£4bn of expected disability benefits savings will not be delivered, study finds

By Jon Vale and Richard Wheeler2nd May 2017News EnglandBenefits, Disabilities, Government / Politics, News England, Welfare / Benefits, Welfare Reform

The Government has failed to deliver more than £4 billion in planned cuts to disability benefits, new analysis has found.

Senior Labour MPs accused the Tories of “creating further waste and expense” with their reforms to the system, forcing further cuts elsewhere in the welfare budget.

Office for Budget Responsibility (OBR) documents say the Government wanted the transition from disability living allowance (DLA) to personal independence payments (PIP) to cut spending by 20%.

Press Association analysis of welfare spending forecasts from the OBR shows more than £4 billion of anticipated savings on PIP and DLA next year will not have been delivered.

Forecasts from March 2014 anticipated £13.6 billion being spent on disability benefits in 2018/19.

But the same figures published alongside this year’s Budget forecast £18 billion being spent on DLA and PIP next year.

The rise in spending has been attributed to an ageing population and more payouts to those with mental health and behavioural conditions.

But it also comes as growing numbers of people fight decisions to reject them for PIP, with 161,000 people having decisions overturned since the benefit launched in 2013.

Shadow work and pensions secretary Debbie Abrahams said: “This analysis clearly shows that the Government’s social security cuts are failing disabled people.

“It is becoming increasingly clearer that these flawed Tory assessments only create further waste and expense.”

Frank Field, chairman of the Work and Pensions select committee, added: “Clearly the Government was as over-optimistic with PIP as it has been with universal credit.

“Its failure to deliver either project on time, as well as to achieve the savings it had assumed would be possible, has resulted in a series of cuts having to be made elsewhere in the welfare budget.

“One way of saving money, of course, would be to ensure a higher percentage of PIP assessments return accurate decisions.

“This would prevent both the immediate hardship among claimants as well as the need for lengthy, costly appeals which serve in many cases to delay justice.”

The Government now spends more than £50 billion a year supporting people with disabilities and health conditions, up by more than £7 billion since 2010.

This is around 2.5% of GDP and more than 6% of all Government spending.

A Department for Work and Pensions spokeswoman said: “We will always make sure there’s a strong safety net to provide the right support for disabled people, which is why many disability benefits are exempt from the benefit cap and were not subject to our welfare savings.

“PIP is still a new benefit and we are determined to ensure that it is rolled out effectively to get it right for claimants.

“We expect the number of claimants to grow over time, and it’s important that all claimants get the best possible support.”

Last year, then-chancellor George Osborne was forced to U-turn on a planned £1.3 billion cut to PIP, in a row which led to the resignation of Iain Duncan Smith as work and pensions secretary.

Kester Dean, a volunteer welfare adviser at the Salford Unemployed and Community Resource Centre, said: “They’re often a hatchet job, the assessments.”