The National Audit Office has called for thousands more disabled people to be brought into government welfare-to-work schemes.

In a report released on Thursday, parliament's spending watchdog called on the Department for Work and Pensions to do more to promote employment among the disabled.

The report broadly praised the DfWP's existing programmes but claimed they do not go far enough to address the high cost of supporting those who could work but do not.

With £12bn being spent on incapacity benefit every year for 2.6 million recipients, ministers have targeted these costs as a means of saving money, as well as boosting the economy and morale among claimants.

The NAO pointed out that the 50 per cent employment rate among the 6.7 million disabled people of working age was significantly lower than the 75 per cent participation in the population as a whole.

It said the DfWP provides "an effective range of support" to those it helps, but that only 125,000 are involved in the broad range of government schemes, at a cost of £300m per year.

"The programmes support only a small number of the people who could potentially benefit," the NAO concluded.

Recommendations

The watchdog called for the number of schemes to be "rationalised" in order to offer a more personalised service to thousands more potential recipients of help.

The report also claimed the "department's knowledge of what providers deliver is poor", while ministers "should focus more resources on helping people stay in work and build upon the findings from current pilots".

And it found that Remploy, the disabled employer and employment agency, needed to offer better value for money for the £115m annual state support it receives.

Several of its manufacturing businesses are "not currently sustainable in economic terms", the NAO said.

Auditor general Sir John Bourn called for a more "cost-conscious" approach.

"Whilst not everyone with a disability is able to work, with the right support at the right time many disabled people can - and they deserve the opportunity to do so," he said.

"The department offers effective packages of support that enable people to overcome the barriers to employment and which are greatly appreciated by the people who participate in them.

"In order to reach more people, the department needs to adopt a more flexible, cost-conscious, quality driven approach to enable the department to make more progress towards its target for improving the employment rates of disabled people.

"Placing greater emphasis on helping people retain existing employment, could help individuals avoid distress and financial hardship while reducing the impact on public spending."

Reactions

Employment minister Margaret Hodge said the report "rightly identifies much of our progress to date helping disabled people into work and reflects our current approach to improving services".

"But we recognise there is more to do, which is why we are reviewing our employment programmes for disabled people to ensure they deliver the best possible services, tailored to individuals' needs, as well as value for money," she added.

"Since 1997, we have directly helped at least 280,000 disabled people into jobs and increased the employment rate of disabled people by seven percentage points.

"We are building on this success with proposals in our forthcoming green paper which will help more disabled people into work.

"Already our focus on helping more people on incapacity benefit into work is proving successful.

"Early signs show twice as many people are progressing into work in our Pathways To Work pilot areas."

But shadow work and pensions minister David Heathcoat-Amory said more use should be made of voluntary organisations.

"In light of the weaknesses highlighted in this report it is clear that more must be done to achieve the maximum potential of our disabled people," he said.

"We believe in mobilising the voluntary and commercial organisations who are far more successful in helping disabled back into work than the government.

"This kind of specialist assistance is desperately needed and is vital to boosting the prospects of disabled people, by helping them into the labour market in a sensitive and compassionate manner."

And Liberal Democrat spokesman Danny Alexander said work and pensions secretary David Blunkett should spend less time chasing headlines and more promoting the benefits of disabled staff to small businesses.

"Investment in helping the disabled back to work must be a key part of the welfare reform package," he argued.

"This report shows that where individually targeted help and support is available, disabled people can be helped back into work.

"With one million disabled people across the UK wanting to work, there is a need to invest in high quality support and advice across the whole country.

"Mr Blunkett seems more interested in courting dramatic media headlines that denigrate and stereotype many incapacity benefit recipients than proposing effective measures to help those people back into work.

"The government would be better off publicising the Access to Work programme to help employers make adjustments in the workplace. It is a scandal that three quarters of small firms know nothing about this scheme."