Labour is exaggerating how much its DWP cuts will save – just to penalise disabled people

The Department for Work and Pensions (DWP) has come under fire from a prominent thinktank for its plans to cut disability and sickness benefits, with calls for a reevaluation of eligibility criteria rather than further restrictions. The think tank also poured scorn on the claims Labour has made around ‘savings’ from the cuts – saying they are not as much as the government is making out they are.

The DWP under fire from the Resolution Foundation

The Resolution Foundation has warned that reducing access to DWP disability benefits should not be the primary focus of government cuts. The organisation emphasises that any attempts to tighten eligibility could lead to devastating financial consequences for those already relying on these vital supports.

In a landscape where welfare cuts often hit the most vulnerable, the Resolution Foundation highlights the stark reality faced by people with disabilities and health issues. They argue that freezing benefits as a method to curb government spending would only yield savings of approximately £1 billion annually by the end of the parliamentary term, a negligible amount compared to the hardships that would be bestowed upon claimants.

This is also less than the Labour Party is claiming its cuts will save.

The thinktank firmly contends that the government’s focus should be on improving the way these benefits are managed rather than on denying support to those in need.

They highlight that the DWP should not pursue eligibility restrictions that would place undue financial strain on a small group of already vulnerable individuals. In past attempts, the government proposed crucial changes to the Universal Credit Work Capability Assessment in Autumn 2023, seeking to slash benefit spending.

However, these proposals were deemed unlawful earlier this year, illustrating the pitfalls of implementing hasty reforms without adequately considering their ramifications.

The Resolution Foundation’s report delves into the severe financial repercussions faced by individuals who suddenly find themselves ineligible for incapacity benefits.

Real-world effects

These changes aren’t merely bureaucratic – they can result in disastrous monthly income drops. For example, a single adult reliant on health-related support could see their income plummet from £810 a month to a mere £393 if eligibility were to be tightened.

The report suggests that the DWP should take decisive action to bridge this alarming gap. By redistributing levels of health-related support into basic awards, it could alleviate some of the burdens placed on individuals with disabilities.

The call for officials to temporarily freeze health-related support benefits between 2025 and 2029 could, according to the thinktank, be a way to mitigate the stark financial disparities without severely impacting claimants in the immediate term.

The inefficacies in the current system reveal a pressing need for reform grounded in compassion and understanding rather than in austerity measures that disproportionately affect those in greatest need.

As the DWP grapples with fiscal policies that critics argue are both flawed and counterproductive, the Institute for Fiscal Studies has also weighed in, labelling the current fiscal structure of the UK as needing significant improvement. They contend that the existing framework exposes fiscal policy to global economic shifts, complicating the chancellor’s promises of stable, predictable fiscal changes.

Will the DWP listen?

In this environment of uncertainty, bearing the brunt of financial pressure will be the very individuals the DWP system is designed to protect—disabled people, non-working people, and those unable to work due to sickness.

With the looming threat of tighter eligibility, cuts, and the freezing benefits, one can only hope that influential bodies like the Resolution Foundation will succeed in ensuring that the voices of those most affected are heard loud and clear. Although that seems a long way off at present.

Featured image via the Canary