The UK government is looking to implement a £6 billion reduction in benefits, particularly affecting sick and disabled individuals, as Chancellor Rachel Reeves scrambles to curb the rising welfare costs.
This proposed change comes as part of her Spring statement, expected to be delivered later this month, as she works to balance the nation’s finances without raising taxes.
A major portion of the savings, approximately £5 billion, will be achieved by tightening eligibility requirements for Personal Independence Payments (PIP), a benefit that helps with additional costs caused by disabilities.
These payments, which can amount to as much as £9,600 per year, will also be frozen next year and not adjusted for inflation.
Furthermore, while individuals actively looking for work will see an increase in benefits, those deemed unfit to work will see cuts to their Universal Credit.
The Government’s Focus on Increasing Employment Among Disabled and Sick People
The government’s reforms aim to provide stronger incentives for people with disabilities or health conditions to stay employed.
While some benefits will be reduced for those unable to work, those actively seeking employment will receive more support.
According to ITV News, Labour is planning to invest £1 billion of the savings into employment support for job seekers.
Reeves defended the welfare cuts earlier this week, stating that reducing the welfare bill is the “right thing to do.”
She emphasized the need to find ways to manage the country’s finances effectively, as current spending on health-related benefits has ballooned to a staggering £65 billion.
The Chancellor also indicated that the government’s focus will be on tackling the issue of ‘NEETs’ (Not in Education, Employment, or Training), referring to the million young people who are currently unemployed, many of whom should be working.
Labour Defends Support for Those Unable to Work and Calls for More Jobs
In response to the government’s proposed cuts, Justice Secretary Shabana Mahmood appeared on BBC Radio 4’s Today program, arguing that it’s both morally and practically necessary to encourage people who can work to do so.
She also stated that the current welfare system is “unsustainable,” implying that significant reforms are required.
Meanwhile, Work and Pensions Secretary Liz Kendall is advocating for the funds freed up by the cuts to be reinvested into helping people return to the workforce.
Kendall revealed plans to deploy 1,000 existing Work Coaches to provide “intensive voluntary support” to around 65,000 sick and disabled individuals.
Kendall acknowledged the long-standing issues within the welfare system, explaining that many sick and disabled people have been told they cannot work, leaving them unsupported.
“But many sick and disabled people want and can work, with the right support,” she said, emphasizing that the goal is to reform the system and ensure that people can get into and stay in work.
She believes that these changes are vital for achieving the government’s goal of an 80% employment rate in the UK.
Rising Claims for Mental Health-Related Benefits Spark Debate
Introduced in 2013, Personal Independence Payments have seen a growing number of claimants, especially among those citing mental health issues such as anxiety and depression.
Recent data shows a significant rise in PIP claims linked to psychiatric conditions, with monthly awards for such conditions nearly doubling from 2,600 in 2019 to 5,700 by January 2024.
In response to this growing trend, a new report released on Friday suggests that young adults who claim disability benefits should be required to search for work in exchange for receiving their payments.
Former Labour minister Lord David Blunkett has endorsed this idea, calling for Personal Independence Payments to be made conditional for those aged 18 to 30 to address increasing joblessness among younger people.
Calls for Conditionality in Disability Benefits for Younger Claimants
The think tank Policy Exchange, which is center-right, argues that the current PIP system is placing a financial burden on taxpayers.
They warn that if the system remains unchanged, each taxpayer could end up paying up to £1,500 by 2028/29.
They also argue that the system is not incentivizing people to seek work, noting that PIP claimants are not required to provide medical evidence to claim the benefit.
Lord Blunkett, a former work and pensions secretary, has been vocal about the need for reform.
“What is absolutely certain is that for the sake of individuals, our economy, and the affordability of the system, radical and positive change is necessary,” he said.
Reflecting on the success of the New Deal for Young Unemployed individuals from 1998, he supports the idea of adding conditionality to PIP for those under 30.
Blunkett also pointed out that around 70% of those under 25 claiming sickness or disability benefits present with some form of mental illness.
He believes that a combination of improved support and clearer requirements would lead to better outcomes for claimants.
The Wider Debate on Welfare Reform
The debate surrounding welfare reform in the UK continues to intensify as the government seeks ways to reduce spending while maintaining support for those who need it most.
While many are supportive of efforts to reduce the welfare bill, others argue that the cuts, particularly those targeting sick and disabled individuals, will disproportionately affect vulnerable groups.
As the government moves forward with its proposed reforms, the focus will remain on striking a balance between providing adequate support for people with disabilities and health conditions while also encouraging greater participation in the workforce.