Report

Change the prescription: update

This report from UK think tank the Centre for Social Justice builds on their landmark report, to offer a new plan to all political parties.

Few issues are as explosive in British politics as welfare reform. But just as the smell of cordite following the blazing row over winter fuel payments is wafting away, an even bigger battle on benefits looms on the horizon.

This conversation is long overdue. Since 2020, the number of households where no one has ever worked has doubled. The working-age welfare bill – driven by a surge in long-term sickness and disability claims – is set to hit £131 billion by 2030. This is not a trend matched by other countries, the IFS point out, while the two-thirds increase in health benefit spending since 2019 has not obviously improved outcomes for anybody.

Indeed, as the CSJ’s Social Justice Commission heard from grassroots charities last year, the system increasingly “rewards” ill health. Yes, Universal Credit transformed and simplified the benefit system, helping thousands into work pre-pandemic. By 2019 we had the lowest rate of workless households since records began. But with post-Covid assessment practices, once all the wider benefits are added up and the exemption from the benefit cap applied (as is the case for those deemed unfit to work), welfare can now provide a standard of living comparable to the average post-tax wage. This isn’t fair for claimants or taxpayers.

Liz Kendall has shown political courage in grasping the nettle of welfare, but the Government’s approach (as with winter fuel payments) risks accusations of being “Treasury-brained” – that is, focused on short-term savings that can be scored by the OBR. After a plan to simply freeze PIP was dropped, ministers opted to raise the threshold for eligibility. The result? Over 1.3 million people face losing cash support, including thousands of people with complex physical conditions. According to DWP assessments, three in four PIP claimants with arthritis, two in three with cardiovascular disease, and even a third with cancer could lose out.

One minister has already resigned over the plans. But it is all too easy to say we need to control welfare costs and help more people to become independent and move into work without saying how. Here, we build on the CSJ’s landmark Change the Prescription report, to offer a new plan to all political parties.