The UK government has unveiled a £1 billion package of welfare reforms aiming to get people with disabilities and long-term health conditions into work.
The reforms include scrapping the Work Capability Assessment (WCA), introducing a “right to try” work guarantee and reintroducing reassessments for those on incapacity benefits who may be able to work.
Work and Pensions Secretary Liz Kendall announced the measures in Parliament, describing them as the most significant welfare changes in a generation. She said that the system must protect those who cannot work while ensuring that those with the potential to do so are given appropriate support. The reforms aim to reduce economic inactivity, improve employment opportunities and tackle the rising cost of health and disability benefits.
The government noted the sharp increase in the number of working-age people receiving Personal Independence Payments (PIP), which has more than doubled since the pandemic. Without intervention, the number of PIP claimants is projected to reach 4.3 million within five years, at a cost of £34.1 billion annually. Overall, the health and disability benefits bill is forecast to reach £70 billion a year by the end of the decade.
Prime Minister Keir Starmer stated that the welfare system inherited from the previous government was “fundamentally broken” and left too many people without the opportunity to work. This statement comes days after new data from the Department for Work and Pensions (DWP) showed that 1.8 million people on Universal Credit are not receiving support to find employment.
From PIP to Universal Credit: Key Changes
One of the most significant changes is the removal of the WCA, which currently assesses a person’s capability to work. The government argues that this process has created barriers to employment and will be replaced with a new single assessment based on the PIP criteria.
To encourage more people to seek employment, the government is introducing a “right to try” work guarantee. This means claimants will not face reassessments or lose their benefits if they attempt to work. However, the government is also reintroducing reassessments for incapacity benefits with the aim to ensure those who can work receive appropriate support rather than being left on benefits indefinitely.
The reforms include adjustments to PIP eligibility, raising the minimum score required for the daily living element. Universal Credit will also be rebalanced, with an increase in the Standard Allowance. Additionally, access to the health element of Universal Credit will be delayed until age 22, with the savings redirected towards employment support for young people.
The £1 billion investment in employment support will include tailored support conversations for those on health and disability benefits, aimed at helping them find suitable work. The government is also consulting on improvements to the Access to Work scheme, which provides funding for workplace adjustments, such as assistive technology.
The government acknowledges that some people will never be able to work due to severe disabilities or long-term health conditions. These individuals will be protected through a new premium in Universal Credit and other measures, including extra financial support and the end of reassessments – although the details and eligibility criteria have yet to be finalised.
As a whole, the reform package is expected to save over £5 billion in 2029 to 2030, with OBR-certified costings of individual measures to be published at the Spring Statement on 26 March.
Reactions from Unions and Policy Experts
The reforms have been met with mixed reactions from unions, think tanks and policy experts.
Paul Nowak, General Secretary of the Trades Union Congress (TUC), welcomed some aspects of the plan, including the decision not to freeze PIP and the commitment to improving employment support. However, he urged the government to reconsider the scale of reductions.
“Millions of workers have been left without proper support to move into work or progress in good jobs and too many people with disabilities or ill health have not had access to the support they need,” he said. “But change must be done in the right way. While we welcome the decision not to freeze PIP, this package will still lead to significant cuts in entitlements for some disabled people.”
Ben Harrison, Director of the Work Foundation at Lancaster University, expressed concerns that the reforms could prioritise short-term cost savings over long-term improvements. While he acknowledged the potential benefits of the tailored employment support package, he warned that some claimants could lose £40 per week as a result of changes to the health-related element of Universal Credit.
“Indeed, with several cuts to health-related benefits due to be introduced ahead of new employment support becoming available, those impacted may be left without the support they need, or find themselves with little choice but to opt in to insecure and low paid employment,” he said. “This could further impact their health and wellbeing and lead to them bouncing in and out of work and remaining reliant on the welfare system.”
Health Crisis
Avnee Morjaria, Associate Director for Public Services at the Institute for Public Policy Research (IPPR), supported the government’s focus on employment support and recognised the need for welfare reform. However, she said that the growing number of people on incapacity and disability benefits is linked to wider issues, such as NHS waiting lists and rising mental health conditions.
“The government is clearly trying to ensure its welfare reforms deliver the right support and incentives for those who can work to do so. But announcing changes in a rush to deliver savings will harm vulnerable people, many of whom depend on this support to live a good life in difficult circumstances,” she said.
The government argues that the reforms will help address the UK’s high rate of economic inactivity due to ill health, which is one of the highest in Western Europe.
