Chancellor Jeremy Hunt visited North Kensington Job Center in London with Work and Pensions Secretary Mel Stride. Photo: Kirsty O'Connor/HM Treasury
The Government is set to breach its own cap on social security spending for the fourth time since it was introduced, despite a promised tightening of benefits.
An optional cap on tax credits and some welfare measures were announced by George Osborne in 2013 in a bid to secure pay.
But a forecast from the Office for Budget Responsibility (OBR) shows ministers are now expected to exceed the target by £137.4 billion. by around £8.6 billion in 2024/25.
According to the Autumn Statement, this projected overspending has more than doubled since the OBR's previous assessment in March suggested an overrun of £4.1 billion sterling.
Other breaches since the cap was introduced amounted to £4 billion in 2016. 17, £2.9 billion in 2017/18 and £1.9 billion in 2018/19.
Penny Mordaunt, Rishi Sunak, Jeremy Hunt and Mel Stride during Prime Minister's Questions. Photo: UK Parliament/Jessica Taylor/PA
Jeremy Hunt, the Chancellor, confirmed on Wednesday that job seekers who refuse to participate in the welfare process will stop receiving benefits after two years.
However, he also confirmed that benefits will rise by 6.5% in April next year. 7 percent – which corresponds to a higher inflation rate in September, rather than the October figure of 4.6%.
The OBR said the reasons for the expected disruption include increased Universal Credit costs due to benefit duration and workload, Mr Hunt's decision to unfreeze housing, and higher amounts of expected employment costs and support benefits.
Mr. Osborne promised. ten years ago, the wealth limit will act as a “national credit card limit”.
Mel Stride arrives Meeting at No. 10 before the presentation Autumn statement. Photo: Holly Adams/Bloomberg
But Nigel Mills, a Tory member of the House of Commons work and pensions committee, told The Telegraph that in its current form it had become “completely meaningless” as it is technically only reviewed once in each parliament.
” These numbers just illustrate what a mess we are in with Social Security and that the bills are much higher than we ever imagined, much of it due to the pandemic,” he said.
“That's why the government is right to take new measures to try to get budgets back under control, and it certainly underscores the need to get on top of people who are out of work.”
Maxwell Marlow, director of research at the Adam Smith Institute , added: “While the principle of a welfare cut to reduce public spending is understandable, in practice it is an arbitrary measure with no mechanism for accountability.”
When asked about the hack on Thursday, Downing Street officials said they would keep social security spending under control as it protects current levels.
“We have achieved tax cuts through National Insurance contributions and are helping the most vulnerable by increasing benefits,” the Prime Minister's spokesman said.
“I think people understand that, given that there are still problems caused by global obstacles, that this is the right thing to do. Obviously we have that under control.”
Mr Hunt and Mel Stride, the work and pensions secretary, have launched a back-to-work campaign in recent months aimed at boosting employment by hundreds of thousands of people through additional job training, new pilot schemes and tougher penalties for those who refuse to participate in the benefits process.
A Treasury spokesman said: “It is right that we continue to support those who need it by increasing the value of benefits at work.” £470 a year for 5.5 million households and Local Housing Benefit of £800 for 1.6 million households.
“This is not a formal assessment year for this financial rule, but we remain focused on ensuring the sustainability of social security spending. in the medium term. That's why we've announced plans to cut fraud and error and reform the welfare system to help people find work.”
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