The Department for Work and Pensions (DWP) is being urged to take ‘urgent action’ to reform the benefits system as costs continue to skyrocket. A new report has detailed a series of demands for multiple changes to the system, stating that too many lives are being wasted and vast sums of money are being spent, resulting in everyone losing out.
The House of Lords Economic Affairs Committee has called for a complete overhaul of the health-related benefits system. Following an investigation into the interaction between welfare and long-term sickness, they discovered that the current systems incentivise those out of work to apply for these benefits, and once received, there’s little motivation or support to find employment.
The committee stressed that their findings did not correlate with the notion that deteriorating health or overstretched NHS services were causing the surge in benefit claims. They are now urging the UK Government to devise a strategy to rectify the system’s shortcomings, warning: “If the Government does not do so, this growing area of welfare spending will remain a challenge for the forthcoming Spending Review.”
Lord Bridges of Headley, who leads the committee, emphasised the urgency of the situation, stating: “The health benefits system is financially unsustainable, wastes human potential and – in the words of the Employment Minister (Alison McGovern MP) – ‘does not work for anybody’. Given the pressure on the nation’s finances, tackling this must be a top priority for the Government.
“Urgent action is needed to reform both the unemployment and health-related benefits system, and how they interact. There should be more support to help those who are able to find and accept work – and to ensure that those who cannot work for a period are not abandoned to a life on benefits. Without a clear plan of action, growing welfare spending will remain a significant challenge for the forthcoming Spending Review.”
The committee’s findings, published in a letter to the Secretary of State for Work and Pensions, Liz Kendall, on Monday, included other conclusions, reports the Manchester Evening News. The full letter can be read online.
The committee said: “We see no reason to delay action. A wealth of analysis already exists on the issues we have raised and which offers credible solutions to the problems we have highlighted. We urge the Government to accelerate its plans to reform health-related benefits.
“If the Government does not set out how it intends to address these weaknesses, this growing area of welfare spending will remain a challenge for the forthcoming Spending Review.”
The committee said it had see no strong evidence to back up the claim that the Government targeting NHS waiting lists will have a serious impact on the number of sickness-related benefit claims. They also said if 400,000 people who are out of work due to ill health were able to find a job, it could save around £10 billion through higher tax revenue and lower benefit spending.
The committee also said approximately 3.7 million people of working age get health-related benefits, which is around 1.2m more than in February 2020. They say more money is now being spent on incapacity and disability benefits (almost £65 billion) than defence, and that figure is set to go up.
The committee revealed that it has collected evidence from the UK Government, the Bank of England, the Office for Budget Responsibility (OBR), and various policy experts. This evidence can be accessed online.