What's the deal with the UK's welfare cuts?
Yesterday’s Spring Statement along with the changes announced by the Work and Pensions Secretary last week sets out welfare policy reform.
Here are the headlines- looking at a time horizon of 2029-2030:
£4.8 billion saved through cuts
£1.4 billion invested to support return to work
Net savings of £3.4 billion in 2029-2030
What is being cut?
1- The Universal Credit (UC) health element will be frozen for existing claimants, and reduced, then frozen for new claimants. This is estimated to affect around three million families. This is partially offset as all 6.5 million families on UC will receive an increase in the standard allowance, and the work-capability assessment gateway to Employment and Support Allowance and UC will be loosened.
2- Thresholds to claim the daily living element of Personal Independence Payment will be increased, pending further review - estimated to affect around 800 000 claimants
3- Welfare eligibility reassessments will be restarted for certain cohorts of claimants
4- In addition there will be savings made through a crackdown on welfare fraud and error
What is being invested?
Additional employment, health and skills support from 2026-27, scaling up to £1 billion a year by 2029-30, to a total of £1.4 billion. Note, this also includes spend on tax and welfare compliance.
Lara’s take
Psychosocial factors, including financial security can impact on people’s functional ability to work during ill health. This does not undermine the symptoms they are living with, rather reflects a complex and evidence based biopsychosocial model of health that has a bearing on symptoms and function. I see this in frontline occupational health practice. Workplace health support, when pitched well, including organisational factors like occupational sick pay scales can help people return to work following periods of ill health. So, it is possible that moving thresholds to welfare can achieve reductions in economic inactivity due to ill health. HOWEVER. Moving thresholds to welfare cannot be an isolated approach. In isolation, these policy changes are high risk, and could affect vulnerable people and in some cases, their dependents too. The focus must be on exactly how the new investment pledge meets these changes.
This is the critical factor. Investment needs to be adequate, high quality and high speed in order to sync with the changes to welfare. Investment must increase access to expertise, including occupational health- which currently less than 50% of working people have access to…let alone those on long term welfare support. Investment must reflect the dynamism of workplace change as new technologies come on stream, helping people work alongside technological advances to amplify their skills and strengths. Support must not be one off and tokenistic but holistic and longitudinal.
There will be a psychosocial fall out to benefits cuts. To avoid disastrous consequences (there are harrowing examples of this in the press) these changes must be managed with attention, preventative and responsive care and strong safety nets for the most vulnerable in our society.
