The government plans to overspend £8.6 billion on benefits, prompting calls for reforms to the welfare system.
London: The government is facing an £8.6 billion overspend on benefits. Liz Kendall, the DWP boss, says radical reforms are needed to cut costs.
In Parliament, Kendall explained that the overspend is unavoidable. She blamed the previous government for the current situation. The economy is struggling, and Labour’s plans aim to reform welfare.
Since 2020, the number of Universal Credit claimants has more than doubled. It went from about three million to over six million. Additionally, 2.8 million people are not looking for work due to health issues, a trend worsened by the pandemic.
Kendall informed MPs that the overspend was expected since March 2023. She criticized the last administration for not taking action to prevent it.
She stated that the current government is willing to make tough decisions. However, severe cuts to welfare spending would not be the right approach.
The welfare cap limits government spending on most benefits, excluding the state pension. Labour’s Autumn Budget raised the cap from £146 billion to £162.5 billion, anticipating the overspend. By 2029/30, it could reach £204.2 billion.
In response, shadow work and pensions secretary Helen Whately emphasized the need for discipline in the welfare system. She noted that while jobs increased, so did economic inactivity, leading to a higher welfare bill.
Whately stressed the importance of addressing this issue for both moral and financial reasons. The DWP plans to release a paper on health and disability benefits soon.
Changes to health-related benefit assessments are expected. Labour aims to meet previous spending targets and cut £3 billion from the welfare bill.
The government will re-consult on these plans after a high court ruling deemed the previous consultation unlawful. Leading charities warn that the new consultation must be genuine.
Anela Anwar from Z2K expressed disappointment over the government’s plans. She urged the government to avoid repeating past mistakes and ensure proper consultation for those affected.
