The United Kingdom faces a mounting worklessness crisis, with forecasts indicating a staggering surge in sickness benefits expenditure by over a third within the decade.
According to projections from the Office for Budget Responsibility (OBR), spending on health and disability benefits is set to skyrocket from £65.7 billion in the current fiscal year to a staggering £90.9 billion by 2028-29.
This alarming increase encompasses payments to individuals across various age groups, from children to retirees, grappling with health-related challenges. Particularly concerning is the sharp uptick in claims for mental health conditions and back pain across all demographics.
The OBR’s detailed forecasts underline the gravity of the situation. Spending on working-age adults alone is anticipated to reach £68.5 billion by the end of the decade, fueled by a surge in mental health-related claims, including anxiety and depression diagnoses.
 |
Get our essential daily HR news and updates. |
The forecast also paints a grim picture for child health and disability benefits, poised to nearly double to £6.2 billion by 2028-29.
Notably, claims related to behavioural disorders and learning difficulties among children have experienced significant upticks, with some categories witnessing triple-digit percentage increases.
Surge in mental health claims
The Work and Pensions Secretary, Mel Stride, sounded the alarm regarding the surge in mental health claims, attributing it, in part, to the classification of everyday anxieties as illnesses. However, his remarks have drawn criticism from medical professionals, with Dr. Lade Smith, president of the Royal College of Psychiatrists, rebuking Stride’s comments as diminishing and misrepresenting individuals with mental illness.
Amidst these concerns, public officials have sought to address the underlying issues contributing to the rise in claimants. Prime Minister Rishi Sunak’s spokesman emphasised the importance of destigmatising mental health discussions while acknowledging the necessity of tackling root causes.
However, the escalating benefits bill underscores broader economic challenges. The pandemic-induced increase in worklessness, with over 9.25 million working-age individuals classified as economically inactive, coupled with over 900,000 unfilled job vacancies, exacerbates the strain on taxpayers.
Furthermore, analysis by the Institute of Fiscal Studies (IFS) reveals a significant decline in living standards, particularly affecting middle and high-income households. Frozen tax brackets and soaring inflation have led to a 1.6 percent reduction in incomes since 2019, marking the largest setback to living standards in over six decades.
What role is the cost-of-living crisis playing?
While inequality has diminished due to across-the-board income declines, the overall impact on households, particularly the poorest third, remains dire. Rising food and heating insecurity underscore the pressing need for comprehensive policy interventions to alleviate the cost-of-living crisis.
In response, the government has highlighted welfare reforms aimed at facilitating employment opportunities and cutting taxes for workers. However, the magnitude of the challenges ahead necessitates concerted efforts to address systemic issues and uplift struggling households.
As the nation grapples with an escalating worklessness crisis and dwindling living standards, the imperative for effective policy measures to mitigate these challenges has never been more pressing.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
- Amelia Brand
- Amelia Brand
- Amelia Brand
- Amelia Brand
