The Department for Work and Pensions (DWP) spent £187 billion last year – more than any other government department. Efforts to cut welfare spending in recent years have seen support fall behind living costs, yet DWP spending continues to rise.
Because 97 per cent of DWP’s budget is demand-driven, the best way to reduce benefit expenditure is to reduce demand for it. The Treasury Select Committe has dubbed the state pension financially “unsustainable”. The disability employment gap hasn’t changed in over a decade. And spending on housing benefit has doubled since the early 2000s, yet has not kept pace with the cost of private rents.
Spending on housing benefit, support for working-age disabled people and the state pension together exceeded £150 billion last year. Addressing these three key challenges is crucial to tackling the underlying drivers of welfare spend and ensuring the welfare system can function as an effective safety net.