Insurance. This could be relief for both employees and employers, in order to incentivise both sides. This could make a 26% difference on employment costs – with employers gaining 14% and employees gaining 12%. For employees with disabilities who have families or higher costs, there could be could be more generous tax credits to supplement earned income. Although there is some deadweight in this fiscal generosity, in an economy where 50% of adults with disabilities are not working (which will increase as the pension age rises), there is a need for some drastic action to increase employment and improve the net wages from many low paid jobs.

There is no doubt that we need new solutions to disability issues. The best way to find them is to open up global consumer markets and use competition to drive technological innovation. To help people with disabilities become more powerful consumers they need to be given individual choice and freedom to spend their state entitlements on they solutions they choose. They also need new incentives to increase employment and net wages from working. To drive more choice, governments need to pump-prime investment in new technology, as a part of their general R&D spend, and to open up trade across borders to intensify competition. Along the way, we need to put aside the paternalism of much of our existing system and remember that most of us are or will become disabled. So it is in our self-interest to ensure that we all have the best access to personal choice, obstacle-removing technology and employment. Having disagreed with FDR on self-interest vs kindness, it is hard not to give the last word to him, as not only one of the great figures of the last century but also someone who became (like most of us will become) disabled during his life: “We know that equality of individual ability has never existed and never will, but we do insist that equality of opportunity still must be sought”.

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