An economist who helped to design the Employment and Support Allowance (ESA), which was introduced (by former Work and Pensions Secretary,James Purnell)to replace Incapacity Benefit in October 2008, has warned that the scheme is in danger of collapse unless radical reforms are implemented.

In a recent report by The Times newspaper, Professor Paul Gregg, an economist at the University of Bristol, says that the government should suspend plans to move 2.5 million Incapacity Benefit claimants on to ESA in October because serious errors need to be rectified. Professor Gregg told the paper:

"To go ahead with these problems is not just ridiculous, it is in fact scary." He added: "Introducing the ESA system for new claimants in 2008 was effectively a pilot, and all the signals from the pilot are that a lot of adjustments need to be made. There are serious problems with putting people who failed the test but still have serious health issues straight on to Jobseeker`s allowance, where there is no special help."

Since October 2008, all new claimants who suffer from ill health, have had to apply for ESA which includes a stricter medical test. More than two-thirds of applicants are failing in their claims. On average only 5% of claimants are deemed unfit for work and eligible for the ESA. A further 13% are referred for "work-related activity" but are still able to claim ESA, while 39% are judged fit for work, and the rest do not pursue their claims. Under the new rules, many claimants have been deemed fit for work while suffering from Parkinson`s Disease, Cancer and Multiple Sclerosis. In one case, which The Times referred to, a woman who could barely walk or breathe was judged fit for work just five months before she died of lung cancer.

The new medical tests (50,000 a month) are being undertaken by doctors and nurses employed by Atos Healthcare, a private company. On average it finds that only 5% of claimants are unfit to work. However, around 8,000 people a month are now appealing against these decisions at the tribunals and almost half are winning their cases.

In October 2009, a Manchester GP, Dr. Tim Greenaway, wrote to The Guardian about three of his patients who had all been refused ESA. One patient was psychotic, another patient who had been tortured in Iran suffered from post-tramatic stress disorder, and another patient was an alcoholic. In his view none of them were fit for work, but as he pointed out, the Department of Work & Pensions, no longer asks GP`s for their opinion.