employedThe odds of people with disabilities who have been unemployed for more than a year returning to work diminish at twice the rate of non-disabled people, a report has found.

The report, from independent think tank Resolution Foundation, calls on the government to revise its “seriously misguided” policy focus on disabled people on benefits.

Time spent out of work is a key determinant of the chances of getting another job for all groups – but particularly crucial for those with disabilities, the report found. Its analysis showed that 16% of disabled people who have had a job within the past year re-enter work each quarter. This falls to just 2.4% for those who left a job more than a year ago, meaning the chance of re-entering after a year out is 6.5 times lower than in the first year of unemployment.

Importantly, this ‘time out’ penalty is more than twice the size of that for non-disabled people, who are only three times less likely to re-enter employment after a year out of work than in the first year after exiting.

The report argues that the current policy focus on disabled people on benefits is therefore seriously misguided. Being assessed for disability benefits after leaving employment can take between 9 months and one year: 6 months in receipt of Statutory Sick Pay followed by at least 3 months spent waiting for an assessment after making an Employment and Support Allowance claim. By this point, the odds of re-entering work have fallen considerably.

The government has committed to improving employment outcomes for disabled people, including real-terms spending increases in this parliament, and a much more health-focused back-to-work programme – the Work and Health Programme – to replace the Work Programme next year.

But the Resolution Foundation estimates that under current plans even a high-performing Work and Health Programme would only support 20,000 disabled people per year into work. This approach alone would make very little dent in the government’s ambition to halve the disability employment gap, which the Foundation estimates will require a 1.5 million increase in the number of disabled people in work by 2020.

The report calls for the forthcoming Green Paper on disability employment – due to be published later this year – to consider a radical new ‘damage prevention’ approach to bring support to people with disabilities not when they are on benefits but before they exit the labour market and during periods of sickness absence.

The Foundation proposes that the government sets a target to reduce the number of disabled people leaving employment, to sit alongside the ambition to halve the disability employment gap. To meet that target the Foundation calls for a major focus on retaining links between a firm and an employee. That should include the introduction of a statutory ‘right to return’ period of one year from the start of sickness absence, and a government rebate on Statutory Sick Pay costs for firms who support employees to make a successful return during this period.

In addition, the Foundation highlights the potential of the new Fit for Work service, an occupational health and rehabilitation service for employees on sick leave introduced by the government last year. However, it is concerned that restricted entry routes and low referrals are hampering its chances of success. The Foundation recommends that the service is opened up to the self-employed, that employees are allowed to initiate engagement (rather than just GPs and employers) and that incentives for firms and employees to engage with Fit for Work are introduced.

The Foundation also suggests that the Access to Work programme – which provides grants to workers with health problems and disabilities and is widely regarded as a success – is expanded.

Laura Gardiner, senior policy analyst at the Resolution Foundation, said: “Helping people with health problems or a disability to enter and remain in work is a major concern in an ageing society, and the key challenge to overcome if we are to achieve the Chancellor’s goal of full employment.

“The current focus on supporting people after they have been assessed for benefits is misguided, with help arriving too late and on too small a scale for the millions of people who need it.

“A ‘prevention is better than cure’ approach that improves support and incentives in the workplace and during periods of sickness absence should be at the centre of the government’s forthcoming Green Paper on boosting disability employment. Such an approach would mean fewer workers have to experience the stress of being out of work, employers see a reduction in their staff turnover and the government can make faster progress in its laudable ambition to halve the disability employment gap.”

Rossanna Trudgian, head of campaigns at learning disability charity Mencap, said: “This report offers further evidence that a lack of government action risks undermining their manifesto commitment of halving the employment gap experienced by disabled people.

“Currently just 2 out of 10 working age people with a learning disability have a job, despite the fact 8 out of 10 have a mild or moderate learning disability and could work if they had the right support. A series of cuts to benefits and social care, including the recent cut to Employment and Support Allowance which almost half of disabled people say would mean they return to work later, is taking away the support disabled people rely on to find employment.

“Within its imminent Green Paper on disability employment, the government now needs to outline how it plans to address the core issues that result in such low employment figures. These include the barriers employers perceive in taking on disabled employees, the in-effective government Work Programme, Jobcentre advisors that don’t have adequate training on learning disability and vital support being taken away by cuts to benefits and social care.”