Further £10billion to be cut from welfare bill
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Further £10billion to be slashed from welfare bill in bid to stop cuts elsewhere
By 2016 welfare payments will cost the public purse £230billion out of a total budget of £709billion
George Osborne yesterday revealed plans to slash a further £10billion from the ballooning welfare bill.
The Chancellor warned that unless urgent action was taken to curb spending on social security then other departments would see their budgets cut.
Treasury figures show that by 2016, welfare payments will cost the public purse £230billion – out of a total spending budget of £709billion.
Mr Osborne said the Government was determined to ‘confront’ the growing cost on the public purse at the next spending review.
If welfare is simply allowed to carry on rising, he said, the £10billion will have to be taken out of other Whitehall budgets to compensate.
Fresh cuts to benefits and tax credits would come on top of the current spending round, which has already seen £18billion axed from welfare.
Analysis suggests if welfare spending remains on its current course, other departmental expenditure will have to shrink by 3.8per cent in both 2015/16 and 2016/17.
That compares to a 2.4per cent reduction in the current spending review period. Mr Osborne praised Work and Pensions Secretary Iain Duncan Smith for overseeing a shake-up of the system in the face of ‘determined opposition from those who defend unlimited welfare’.
But he warned that even with those reforms, the welfare budget is set to rise to one third of all public spending.
Mr Osborne said: ‘If nothing is done to curb welfare bills further, then the full weight of the spending restraint will fall on departmental budgets.’
He added: ‘If in the next spending review we maintain the same rate of reductions in departmental spending as we have done in this review, we would need to make savings in welfare of £10billion by 2016.’
Among the ideas ministers are considering is a regional benefits cap – which could see claimants outside London getting paid less.
The controversial Welfare Reform Bill passed its final hurdle in the House of Lords earlier this month. The legislation brings in a £26,000-a-year household benefits cap and sets up the universal credit payment. David Cameron has said it marks an historic step in the biggest welfare revolution in more than 60 years.
Any moves to slash the welfare budget further are likely to be met with opposition. Church leaders and children’s charities led the outcry over the Welfare Reform Bill, claiming the measures would push thousands of families and vulnerable people further into poverty.
Shan Nicholas, interim chief executive of the Children’s Society, said: ‘This Budget has fallen a long way short of putting vital pounds into the pockets of low-income families.
‘Coming on top of cuts being introduced this year and next, [a further cut of £10billion] will make the future for some of this country’s poorest families even bleaker.’
Neil O’Brien, director of Policy Exchange, warned that ministers face a ‘real challenge’ finding the savings. He said: ‘Most of the easiest savings have already been banked and most of what is left would have to be targeted on removal of currently universal benefits; pensioner benefits or disability.
‘This leaves us wondering where the savings will come from and whether another storm between the Treasury and the Department for Work and Pensions is around the corner.’
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Source: Daily Mail, similar stories and same figures on most news sites.
By 2016 welfare payments will cost the public purse £230billion out of a total budget of £709billion
George Osborne yesterday revealed plans to slash a further £10billion from the ballooning welfare bill.
The Chancellor warned that unless urgent action was taken to curb spending on social security then other departments would see their budgets cut.
Treasury figures show that by 2016, welfare payments will cost the public purse £230billion – out of a total spending budget of £709billion.
Mr Osborne said the Government was determined to ‘confront’ the growing cost on the public purse at the next spending review.
If welfare is simply allowed to carry on rising, he said, the £10billion will have to be taken out of other Whitehall budgets to compensate.
Fresh cuts to benefits and tax credits would come on top of the current spending round, which has already seen £18billion axed from welfare.
Analysis suggests if welfare spending remains on its current course, other departmental expenditure will have to shrink by 3.8per cent in both 2015/16 and 2016/17.
That compares to a 2.4per cent reduction in the current spending review period. Mr Osborne praised Work and Pensions Secretary Iain Duncan Smith for overseeing a shake-up of the system in the face of ‘determined opposition from those who defend unlimited welfare’.
But he warned that even with those reforms, the welfare budget is set to rise to one third of all public spending.
Mr Osborne said: ‘If nothing is done to curb welfare bills further, then the full weight of the spending restraint will fall on departmental budgets.’
He added: ‘If in the next spending review we maintain the same rate of reductions in departmental spending as we have done in this review, we would need to make savings in welfare of £10billion by 2016.’
Among the ideas ministers are considering is a regional benefits cap – which could see claimants outside London getting paid less.
The controversial Welfare Reform Bill passed its final hurdle in the House of Lords earlier this month. The legislation brings in a £26,000-a-year household benefits cap and sets up the universal credit payment. David Cameron has said it marks an historic step in the biggest welfare revolution in more than 60 years.
