What are the real numbers behind the welfare debate?

Passionate debate about reforms to social security for those with long-term illness or disabilities throws up many claims and counterclaims about the health of the nation and Britain’s welfare state.

- SEAN O'GRADY

A broad national consensus exists in favour of “welfare reform” - but that’s about as far as agreement goes, as shown by the deep divisions in the parliamentary Labour Party. A starting point might be to face up to the sheer scale of the challenges, and try to put them into some sort of fair context.

How much do sickness and disability benefits cost?

These are some of the easier numbers: incapacity benefit (not the main focus of the current debate) provides an income to those who find it difficult to work due to ill health. In 2023-24, the government spent £24.9bn on this. It is being replaced by employment and support allowance (ESA) for new claims.

Disability benefits cover extra costs of daily living and mobility associated with disability and long-term health conditions, regardless of whether an individual is working or not; these are not means-tested but are assessed under a points-based system that many say is inhumane. Payments are made under the historic disability living allowance, which is being gradually replaced by the personal independence payment; these amount to some £19bn a year. The government was seeking to cut £5bn from this figure - quite a chunk for recipients, although tiny in the context of total public spending of some £1,300bn (or £1.3 trillion).

Thus, the combined cost of incapacity and disability benefits and payments is approaching £50bn - roughly the same as Britain’s defence budget, hence the claim of “warfare vs welfare”. But the state pension remains much the biggest - and politically protected - element of the wider social security system, costing about £145bn.

Are the costs going to go up?

Very much so. Some 1,000 people a day go on to PIP. Even after the government’s proposed reforms, spending is projected to jump by roughly 50 per cent a year to about £70bn in 2030 - an increase alone equivalent to the government’s research and development budget.