Following interest in our most recent programme of learning disabilities research, we had the opportunity to meet with Sir Stephen Timms in May, then Minister of State (Minister for Social Security and Disability), ahead of the evidence deadline for the Timms Review of Personal Independence Payment.
The Timms Review is examining the future of Personal Independence Payment (PIP). Its call for evidence closed at the end of May 2026, and the steering group is now reviewing submissions over Summer, with a final report and recommendations expected in late Autumn 2026. The interim report was published earlier this month, and found that the disability benefits system is “not working”, saying that the process had systematic and deep-rooted problems and required bold and radical overhaul. It also indicated there would be no blank cheque and any changes it proposed in its final report to ministers later this year would have to be sustainable within current official PIP spending projections.
Although PIP has been replaced in Scotland by Adult Disability Payment (ADP), decisions made at a UK level remain highly relevant from a Scottish perspective. The funding transferred to the Scottish Government for devolved disability benefits is affected by a Block Grant Adjustment linked to comparable UK Government spending. This means that any potential changes which reduce projected spending on PIP in England and Wales could also reduce the funding available to the Scottish Government. If Scotland chose to maintain broader eligibility or more generous provision through ADP, the Scottish Government may then have to meet a greater share of the cost from within its existing budget. The proposed removal of the Work Capability Assessment as the primary gateway to the Universal Credit health element, and its replacement with eligibility linked to PIP, will also have significant implications for Scotland.
After the recent change of Prime Minister, and subsequent Cabinet reshuffle, Sir Stephen Timms took on a new role as Minister of State (Minister for Equalities) in the Ministry of Housing, Communities & Local Government and he remains as Minister of State in the Department for Work & Pensions. Presumably, this means he will retain responsibility for delivering the Timms Review, alongside his new equalities brief. Given the Review’s implications for disabled people and wider equality issues, there may be advantages in aligning these responsibilities within a single ministerial portfolio, although we will be keeping a close eye on developments ahead.
Our meeting with Sir Stephen Timms gave us the chance to talk through the evidence we were submitting to the review, as well as discuss findings from our research on the lives of people with learning disabilities, In this blog, we summarise the key elements of our contribution, including updated analysis on Scotland’s disability employment gap.
The disability employment gap
The disability employment gap in Scotland has narrowed over the past decade, with more disabled people now in employment than in previous years. On the surface, this appears to be positive progress towards the Scottish Government’s target of halving the disability employment gap by 2038. However, understanding why this change has happened is more complex than looking at headline employment figures alone.
The UK picture
The UK’s disability employment gap, defined as the difference between the employment rates of non-disabled and disabled people, has been steadily narrowing over the last decade. But what is contributing to this shrinkage?
In 2019, the DWP introduced an annual publication called The Employment of Disabled People. In this publication, they analysed four components of change which contribute to the disability employment gap:
- The number of people in the overall working population;
- The percentage of those people who are disabled;
- The non-disabled employment rate; and
- The disabled employment rate gap itself.
In their 2019 publication, the DWP explain that the disabled population is the product of the total working age population and the proportion who are disabled. The employment rate of disabled people is influenced by wider labour‑market trends and by differences in how those trends affect disabled people, measured through the employment rate gap.
The DWP assessed the impact of these four components by comparing current levels with 2013/14 figures, which are the earliest available using the Equality Act definition of disability. The Employment of Disabled People is now an annual publication: find the latest release here.
DWP’s analysis at the UK level shows that a significant amount of progress in closing the disability employment gap has been due to increased prevalence of disability – that is, people who were already in work are increasingly reporting disability, rather than out-of-work disabled people becoming employed.
The Resolution Foundation’s Opening Doors publication in 2025 calculated the UK’s prevalence-adjusted disability employment gap (DEG). The prevalence-adjusted DEG simply weights the disability employment gap by the prevalence of disability in the total population in the same year. The prevalence-adjusted disability employment gap has actually widened over time in the UK, from 5.4% in 2013 to 7.2% in 2025 (data from QLFS, July-September 2025).
What about Scotland?
Funded by SPICe in 2023/24, we replicated the UK modelling of the contribution of the four components above on Scotland’s disability employment. Our analysis used the latest data available from the Labour Force Survey, covering 2021-22, and compared these figures with those from 2013/14, the earliest year for which comparable data are available.
This year, we have updated our analysis with the latest data so that we can compare progress from 2013/14 to 2024/25.
There are a couple of benefits to updating this analysis. The first is simply more up to date information. The second relates to confirmed data issues in our original publication. Reduced response rates during the COVID-19 pandemic mean that 2021–22 data are now considered to be of relatively poor quality. For this reason, we don’t refer to the specific results of the first report in this blog and instead focus on the 2013-2025 comparison. You can check out our original report for SPICe via this link.
Components affecting the disability employment gap in Scotland
Chart 1: Components affecting the disability employment gap in Scotland
The disability employment gap in Scotland based on the latest data (July-September 2025) is 33%. Our analysis, summarised in chart 1, estimates that 73% of the change in the disability employment gap in Scotland between 2013 and 2025 is attributable to increased disability prevalence.
In other words, despite more disabled people being in work than a decade ago, most of that change reflects people who are already in work now reporting as disabled. For comparison, roughly 60% of the UK’s change in disability employment was due to the same component (DWP 2025) – a smaller effect than what we see in Scotland, but by no means insignificant.