Any moves to slash the welfare budget further are likely to be met with opposition. Church leaders and children’s charities led the outcry over the Welfare Reform Bill, claiming the measures would push thousands of families and vulnerable people further into poverty.
Shan Nicholas, interim chief executive of the Children’s Society, said: ‘This Budget has fallen a long way short of putting vital pounds into the pockets of low-income families.
‘Coming on top of cuts being introduced this year and next, [a further cut of £10billion] will make the future for some of this country’s poorest families even bleaker.’
Neil O’Brien, director of Policy Exchange, warned that ministers face a ‘real challenge’ finding the savings. He said: ‘Most of the easiest savings have already been banked and most of what is left would have to be targeted on removal of currently universal benefits; pensioner benefits or disability.
‘This leaves us wondering where the savings will come from and whether another storm between the Treasury and the Department for Work and Pensions is around the corner.’
___________________________________
Source: Daily Mail, similar stories and same figures on most news sites.
Of course it doesn't help the figures that all the civil servants they are dumping are not being snapped up by the private sector, which is instead shedding even more jobs as we head into the second dip of the recession, so the cost cutting in the civil service is just adding to the benefit bill.
MartG said:
Of course it doesn't help the figures that all the civil servants they are dumping are not being snapped up by the private sector, which is instead shedding even more jobs as we head into the second dip of the recession, so the cost cutting in the civil service is just adding to the benefit bill.
Well thats one factor obviously, theres little logic in sacking a civil servant on 20k a year to then end up giving them the same amount in benefits. Its clear the best way to bring this bill down is to get more people into work, thats obvious.The bigger problem though was mentioned in the article; all the easy savings have already been done, to save any more they have to start dipping into the universal benefits which can be extremely dicey for them politically. The out of work benefits like JSA actually only make up a slither of this bill, roughly half of that £230billion is pensions. Then you've got housing benefit, child benefit, disabled help etc, these are the big ticket items. Cameron pledged in 2010 there'd be no reduction in the winter fuel payments, but it looks like Downing Street may now reconsider as it looks to save money, that could be a dangerous move after already pissing off pensioners in the budget.
Up to now their 'benefit reforms' have been just fiddling round the edges. The benefit cap in its current form will save precious little money but cause a lot of headlines, they've mostly been making minor changes like limp wristed girly men. Theres no clear direction on what their principle is, no outline as to the definitive policy of the Government on what they feel money should be spent on and what it shouldn't be. To save this money they will have to look at free TV licencing for the elderly, bus passes, winter fuel payments and open a real debate as to whether child benefit should actually exist at all.
Choppy waters ahead. Very choppy.
martin84 said:
MartG said:
Of course it doesn't help the figures that all the civil servants they are dumping are not being snapped up by the private sector, which is instead shedding even more jobs as we head into the second dip of the recession, so the cost cutting in the civil service is just adding to the benefit bill.
Well thats one factor obviously, theres little logic in sacking a civil servant on 20k a year to then end up giving them the same amount in benefits. Its clear the best way to bring this bill down is to get more people into work, thats obvious.The bigger problem though was mentioned in the article; all the easy savings have already been done, to save any more they have to start dipping into the universal benefits which can be extremely dicey for them politically. The out of work benefits like JSA actually only make up a slither of this bill, roughly half of that £230billion is pensions. Then you've got housing benefit, child benefit, disabled help etc, these are the big ticket items. Cameron pledged in 2010 there'd be no reduction in the winter fuel payments, but it looks like Downing Street may now reconsider as it looks to save money, that could be a dangerous move after already pissing off pensioners in the budget.
Up to now their 'benefit reforms' have been just fiddling round the edges. The benefit cap in its current form will save precious little money but cause a lot of headlines, they've mostly been making minor changes like limp wristed girly men. Theres no clear direction on what their principle is, no outline as to the definitive policy of the Government on what they feel money should be spent on and what it shouldn't be. To save this money they will have to look at free TV licencing for the elderly, bus passes, winter fuel payments and open a real debate as to whether child benefit should actually exist at all.
Choppy waters ahead. Very choppy.
k 20k pa and getting a sliver of that back in tax is slightly better than a paid holiday and no tax.Rather than fiddling around the edges of all benefits and slowly turning most/all voters, what they really need to do is to look at all benefits, decide what will save a decent amount of money, while simultaneously pissing off the minimum amount of tactical votes & then go for the kill.
Stating the obvious, but sometimes they don't seem to realise that they'll never get anywhere in some places.
