Labour are being urged to not carry out sweeping cuts to disability benefits, including to Personal Independence Payments (PIP), as it poses “significant risks”.
The Institute for Public Policy Research (IPPR) has warned the Department for Work and Pensions (DWP) about the pitfalled associated with the rumoured payment cuts.
Treasury officials are understood to have asked Government departments to identify cuts of up to 40 per cent in their spending ahead of Chancellor Rachel Reeves’ Spring Statement on March 26.
Senior sources across Government told ITV they have been instructed to identify the 20 per cent of spending they consider “lowest priority”, with some asked to find even deeper cuts.
The DWP is said to be drawing up plans to overhaul disability and health benefits, targeting billions in welfare savings.
A Downing Street source acknowledged departments were being asked to “deprioritise” spending.
The Treasury indicated departments are undergoing a “zero-based spending review” with line-by-line scrutiny of expenditure.
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The Government is under fire over its rumoured cut to disability benefits
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“Clearly the world has changed a lot since the Autumn Budget. People are watching that change happen before their eyes,” a government source told the BBC.
The Office for Budget Responsibility (OBR) has said it will reflect this “changing world” in its upcoming forecasts.
The DWP is planning significant changes to disability benefits, with a green paper proposing to “significantly reduce” the number of people judged unable to work.
Avnee Morjaria, an associate director for public services at IPPR, is sounding the alarm over the potential impact this rumoured DWP overhaul will have on everyday Britons.
Morjaria said: “The cuts that are being trailed today would come with significant risks. Some public services are already in crisis, and further cuts could undermine Government commitments on health, education, crime and more.
The think tank cautioned that a “cuts first” approach could worsen child poverty just as the Labour prepares its new child poverty strategy.
“We know that the Government will be judged on public services and whether families feel better off – cuts will make both more difficult to achieve,” Morjaria added.
Cabinet Office minister Pat McFadden and Health Secretary Wes Streeting are set to announce a significant efficiency initiative within the civil service ahead of the Spring Statement.
The Chancellor is expected to argue that the Government’s plan was always to “fix welfare to get people back to work” and “make the NHS more productive”.
Changes to the Work Capability Assessment will mean fewer disabled people receiving higher benefit levels, with many more expected to search for jobs.
The previous Conservative government had planned changes to the Work Capability Assessment that would have resulted in around 450,000 fewer people being considered to have limited capability for work.
Labour is believed to be pursuing even larger cuts, with reports suggesting the Treasury aims to save as much as £5bn from welfare spending.
Justice Secretary Shabana Mahmood defended the approach, saying: “There’s a moral case here for making sure that people who can work are able to work and there’s a practical point here as well, because our current situation is unsustainable.”
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The government argues these changes are necessary as health-related benefits are forecast to rise to £100billion before the next election.
Potential changes to PIP could include overhauling the assessment process, with one model under consideration following Norway’s approach where claimants provide GP letters rather than attending face-to-face assessments.
While not ruled out by Labour ministers, concerns remain about a possible shift to vouchers instead of cash payments, which Disability Rights UK previously called “insulting” and “dangerous”.
