Budget 2012: Breaking down the benefits bill

On budget day, Richard Darlington, head of news at the Institute for Public Policy Research (IPPR), presents a detailed breakdown of the benefits bill.

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Richard Darlington is head of news at the Institute for Public Policy Research (IPPR)

George Osborne is hoping to make one thing crystal clear: what your taxes are spent on.

You have to look really hard at the pie chart release by the Treasury to even notice the overseas aid budget, but the welfare bill hits you full in the face. Every taxpayer will welcome such transparency. But what the new personal tax statements won’t do is breakdown the big piece of the pie chart called ‘welfare’.

So in case you were wondering, here is what your personal tax statement could have shown you, if it did:

That’s right, two-fifths (42%) of welfare spending goes on pensioners: a whooping £77bn in total. And more than 15% – £31bn – goes on children, via child benefit and the child tax credit. That’s almost £6 out of every £10 of welfare spending accounted for and, so far, not a “scrounger” in sight.

Then we’ve got another 10% going on support for disabled people – and this should not be confused with incapacity benefit, now called employment and support allowance, or ESA. A further 5% goes to carers and boosting the incomes of the working poor.

Only a shade over a 10th of the benefits bill – and a far smaller share of total public spending – is actually spent on directly replacing the incomes of those not in work, through jobseeker’s allowance, income support and ESA (£21bn in total). The remaining large items of spending are council tax benefit (£5bn) and housing benefit (£20bn).


See also:

Budget 2012: Tippex still wet on the coalition agreement 21 Mar 2011

Budget 2012: Impact per decile – the poorer you are, the harder you’re hit 21 Mar 2011

Budget 2012: It may do nothing for growth, but the fat cats will purr more loudly 21 Mar 2012

“According to my tax breakdown, Daily Mail readers are the biggest scroungers” 20 Mar 2012

The charts that shame the “we’re all in this together” coalition 16 Mar 2012


This is not an argument for exempting the benefits system from the important task of deficit reduction – still less fixing the benefits system as it is. We need a highly active, conditional welfare system that enables (and expects) people to take advantage of employment growth, when it returns.

But these reform issues must be addressed on the basis of facts and proper transparency would be a good start.


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43 Responses to “Budget 2012: Breaking down the benefits bill”

  1. Budget 2012: Good or bad? For the few or the many? Vote in our survey | Left Foot Forward

    […] See also: • Budget 2012: Breaking down the benefits bill 21 Mar […]

  2. Jos Bell

    check out the welfare bill – but not in the way the govt want us to see it http://t.co/11nEekNE

  3. Legal Aware

    check out the welfare bill – but not in the way the govt want us to see it http://t.co/11nEekNE

  4. Anonymous

    I’m disabled according to the DWP severely, could I work yes with a lot of help, but are employers will to give me a chance nope the only work given to me has been voluntary or working for the state, the NHS which is always short term contracts doing very little.

    between labour and the Tories I’m now a work shy scrounger, but hell it had to change labour is moaning again the hard hit are the squeezed middle, Labour or Tory the difference these days are the leaders, and for me Miliband just does not do it

  5. Mr. Sensible

    See how the tabloids choose to spin this one…

Comments are closed.