Cameron needs to check his figures on those ‘successful welfare reductions’

There are 400,000 more people on benefits than the DWP predicted in 2011


Last night David Cameron was interviewed on Newsnight about his planned welfare cuts. So far, we know that £2bn of the planned £12bn cuts will come from working age benefits, and that main pensioner benefits will be protected.

But this is not enough. As the IFS said last month:

“It is now almost two years since he announced his intention of cutting welfare spending by £12bn[…] the ‘plan’ is to have those £12bn of cuts in place by 2017-18. It is time we knew more about what they might actually involve.”

Newsnight presenter Evan Davies asked the prime minister where the rest of the savings would be coming from, and Cameron responded:

“Part of this is continuing with a programme that we’ve had. We have been getting people off what was called Incapacity Benefit and back into work. We’re going to continue with that, successfully reducing welfare –”

So, David Cameron appears to think that Conservative reforms to Incapacity Benefit have helped people get off welfare and into work. And this was certainly the plan; in 2011 the DWP forecast that by 2015 there would be about 2.1 million people on benefits, a reduction of half a million.

But this is not quite what has happened. Jonathan Portes, director of the National Institute for Economic and Social Research, (NIESR) provides statistics on his blog today showing how wrong these predictions were – and why Cameron cannot claim his reforms have been the economic or social success story he thinks they are.

The reforms to Incapacity Benefit meant the introduction of a new test, the Work Capability Assessment (WCA), and a new benefit, Employment and Support Allowance (ESA). As Portes points out, implementation of the WCA was rushed, resulting in many appeals and complaints and eventually a debilitating backlog:

“After falling fairly steadily from 2004 or so on, with a brief but not huge rise after the financial crisis, the numbers [on benefits] began to rise in mid 2013. There are now more than 2.5 million people on the benefit – fully 400,000 more than DWP expected in 2011.”

The result is that the planned £3.5 bn savings have not materialised, as this graph from the Office for Budget Responsibility demonstrates:

OBR new

Portes calls this “the biggest single social policy failure of the last 15 years”.

More importantly people are not, contrary to Cameron’s claims, getting back into work. The Work Programme, the government’s main way of helping people into work, has been fairly successful for young people.

But it has been a different story for ESA claimants. The latest statistics from the Centre for Social and Economic Inclusion (CESI) show that just one in 10 (10.2 per cent) of ESA claimants got a ‘job outcome’, below the DWP’s “minimum performance expectations. People with disabilities and those over fifty have the worst Job Outcome rates of all.

Commenting on their findings, CESI said:

“The recent fall is due to the changing pattern of Work Programme participants towards a higher proportion of ESA participants.”

For ESA claimants, the reforms have certainly not been the ‘success’ Cameron claims they were.

We are still in the dark about those welfare savings – Cameron did go on to rule out cuts to child benefit, but the previous night Michael Gove suggested these would be cut. And what’s more, Cameron still refuses to see the true picture when it comes to the economic and social success of his reforms to date.

Ruby Stockham is a staff writer at Left Foot Forward. Follow her on Twitter

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