Pathways to Work: Reforming Benefits and Support to Get Britain Working
Understanding the Need for Disability Benefit Reform
The Fiscal Context
The cost of disability benefits has surged over the last decade. In 2010, the UK spent £16.7 billion on disability benefits; today, that figure stands at £40 billion annually. There are two primary benefits:
- Disability Living Allowance (DLA) – for individuals with severe work limitations.
- Personal Independence Payment (PIP) – for those who can work but need extra support.
Unlike Universal Credit (UC), PIP is available to anyone, regardless of employment status. Additionally, those permanently unable to work due to sickness receive a health top-up under UC, which is more than double the standard UC rate.
Between 2010 and 2024, disability benefit spending increased by 160%. While factors like COVID-19 and NHS access issues played a role, the UK is unique in that disability rates continued rising post-pandemic, unlike other European nations.
A significant part of this increase stems from poor policy decisions.
Policy Failures That Drove Costs
Some of the biggest missteps include:
- Personal Independence Payment (PIP) Implementation
- Introduced by George Osborne to cut DLA costs, but it ended up costing billions instead.
- PIP aimed to reduce claims by 20%, but instead, more people qualified, and average awards were higher than DLA.
- Currently, 10% of the British workforce claims PIP.
- Cuts to NHS Mental Health Services
- Mental health-related PIP claims have skyrocketed.
- Many individuals find it easier to claim PIP and pay for private therapy than to wait for NHS treatment.
- Specific services, like CAT therapy for Autism, remain nearly inaccessible within the NHS but are funded through PIP.
- Lack of Coordination Between DWP and NHS
- The Department for Work and Pensions (DWP) failed to consider how its policies interact with NHS service availability.
- This oversight has driven unnecessary demand for disability benefits.
Despite polarizing political rhetoric, there is cross-party agreement that PIP needs urgent reform, as costs are spiraling out of control.
What the Government’s Proposals Mean
When the Conservatives left office, disability spending was projected to hit £70 billion during this Parliament. Under the new proposals, that figure is capped at £65 billion.
This is not an outright cut but a slowing of future increases, bringing the growth in disability spending in line with NHS funding growth.
The Government’s choices are shaped by past overspending, balancing between higher taxes (89% of the fiscal solution) and spending constraints.
Positive Changes in the New Plan
As someone with DWP and NHS experience, there are plenty of things I like about these proposals:
- Universal Credit Increase: A permanent above-inflation rise in UC will benefit 4 million families by £64 a month.
- “Right to Try” for Disabled Workers: Ensures that disabled individuals can attempt work without losing benefits if it doesn’t work out. This eliminates a major barrier to employment by removing the need to go back through the whole assessment process again to access benefits. This is a major gain. Combined with an enhanced package of workers rights this is a big step to help people back into the workforce
- Reduced Bureaucracy:
- No more unnecessary reassessments for those with severe disabilities.
- All new assessments will be face-to-face, preventing remote decisions that misrepresent claimants’ conditions.
- Work Capability Assessment (WCA) scrapped.
- £1 Billion Investment in Employment Support:
- Revamps Jobcentre Plus, shifting its focus from punitive sanctions to genuine employment assistance. I would however question whether JCP is the best place to spend this money – there are charities and other organisations better placed to support disabled people back into the workforce
Areas of Concern
- Freezing the Health-Related UC Top-Up
- Over time, this aligns disability benefits with standard UC payments.
- While it reduces incentives to claim incapacity benefits, it raises ethical questions about need-based support.
- Merging Jobseeker’s Allowance and Employment & Support Allowance
- Provides higher short-term payments for those who have contributed more. This should reassure workers who pay NI, but feel the system is unfair to those who pay in the most
- However, public perceptions of benefits are shaped more by media narratives than policy changes, limiting its impact.
Big Problems
- Sanctions System Remains Intact
- Despite recognising the flaws in the current system, the reforms do not abolish punitive sanctions. Too complex, too draconian, too expensive to administer. At their worst we are spending billions hiring civil servants to bully the poor and the vulnerable
- Freezing PIP for those in work to close the gap between those on UC who work, and those who can’t. Would it not have been much fairer to means test PIP for claimants who don’t qualify for UC?
- Tighter PIP Eligibility Criteria
- From November 2026, claimants must score four points in at least one category to qualify for daily living support.
- This excludes those who need help with:
- Meal preparation
- Personal hygiene (washing/dressing)
- Social interaction
- This sets a very high bar which lots of claimants won’t reach
- Around 1 million families could lose £4,000 per year as a result. Some of this are future claims that aren’t approved, rather than current payments which are cut. Until we have the full OBR modelling we won’t know how significant the impact is, but the bulk of the £5bn reduction in spend hits here.
The Bigger Picture
A central theme of recent Government policy is shifting resources from non-workers to workers. Between 2010 and 2014, economic growth disproportionately benefited non-workers, while real wages stagnated for taxpayers. These proposals are entirely consistent with the Governments plans to make work more attractive, increase participation in the workforce, and to grow the economy. Fighting to protect a cruel and broken benefit system, as some on the left are committed to do, is daft.
These reforms create more winners than losers, but the primary winners are low-income workers without disabilities, while the losers are disabled individuals unable to work due to gaps in NHS support.
In short, this is a green paper on disability that financially benefits non-disabled people the most.
The Role of Media and Public Debate
The media’s coverage of these changes has been appalling. There was a time when journalists understood the benefits system, but today, debates are sensationalized and misinformed:
- Right-wing rhetoric: All benefit claimants are “scroungers with big-screen TVs.”
- Left-wing outrage: Any attempt to reform a broken system is “cruel and unjust.”
- Social media amplification: Further fuels misconceptions and hysteria.
Lost in this noise is the lived experience of disabled individuals and those on benefits. Meaningful debate is drowned out by clickbait narratives and partisan posturing.
This article by former Shadow Chancellor an ex-Labour MP John McDonnell was particularly crass – at the time the article was written he hadn’t actually seen any of the proposals he was publicly condemning.
What happens next?
Although you wouldn’t know if from the media coverage this is only a green paper – these are proposals out for consultation, and it is possible that some areas will change. Even small changes to the PIP scores could make a huge difference to individual families. We are also still waiting for the full OBR assessment of the impact of these changes.
Reforming disability benefits is necessary, but some of these changes come at a high cost for vulnerable people. While policies like increasing Universal Credit and cutting red tape are positive, raising the bar for PIP eligibility risks worsening financial hardship for thousands.
This debate requires more nuance and less hysteria. Rather than viewing benefits purely through the lens of cost-cutting, we must ask: Are we truly supporting those who need it most?
And before the Government approves these cuts they should reflect on whether you can grow the economy by cutting people’s incomes? The poorest in society spend money locally, on essentials, and they have a high marginal propensity to consume. The multiplier effect of these cuts will be greater than the money the Government saved. For a Government set on growth this is an odd way to try and achieve it.
And for that reason, if no other, the Government needs to think again.
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