Disability Living Allowance will not be reduced. All claimants will be given medical assesments from 2013.
Initial thoughts: Introducing medical assesments for DLA initially seems sensible. But it is based on a flawed assumption that there are many people claiming DLA who either do not need it or who are abusing the system.
If medicals are carried out by well trained, experienced medical professionals who understand and crucially are allowed to take into account the affects of fluctuating conditions this may be sensible. However, it will be a costly mistake to reassess many lifetime award claimants who have conditions which will never improve and likely to continue to degenerate.
However, should medicals be carried out in a similar manner to those for Employment and Support Allowance by companies like ATOS origin any potential savings will be drowned out by the vast cost of appeals. That does not take into account the huge personal cost to traumatised claimants, who will be the most vulnerable as those few fraudulent DLA claimants simply do not care & will find another way to abuse the system.
My suspicion is that these proposed changes to DLA are coming from an idealogical rather than practical position and in the long term will actually be more costly on both financial and personal levels rather than introducing any economic savings.
Updated, 1558: There is a more detailed look at the changes to DLA in today's budget over at Arbitrary Constant
Updated; 18.44 One claimant details her experiences of 'medical assesment'
Updated; 19.40 Thoughts on today's budget announcements about DLA from a mental health claimaint
Updated 23.06.2010 DLA:Clearing up Confusion