Work and Pensions Secretary Liz Kendall has confirmed cuts to the DWP bill, despite mounting backbench disquiet about the potential extent of the reforms. She revealed plans to get more people back to work and cut the rising cost of benefits.
This will include changes to Universal Credit, Employment and Support Allowance (ESA) and Personal Independence Payments (PIP).
Employment and Support Allowance (ESA) and Jobseekers’ Allowance(JSA) proposals
Jobseekers’ Allowance (JSA) and employment and support allowance (ESA) could be merged, in a new ‘time-limited’ unemployment insurance which will be paid at a higher rate, without claimants having to prove they cannot work in order to get it, the secretary said.
Work Capability Assessment scrapped
The “complex” and “time-consuming” work capability assessment for universal credit is to be scrapped in 2028.
The Work and Pensions Secretary said: “Going through the WCA is complex, time-consuming and often stressful for claimants, especially if they also have to go through the Pip (personal independence payment) assessment.
“And more fundamentally it’s based on a binary can-can’t work divide when we know the truth is that many people’s physical and mental health conditions fluctuate.
“The consultation on the Conservatives’ discredited WCA proposals was ruled unlawful by the courts. So today I can announce we will not go ahead with their proposals.
“Instead, we will scrap the WCA in 2028. In future, extra financial support for health conditions in universal credit will be available solely through the Pip assessment so extra income is based on the impact of someone’s health condition or disability, not on their capacity to work.
“Reducing the number of assessments people have to go through and a vital step towards de-risking work.”
Universal Credit changes
The Government will bring in a “permanent, above-inflation rise” to the standard allowance of Universal Credit as well as legislating to “rebalance” payments for the benefit, the Work and Pensions Secretary told the Commons.
Kendall says she knows there “will always” be those who cannot work due to the “severity of their disability or illness” and ensures the system will be there for those under “genuine need”. She says, however, that disabled people and those with health conditions who can work should have the same access to work as everybody else. “That principle of equality is vital,” she adds. She adds that many want to work with the right help and support.
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PIP to be reviewed
A total of 3.66 million claimants in England and Wales were entitled to personal independence payments (Pip) as of January 31 2025, according to new figures published by the Department for Work & Pensions.
This is up 12% from 3.27 million-a-year earlier in January 2024.
At the end of January 2020, before the start of the Covid-19 pandemic, the figure stood at 2.14 million.
It then rose to 2.36 million by the end of January 2021, 2.57 million by January 2022 and and 2.93 million by January 2023.
The current total of 3.66 million is 71% higher than the equivalent figure five years ago.
What is PIP awarded for?
The most common conditions among the 3.66 million claimants in England and Wales entitled to personal independence payments as of January 31 2025 were
- psychiatric disorders (1.4 million claimants)
- general musculoskeletal disease (691,000)
- neurological disease (467,000)
- specific musculoskeletal disease (437,000)
Disabling conditions involving psychiatric disorders accounted for 38.4% of claimants in January 2025, up from 35.0% five years earlier in January 2020, while general musculoskeletal disease accounted for 18.9%, down from 20.6%, and neurological disease accounted for 12.8%, down from 14.4%.
An increase in younger claimants since 2020
The proportion of personal independence payments claimants in England and Wales who are under the age of 30 has increased in recent years, from 14.5% of the total in January 2020 to 16.4% in January 2025.
People aged 30-44 made up 18.8% of the total in January 2020 and 20.9% in January 2025.
By contrast, the proportion of claimants who are aged 45-59 has fallen from 36.3% in January 2020 to 30.1% in January 2025, while the figure for 60 to 74-year-olds is broadly unchanged, rising very slightly from 30.5% to 30.9%.
Labour backbenchers have voiced concerns
There has been mounting unease on the Labour Party’s backbenches ahead of the changes.
York Central MP Rachael Maskell said before the announcement she would be concerned if the Government changed the eligibility criteria to claim PIP.
Labour Greater Manchester mayor Andy Burnham warned that changes to eligibility and support while leaving the system as it is would “trap too many people in poverty”.
Reports suggest the scale of the backlash prompted a rethink of plans to freeze the level of PIP rather than increase it in line with inflation, delivering a real-terms cut to 3.6 million claimants.
Why are the changes being brought in?
Ministers insist that reform is necessary, given the number of people in England and Wales claiming either sickness or disability benefit has soared from 2.8 million to about 4.0 million since 2019.
The benefits bill has risen with this increase, reaching £48 billion in 2023-24, and is forecast to continue rising to £67 billion in 2029-30.
Number 10 has denied that the plans are purely as a result of the UK’s difficult fiscal situation.
Chancellor Rachel Reeves is set to deliver a spring statement on March 26 against the background of a faltering economy and drastically reduced headroom against the debt rules she set herself in October.
“I think the Prime Minister has been clear there is both a moral and an economic case for fixing our broken social security system that’s holding our people back, and our country back,” the Prime Minister’s official spokesman told reporters.
