‘The Chancellor has an unenviable task but she does have choices’
The Joseph Rowntree Foundation and New Economics Foundation have warned that talk of cutting billions from the welfare budget “is causing deep fear among people with serious and ongoing health problems”.
Liz Kendall, the Secretary of State for Work and Pensions, is expected to announce the details of these spending cuts in a speech in the coming days.
Government sources have indicated that £5 billion in welfare spending cuts could be made, however, packages in excess of £10 billion have reportedly also been floated.
The government spent £65 billion on health-related benefits in 2023/24. The Office for Budget Responsibility (OBR) estimates this will rise to £100 billion by 2029/30.
New analysis by the JRF and NEF has outlined the consequences of potential welfare cuts on people who receive benefits.
It reveals that 50% of people receiving the health-related element of Universal Credit (LCWRA) are either unable to heat their home, behind on bills, or have low or very low food security.
In addition, the analysis found that 72% of people receiving LCWRA or PIP are in the lower half of the income distribution, rising to 89% for those only receiving the LCWRA component of UC.
The JRF and NEF warn that a £4 billion cut to the UC health-related element could either reduce the number of people in receipt of the benefit by 1.1 million or cut payments by 67%, or £3,400 per year.
Reducing PIP expenditure by £2 billion in 2029/30 would require at least 310,000 fewer people to be receiving PIP, or for the average PIP award to be 7% lower in value.
JRF Senior Policy Adviser, Iain Porter, said: “Many people will be waiting anxiously to hear what the government is planning in their upcoming green paper but talk of cutting billions is causing deep fear among people with serious and ongoing health problems.
“Almost a quarter of working-age adults in a family receiving these benefits have had to use a foodbank in the last year, and further hardship will do nothing to improve the nation’s health.”
Porter said that the government’s green paper needs to address the underlying causes of poor health, support people to stay in work and those who feel feel unable to take the risk of losing their benefits if a job doesn’t work out.
“The chancellor has an unenviable task but she does have choices, and in an increasingly uncertain world, the financial pain and risk shouldn’t be passed on to those who can least afford it in the form of cuts”.
Olivia Barber is a reporter at Left Foot Forward
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