We can also compare the prevalence-adjusted gap changes between Scotland and the UK. The prevalence adjusted disability employment gap in Scotland in 2013 was 6.6% – higher than the UK’s 5.4%. By 2025, Scotland’s prevalence adjusted gap rose to 8.8% (7.2% in the UK for the same period). So not only did our prevalence-adjusted disability employment gap start higher than the UK, but it has also widened further than the UK over the last 12 years.
The problem this finding presents is that increases in prevalence are likely to plateau at some point as data begins to reflect the true percentage of disabled people in our population. When that happens, reaching Scotland’s 2038 target of halving the disability employment gap will require a fundamentally different approach to help disabled people who are out of work to move into, and stay in, suitable employment.
Benefits’ interaction with employment
We also shared with Sir Stephen Timms the impact that benefit design can have on employment for disabled people, particularly people with learning disabilities, as evidenced from our work on the financial security of this population in Scotland. In our research, we found that many people with learning disabilities were experiencing significant financial insecurity. As a result, participants were already experiencing significant anxiety around any change to their benefits. Unclear guidance around the impact of starting or increasing work on disability-related benefits was actively disincentivising some participants from finding work or increasing their work hours: The Universal Credit (UC) health element could potentially be taken away if a ‘change in circumstances’ were to occur, which would leave participants financially worse off despite increasing their employment commitments.
Since our financial security research was completed, the UK Government have introduced the ‘Right to Try’ legislation which makes it clear that undertaking work or volunteering will not automatically lead to a reassessment of UC health element eligibility. However, increasing hours or pay may still trigger a reassessment.
It is not yet clear how the UK Government’s proposed approach to the UC health element, which would be based on “passporting” from PIP rather than assessment through the Work Capability Assessment, would operate in Scotland in the context of ADP. This could potentially affect the incomes of tens of thousands of disabled people in Scotland, and the uncertainty over how this will operate risks amplifying the fear and confusion documented in our research.
Why benefit design matters – and why it isn’t the whole story
The design of disability benefits is one piece of this puzzle. With devolved disability benefits in Scotland and the ongoing Timms review of PIP, the evolving policy landscape raises fundamental questions about how a disability income support system should be designed: How generous should it be? How should it interact with income and savings? And crucially, does it support disabled people to work?
As part of our ongoing research programme, we have been examining how other countries approach these questions and what the evidence suggests about the consequences of different design choices.
Lessons from Ireland
We began by looking at Ireland. Our ongoing study highlights some structural differences from the UK and Scottish approach.
Ireland’s disability benefit system looks structurally quite different from the UK. Where the UK separates disability support into two distinct payments (income replacement through the health element of Universal Credit, and support for the additional costs of disability through PIP or ADP in Scotland), Ireland relies primarily on a single means-tested payment called Disability Allowance.
In some respects, Ireland’s simpler structure has advantages. Its savings rules are more generous than the UK’s (and other social security payments in Ireland), allowing disabled people to retain modest savings without immediate loss of entitlement. While in practice many disabled people have limited capacity to accumulate savings, the approach reflects an acknowledgement of the need for financial resilience to meet unexpected costs.
But the Irish system also illustrates some of the tensions in disability benefit design. Because Disability Allowance is linked both to income and to assessed work capacity, it is tapered as earnings rise. Combined with the risk of losing access to secondary entitlements like free healthcare and free travel, this can make taking up employment or increasing hours feel financially risky, even when someone might be better off overall.
There is also limited employment support for people receiving Disability Allowance. Stakeholders we spoke to described people becoming “stuck” within the system and the data supports this: most people who leave Disability Allowance do not move into employment, they transition onto other social security payments, most commonly pensions. Ireland also currently lacks a separate payment to help with the additional costs of disability, although the Irish Government is considering introducing one.
What the wider international evidence shows
Ireland is not unusual in struggling with this tension. The broader lesson from international evidence is that no country has found a satisfactory way to combine adequate financial support with strong employment outcomes for disabled people. Every design choice involves considerable trade-offs and fiscal implications.
More importantly, across this work, and in other evidence including the 2025 DWP-commissioned review, it is increasingly clear that financial considerations alone cannot fully explain lower employment rates among disabled people.
The international evidence points to several other important factors:
- Disabled people need access to employment support that is suited to their condition, circumstances and level of need.
- Support needs to be offered early, soon after someone becomes ill or disabled, before they become disconnected from work.
- Employers need to be more involved and better supported to make reasonable adjustments and help people stay in work when their health changes.
- Employment policy needs to be joined up with the wider system. This includes disability benefits, health services, social care, employment support and local job opportunities.
Reforming benefit rules without addressing these wider factors is unlikely to sufficiently move the dial to close the disability employment gap.
As the Timms Review considers the future of PIP, and as the Scottish Government seeks to halve the disability employment gap, both should be grounded in this wider evidence. International experience shows there are no simple policy fixes. The evidence is clear on what matters: coherent system design, unavoidable trade-offs, and the importance of aligning benefits with employment, health, and support services if disabled people are to be enabled to move into and sustain good-quality work.
This post draws on ongoing FAI research on disability employment and benefit design. We will be publishing a paper summarising our findings in more detail later this year.
Authors
Chirsty is a Knowledge Exchange Associate at the Fraser of Allander Institute where she primarily works on projects related to employment and inequality.
Brodie is a Knowledge Exchange Associate at the Fraser of Allander Institute.
David is a Senior Knowledge Exchange Fellow at the Fraser of Allander Institute. Previously, he worked in a range of analytical positions across the public sector, primarily as a statistician.