The spiralling benefit bill will wipe out all of the revenue from
the Chancellor's new national insurance hike, official forecasts
show.
Analysis by the Centre for Social Justice (CSJ) has found that
spending on working-age health and disability benefits is
expected to increase by over £19 billion by the end of the
parliament, well exceeding the £16 billion the Government expects
to net by raising national insurance on employers once indirect
effects are accounted for.
The cost of these benefits, which include incapacity benefits as
well as personal independence payments, are expected to rise by
£20 billion since the pandemic in 2019/20 – reaching £56 billion
in 2024/25.
But new forecasts by HM Treasury and the OBR show that
working-age health benefit spending pressures will continue to
soar over the course of the whole parliament. By 2029 we
will see a £3 billion deficit open up between the rising bill and
the additional national insurance tax take.
While the Chancellor has continued with reforms to the work
capability assessment announced by her predecessor, saving over
£5 billion from the welfare bill, proposals announced by the
previous government to reform disability benefits have been put
on ice.
The total number of economically inactive working age adults hit
nine million last year, with long-term sickness up by over
600,000 since the pandemic according to the Office for National
Statistics.
The CSJ is calling on the Government to announce radical reforms
to welfare and employment support to help get Britain back to
work, including:
Devolving the existing £6 billion employment support funding to
local authorities, mirroring the approach taken in the
Netherlands where economic inactivity fell by almost three times
the rate of the UK since 2010, and building on the Working Well
model pioneered in Greater Manchester by Mayor Andy .
Implementing the “Into Work Guarantee” – first recommended by the
CSJ in 2023 before being adopted by Labour Shadow Ministers –
which would enable benefit claimants with disabilities to try
work and return to their benefits if the job doesn't work out
within a set period.
Accelerating the migration of claimants on legacy sickness
benefits to Universal Credit, where they can receive extra
support back into work.
Andy Cook, Chief Executive of the Centre for Social Justice,
said:
“Liz Kendall is making the right noises on devolved employment
support and an Into Work Guarantee, but these forecasts show the
Government's fiscal plans crashing directly into a welfare
iceberg.
“Radical action is needed to address the epidemic of long-term
sickness and economic inactivity, starting by following the
successful example of the Dutch and handing responsibility back
to local communities so we can finally get Britain working
again.
“Our research shows that devolving employment support and
associated services along the lines pioneered in the Netherlands
would help 700,000 currently economically inactive people into
work.”
ENDS
MEDIA CONTACT
Matt Walsh
07754 786789
matthew@mippr.co.uk
About The Centre for Social Justice
Established in 2004, the Centre for Social Justice is an
independent think-tank that studies the root causes of Britain's
social problems and addresses them by recommending practical,
workable policy interventions. The CSJ's vision is to give people
in the UK who are experiencing the worst multiple disadvantages
and injustice every possible opportunity to reach their full
potential.
The majority of the CSJ's work is organised around five ‘pathways
to poverty', first identified in our ground-breaking 2007 report
Breakthrough Britain. These are: educational failure; family
breakdown; economic dependency and worklessness; addiction to
drugs and alcohol; and severe personal debt.
Since its inception, the CSJ has changed the landscape of our
political discourse by putting social justice at the heart of
British politics. This has led to a transformation in government
thinking and policy. For instance, in March 2013, the CSJ report
It Happens Here shone a light on the horrific reality of human
trafficking and modern slavery in the UK. As a direct result of
this report, the Government passed the Modern Slavery Act 2015,
one of the first pieces of legislation in the world to address
slavery and trafficking in the 21st century.
Our research is informed by experts including prominent
academics, practitioners and policy-makers. We also draw upon our
CSJ Alliance, a unique group of charities, social enterprises and
other grass-roots organisations that have a proven track-record
of reversing social breakdown across the UK.
The social challenges facing Britain remain serious. In 2024 and
beyond, we will continue to advance the cause of social justice
so that more people can continue to fulfil their potential.