Bandit said:
It's not just paying public sector workers during their employment though is it? Then you've got the gold plated pension to pay for until the end of their days.
Exactly. Otherwise we are resorting back to Labours heavily flawed idea of giving everyone a job in public sectorPuggit said:
Johnnytheboy said:
As someone above said, good start.
It's not really a start, they haven't done it yet - this is politicians we are talking about!
turbobloke said:
£50bn of the welfare bill already goes to people on above average incomes, is that spending the country can afford to maintain? It amounts to ~25% of the total, and for what...these people pay tax and then get some back with a hefty admin charge on top that we all cough up for.
^^^^^^ this. Asking what can we cut is the wrong question, it should be why do we as a society pay this benefit. Old ideology needs to be ditched, and welfare should become nothing more than a safety net, with some strong motivation to get people into work. About time the economy and entire public sector was ran as an integrated system rather than in silos - poverty is best addressed by providing conditions where business and jobs can grow rather than giving handouts.So for example, we produce far too many NEET young people. - it is predictable at a very early age that a child will become NEET yet resources are only in place to take them off the NEET list rather than when it matters. Research shows NEETs are far more likely to drift into substance abuse, homelessness, health issues and crime all with an associated cost to taxpayers.
We can learn a lot from Demming and run society as a joined up system, it would just need to be implemented slowly rather than big bang.
Fresh thinking is needed rather than tinkering.
For these cuts to work, Cameron needs to accept that he won't be in power come the elections, and that he's going to need to piss a lot of people off. Then he can go to town (if he can get the cuts through the house of lords)
It winds me up that, after six years of recession, people still oppose spending cuts. Greed doesn't just exist at the high levels of society. What would be epic is if the top million richest people in the country donated big sums to the tax pot and shut up all the jealous finger-pointers up once and for all.
It winds me up that, after six years of recession, people still oppose spending cuts. Greed doesn't just exist at the high levels of society. What would be epic is if the top million richest people in the country donated big sums to the tax pot and shut up all the jealous finger-pointers up once and for all.
How about a radical reform of child benefit?
Rather than paying people who have children how about paying young girls NOT to have children? Say £50 per week from age 15-25 that stops being paid immediately the girl gets pregnant for the first time. Rewarding the behaviour that you want to encourage, rather than the current system of doing the opposite, might help reduce the number of teenage pregnancies with all of the consequent benefit implications.
Rather than paying people who have children how about paying young girls NOT to have children? Say £50 per week from age 15-25 that stops being paid immediately the girl gets pregnant for the first time. Rewarding the behaviour that you want to encourage, rather than the current system of doing the opposite, might help reduce the number of teenage pregnancies with all of the consequent benefit implications.
andyroo said:
For these cuts to work, Cameron needs to accept that he won't be in power come the elections, and that he's going to need to piss a lot of people off. Then he can go to town (if he can get the cuts through the house of lords)
It winds me up that, after six years of recession, people still oppose spending cuts. Greed doesn't just exist at the high levels of society. What would be epic is if the top million richest people in the country donated big sums to the tax pot and shut up all the jealous finger-pointers up once and for all.
Interesting idea but I feel that it wouldn't shut them up, before long they would be back asking for more with the same "them and us" attitudes, probably encouraged by a media that just chases headlines by reporting press releases rather than questioning and examining issues in depth.It winds me up that, after six years of recession, people still oppose spending cuts. Greed doesn't just exist at the high levels of society. What would be epic is if the top million richest people in the country donated big sums to the tax pot and shut up all the jealous finger-pointers up once and for all.
Example for me was best summed up by the presses approach to the recent changes in child benefits and where the cut off point should be for higher earners. They reported "winners" and "losers" as those directly affected and what they might lose in cash. Not once did they consider the position of that benefit in wider society, or consider what is the purpose of that benefit, and are the true losers the rest of society in terms of opportunity costs of what else could be done with that money, or do we need to tax as much etc.
Puggit said:
Johnnytheboy said:
As someone above said, good start.
It's not really a start, they haven't done it yet - this is politicians we are talking about!turbobloke said:
£50bn of the welfare bill already goes to people on above average incomes, is that spending the country can afford to maintain? It amounts to ~25% of the total, and for what...these people pay tax and then get some back with a hefty admin charge on top that we all cough up for.
It does seem bizarre to me too.People may complain when they look to cut benefits for middle earners but it's the right way to go. You could use the money saved to give every tax payer in the UK a £1000 tax cut and let them decide how to spend it.
The result would be people who wanted kids or a house could easily save for it, likewise for entrepreneurs and there would be a retail pickup without a doubt.
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