The long-awaited details of the Government’s plan to slash the benefits bill have been met with a mixed response.
While ministers argue that their actions will save the public purse £5bn over the next five years, critics contend that this sum does not take account to the full picture.
Advocacy groups are warning that these short-term savings could have long-term consequences that are not immediately visible and may be difficult to quantify, but could end costing the state more money.
Ministers have also been criticised for delaying the publication of an official impact assessment until next week’s Spring Statement, leaving many organisations scrambling to understand what these changes will mean for the vulnerable people they support.
“It just seems to be they’ve said, ‘We need to make cuts, we have to pick some changes to the assessment that will achieve a significant cut, and this is the figure we’ve landed on’…It just doesn’t really add up,” Tom Pollard, head of social policy at the New Economic Foundation (NEF) said.
Dan Paskins, director of UK impact at Save the Children, said it was “revealing” that there wasn’t an impact assessment and suggested there may be some “unpleasant details” when one is published.
The Government argues that reforming disability benefits will help more people transition into work, but critics fear that the opposite may be true. Reducing PIP entitlements may leave some disabled people without the financial support they need to participate in the workforce, ultimately forcing them to rely more heavily on other services.
David Finch, assistant director at the Health Foundation, has expressed concern over these changes. “Cutting benefit entitlements by reforming PIP eligibility and reducing entitlements for new Universal Credit health claims will leave vulnerable people worse off and risks making it harder for people with health conditions to move into work.”
He also warned that the proposed changes could create anxiety and financial insecurity, undermining the Government’s goal of restoring trust in the benefits system. Without adequate support structures, the transition into employment may become even more difficult for those affected.
Pressure on health services
Many campaigners have warned that restricting disability benefits could have unintended consequences for the healthcare system. The NHS is already under immense strain, and reducing financial support for disabled individuals may exacerbate health issues, increasing demand for medical services.
Brett Hill, head of health and protection at Broadstone, a pensions and benefits cosultancy, cautioned that the changes could indirectly worsen NHS pressures. “Mental health conditions are the largest driver of health-related inactivity among younger workers, while millions are still stuck on record-high waiting lists, waiting for consultations, diagnostics, or hospital treatment,” he said. “Until both issues can be fixed, the Government will struggle to make real progress in its aims to drive growth and productivity.”
Additionally, GPs are likely to see an increased workload as claimants seek further medical documentation from doctors to support their benefit claims. A 2024 survey by the Royal College of General Practitioners, published by The BMJ, found that 30 per cent of GPs were already spending up to a third of their time on administrative tasks related to benefits and housing applications. These additional pressures could divert resources away from frontline patient care.
The economic impact of benefit cuts extends beyond individual households. Reducing payments to low-income families could have a ripple effect on local economies, particularly in regions where reliance on state support is high.
Tom Pollard of the NEF warned: “You’re taking money out of the pockets of people in the poorest households in the poorest parts of the country, and those people have a high marginal propensity to spend. If you give money to poor households, they spend it in the local economy.
“You get stuck in a bit of a kind of catch-22. If people got back into work, they’d have more money and the local economy would be more thriving. But there aren’t many jobs in this local economy, so it’s hard for people to get back into work.”
Businesses are already facing financial difficulties due to rising National Insurance Contributions (NICs) and other economic pressures, and there are concerns that a decline in consumer spending could further exacerbate financial instability in struggling communities.
Pushing families into poverty could mean another generation relying on state support
Advocacy groups warn that the proposed benefit cuts could push many families into prolonged financial hardship.
Dan Paskins, director of UK impact at Save the Children, has highlighted concerns that restricting PIP and incapacity benefits will leave families struggling to make ends meet. He noted that “the intersection between people who receive disability benefits and people raising a family obviously hasn’t yet had a lot of sort of detailed scrutiny.”
A key worry is that these cuts could increase the likelihood of children from affected families growing up in poverty, which may lead to long-term reliance on state support.
“It has a knock-on impact on children who are less likely to get opportunities at school and therefore get good grades. These things aren’t captured in the way that the government measures costs,” Paskins added.
With limited financial support, vulnerable households could face deeper hardship, creating further barriers to economic mobility.
Beyond the immediate impact of the proposed cuts, some experts warn that structural weaknesses in the benefits system will be further exposed.
Avnee Morjaria, associate director at the Institute for Public Policy Research (IPPR), noted that cuts to disability benefits could compound existing financial struggles for those on low incomes.
“Due to the local housing allowance freeze, benefit cap, two-child limit, and debt deductions, many Universal Credit recipients get less than the standard amounts that people are expected to live on,” she said. “For many people, PIP has filled the gaps in income created by these policies.”
With many individuals already struggling to make ends meet, there are warnings that losing disability benefits could leave thousands without sufficient financial support, further deepening existing inequalities.
The Government’s defence
The Government insists that these reforms are necessary to encourage more people into work, arguing that they will ultimately lead to better health and economic outcomes.
Prime Minister Keir Starmer insisted this week that those with the most serious conditions would not feel the brunt of the changes.
“Our reforms are guided by three principles,” he wrote in The Times. “First, if you can work, you should. Second, if you want to work, the Government should support you to make that a reality. Third, if you will never be able to work because of your illness or disability, the state should help you to get by with security, dignity and respect.
“So, nobody with a condition that means they will never be able to work will lose out from our changes. Nor will they have to endure the indignity and fear of endless reassessment – that requirement will be scrapped.”
However, with mounting criticism from economists, healthcare professionals, and advocacy groups, the full impact of these changes remains uncertain.
As the Government moves forward with its cost-cutting agenda, the coming months will determine both whether these measures yield the intended benefits and whether they create a new of problems.
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