Figures show that the DWP overspend comes despite debilitating cuts to working people and families.
Figures show that the DWP overspend comes despite debilitating cuts to working people and families
New analysis shows that social security spending by the Department for Work & Pensions has been £25 billion higher than George Osborne planned in this parliament.
The figures, commissioned by shadow chancellor Ed Balls and shadow work and pensions secretary Rachel Reeves, cast grave doubt over George Osborne’s ability to deliver the savings he has promised for the next parliament.
The £25 billion comes despite changes that have left families on average £974 a year worse off and despite recent falls in unemployment.
Osborne has been talking about making £12 billion more cuts to social security after the election, but he has overspent by more than twice this amount in parliament, according to the figures.
This means that if parliament had had a welfare cap the Tories would have breached it.
Analysis of the figures shows that the Tories have overspent by £1.4 billion on housing benefit for people in work; this is over four times the amount they have saved in housing benefit from people moving into work.
Furthermore, the number of people in work who need to claim housing benefits to make ends meet has increased by over 50 per cent since 2010, with this figure set to double by 2018/19.
The government has also spent over £8 billion more than they planned to on incapacity benefits, due to their chaotic delivery of reforms and failure to help disabled people into work.
Delays to the delivery of the Personal Independence Payment have meant uncertainty for thousands of disabled people, and have been a mounting cost to taxpayers, with £1.7 billion more spent than planned over the parliament.
And £130 million has been wasted on failed IT for Universal Credit, which is still reaching less than one per cent of its intended caseload.
In an article for Politics Home, Ed Balls and Rachel Reeves write that it is now clear that Osborne will ‘totally fail’ to balance the books in this parliament. They blame stagnant wages and low paid jobs for a shortfall in tax receipts and more borrowing.
According to Labour, vital support for families has been cut, with the introduction of the bedroom tax, cuts to tax credits for working families and cuts to maternity pay. But any savings from these decisions have been outweighed by the Tories’ total failure to tackle the root causes of rising social security spending.
They say that a key cause of the Tories’ overspending is their fundamental failure to make the economy work for working people, as well as mismanaged reforms at the DWP which have created a ‘culture of waste.’
In the article, Labour outline their plans to regain control of the situation:
”Labour has been clear that we need to control social security spending, and have committed to an overall cap on social security spending. But you can’t get the social security bill under control unless you’re tough on the causes of rising social security spending.
“That’s why Labour’s economic plan will tackle low pay and earn our way to higher living standards for the many, not just a few.
“Our approach is rooted in tackling the root causes of spending, boosting pay and tackling high housing costs.
“So our plan will make work pay by increasing the minimum wage to £8 an hour, introducing tax incentives for firms that start paying the living wage and expanding free childcare for working parents to 25 hours a week
“We’ll scrap the bedroom tax and shift funding from benefits to bricks by getting at least 200,000 new homes built each year and introducing stable rental contracts in the private rented sector.
“We’ll back the next generation by boosting apprenticeships and ensuring there is a paid starter job for every young person out of work for over a year – which they’ll have to take or lose benefits, paid for by a tax on bank bonuses.
“And we will get a grip on the shambolic management at the DWP, to ensure that we can deliver a fair safety net for all those who need it.
“Only a Labour government will be tough on social security spending by being tough on the causes of rising social security spending. That’s the way to back working people and get the deficit down in a fairer way.”
Labour’s plans include calling in the National Audit Office to review universal credit to ensure it delivers value for money and a better system for claimants. They also plan to better regulate disability assessments by introducing tougher penalties when contractors get decisions wrong, and ensuring a clear oversight of the process by disabled people themselves.
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