Five disabled people are in court today, seeking to take the government's decision to scrap the independent living fund to judicial review. I have a good feeling about it; I can picture Iain Duncan Smith, stomping away from reporters in a fortnight's time, looking like he has a mouthful of ash, clarifying huffily: "We haven't lost, we merely didn't win."

But while awaiting the verdict, let's recap: this fund is worth £320m a year, is run through the Department for Work and Pensions, and is there to make it possible for people with severe disabilities to live in the world, rather than in one room. About 18,000 people are on it; without it, they'd be reliant on the local authority care package. Anne Pridmore, who has cerebral palsy, remembers that the last time she was surviving on only what her local authority would provide, she had to have a hysterectomy because they wouldn't fund anyone to keep her clean. Mary Lavers, who has had rheumatoid arthritis for 25 years, has seen what her council's care package looks like; it doesn't have enough visits in it for loo breaks, so she'd end up sitting on a wet incontinence pad for much of the day.

The DWP's defence is that the money will be passed on to local authorities, but it isn't ringfenced, so they could spend it on anything. That isn't intended as a slur on local government – they are the most squeezed by "austerity", indeed, the cuts only seem to be hitting the benefits bill and local authorities. Well over half of a council's budget goes on adult and children's social care, which is what disability support comes under. By 2015, councils will have taken a 41% cut on average, and this money will overwhelmingly have been cut from social care budgets.

Consequences are everywhere you look – Kensington and Chelsea council has already been taken to court for reducing the night carer allowance on a young woman's package, telling her to use incontinence pads instead (she wasn't incontinent). The decision was fought all the way up to the supreme court, where it was upheld. One of the trustees of a major charity had her carer budget reduced and could no longer attend trustee meetings.

It is pretty obvious to most disabled people, and indeed to most local authorities, that the ILF money – if it does come to local authorities – will not be maintained for its current purpose. There's a £1bn shortfall even now between what councils can provide for disabled people and what the law requires of them (they're covering this by reducing care allowances for moderately disabled people, but they can't prune that back for ever). The £320m will most likely just disappear into that black hole.

It could not be plainer: times are bad for local authorities, and disastrously bad for disabled people. This isn't about Atos assessments and the people on a knife-edge of eligibility criteria because some box-ticker decides they're not trying hard enough (though those people are having a tough time too). This isn't about the bedroom tax (though that's bad enough). This is about the most severely disabled people in society, people whose disability brooks no ambiguity, having money stripped from them until they can no longer live dignified, fulfilling, stimulating lives.

Disabled people with the greatest needs make up 2% of the population, and yet they are weathering 15% of the cuts. By 2015, the combination of measures targeting this group will amount to losing more than £8,000 each a year. It's the difference between being a trustee of one of the country's most dynamic charities, and having to go to bed at 5.45pm – because that's when your 15 minutes of care has been allocated.

At first glance, it looks as though the Treasury and the DWP between them have simply decided that they can no longer afford dignity in disability. But the alternative is no cheaper. Simply on a practical level, if people aren't looked after properly their needs increase. If they don't have the basic support they need to socialise, they lose a lot of the additional support, that free emotional and practical support that we call "having friends". They get depressed. They get bedsores. They need district nurses and mental health services. They will end up in residential homes, the solution which has the distinction of being both the most expensive and the most feared.

But the expense is even greater when you consider what you lose as a society: each of the people going to court today has had an active life, as enriching to their communities as it has been fulfilling to them. They've done jobs and voluntary work and fought campaigns and won them; they've brought other people into the thick of society who would otherwise have been isolated. There is a kind of Keynesianism of human energy, where every one person who thrives generates possibilities for someone else.

Saving money in this area does not save real money, therefore; it saves wooden dollars, which pop up as a cost elsewhere, and the political statement is much deeper than "we can no longer afford disability rights". The political statement, here, is "we can no longer afford for people to be disabled".

This is a massive shift in perspective from any political party, let alone one in government – and before they go any further along this path, whether they lose this judicial review or not, it's time to ask: well then, what's your plan? What's your plan for these people whose lives we apparently can't afford?

Twitter: @zoesqwilliams

• This article was amended on 14 March 2013. It originally referred to Kensington and Chelsea council losing a court case over a reduction of night carer allowance. In fact the supreme court ruled in the council's favour. This has now been corrected.