Plan to freeze PIP incapacity advantages could also be dropped

Ministers are contemplating abandoning plans to freeze some incapacity advantages, the BBC understands.

Preliminary stories had recommended Private Independence Funds (PIP) wouldn’t rise in step with inflation for a 12 months, however many often loyal Labour MPs have voiced robust opposition in conferences in No10, in addition to to occasion whips and ministers.

The eligibility standards for PIP will likely be tightened with the federal government anticipated to chop billions of kilos from the welfare funds, however dropping the freeze may keep away from a probably damaging vote within the Commons.

Work and Pensions Secretary Liz Kendall will set out particulars of reforms to welfare in a inexperienced paper subsequent week.

A part of the reform may even embody a “proper to strive” assure – permitting folks with disabilities the chance to take up employment with out the danger of dropping their advantages if it doesn’t work out.

After Liz Kendell lays out her plans, Chancellor Rachel Reeves will then reveal the total scale of welfare spending reductions, anticipated to be between £5bn and £6bn, in her Spring Assertion on 26 March.

On Friday she mentioned the federal government wanted to “get a grip” on the welfare invoice, saying the system just isn’t working for the taxpayer or recipients.

Complete spending on well being and incapacity advantages is forecast to rise from £64.7bn in 2023-24 to £100.7bn in 2029-30. The most important contributor to this improve can be from welfare spending on working-age adults, in response to the Workplace for Funds Accountability.

The second largest single factor of the working-age welfare invoice is PIP.

In 2023-24, PIP totalled £18bn, a determine projected to virtually double to £34bn by 2029-30. That will imply the variety of claimants rising from 2.7 million to 4.2 million.

With Labour holding a big Commons majority, a freeze to PIP can be more likely to cross a vote, however inner divisions can be highlighted.

Sources advised the BBC the measures to be introduced would nonetheless be troublesome and limiting who qualifies for PIP was more likely to concern some Labour MPs.

Even with the tighter eligibility measures deliberate, sources mentioned spending on PIP would nonetheless rise however not as shortly as in any other case forecast.

PIP is meant to assist with the additional dwelling prices for individuals who have a long-term bodily or psychological well being situation. Some recipients are in work and argue it supplies important assist enabling them to stay in employment. But it surely additionally goes to those that are closely disabled and unable to work.

Numerous MPs broadly supportive of welfare reform have advised the BBC they’ve obtained assurances that severely disabled folks wouldn’t be anticipated to work and wouldn’t lose entitlement to advantages.

The anticipated modifications to the profit system come after the federal government introduced it could be axing NHS England, the arms-length physique at present liable for operating the well being service in England.

Well being Secretary Wes Streeting has indicated he plans to make additional cuts which he says will enhance the effectivity of the well being service, writing within the Sunday Telegraph that there’s “way more change to return”.

He mentioned “tons of” of official our bodies had been recognized as “cluttering the affected person security and regulatory panorama”.

“Sufferers and employees alike can see the inefficiency and waste within the well being service. My staff and I are going via budgets line by line, with a relentless concentrate on slashing bloated forms,” he mentioned.

A Division for Work and Pensions spokesperson mentioned: “Now we have been clear that the present welfare system is damaged and wishes reform, in order that it helps long-term sick and disabled individuals who can work to search out employment, making certain folks obtain the assist they want, whereas being truthful to the taxpayer.

“With out reform extra folks will likely be locked out of jobs, regardless of many eager to work. That’s not simply unhealthy for the economic system, it is unhealthy for folks too.”