DWP plan for £3bn benefit cuts to Universal Credit and ESA will 'ramp up misery'

A benefit claimant walking into a jobcentre
-Credit: (Image: PA)


Labour's plans to cut sickness benefits and increase sanctions for people who refuse to get a job have been criticised for failing to break down employment barriers. Campaigners say imposing tougher penalties on those who fail to undertake training or work will just "ramp up misery" on low-income households who are already struggling.

A new Get Britain Working white paper is due to be published on Tuesday, November 26, setting out measures to reform the DWP and jobcentres. Under the proposals, Britain's network of high street jobcentres would be transformed from their current role as benefit monitoring centres into a new national employment service.

Work and Pensions Secretary Liz Kendall said: "Thousands of employers are desperate to recruit, and millions of people are desperate to earn money and get on in their jobs but both sides are being failed by a system that is not fit for purpose. That is why we will bring forward the biggest reforms to employment support in a generation. This includes overhauling our jobcentres into a genuine public employment service, open to everyone who wants to use it and is the go-to recruitment centre for businesses."

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Labour's radical new plans are expected to trim the benefits bill by up to £3 billion and come as it emerged nearly 2.8 million people are not working due to long-term sickness and are instead claiming incapacity payments. This additional financial support is available as benefit top-ups on Universal Credit or ESA (Employment and Support Allowance) for those who have limited capability for work on medical grounds. An additional 1.5 million people are unemployed, while almost one million young people are neither in employment nor education.

However, disability campaigners have criticised the planned benefit cuts and the plans to impose more sanctions on those who fail to take up work or training opportunities. They say removing the barriers that stop people moving into work is more important than focusing on savings and sanctions.

James Taylor, executive director of Strategy at disability equality charity Scope, said: "We agree disabled people should have the same chances and opportunities to work as everyone else. Personalised and comprehensive employment support could be transformative for so many disabled people. But the government must fund it well and commission the right organisations to deliver it.

"Pressing ahead with the previous government's planned cut to disability benefits will leave disabled people financially worse off and further from work. Over the years we have seen the repeated tightening of sanctions and conditionality ramp up misery, which has done little to improve the number of disabled people in work.

"We'd urge the Secretary of State to take a fresh approach to supporting disabled people into work. By spending time listening to their experiences, and understanding the barriers they face that a focus on overall budgets and sanctions won’t solve."

The Work and Pensions Secretary has confirmed Labour will stick to a commitment under the former Tory administration to reduce benefit spending by up to £3 billion over five years by making changes to the work capability assessment that decides if someone is medically fit enough to get a job or instead receives incapacity payments. The party says it will bring forward its own ways of achieving this and has not yet outlined what these measures would entail.

Policy in Practice says proposed changes to the work capability assessment could yield savings of £2 billion to £3 billion by reducing the number of people eligible for sickness payments. It reckons around 450,000 people could lose their eligibility for this extra cash and that approximately 15,000 individuals would instead move into work as a result.

Analysis by the Resolution Foundation in its Budget briefing document calculates that changing the work capability assessment would save around £2 billion while the Chancellor's restrictions to the Winter Fuel Payment will save another £1.7 billion. In addition, accelerating the migration of claimants from Employment and Support Allowance onto Universal Credit is expected to save £0.5 billion. Together these would reduce the welfare bill by £4.1 billion by 2029/2030, the foundation said.

This is partly offset by an increase to the earnings threshold for Carer's Allowance, as confirmed in the Budget, which will mean additional spending of £0.2 billion because more people will qualify to receive the benefit. So there will be a net welfare cut of £3.9 billion in 2029-2030, the foundation concluded. It also noted that the benefit cap and the Universal Credit two-child limit have been kept in place and that the Local Housing Allowance used to calculate how much people get towards their rent while on benefits is to be frozen at the same level.

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