Does Reform's plan to cut £50bn in welfare spending add up?

Reform UK has outlined a plan it claims could save over £50 billion annually from the welfare budget by 2030, if they were to take office. The party intends to achieve this by restricting benefits for foreign nationals and reforming disability payments, while preserving the most severely disabled. However, the feasibility of these proposed measures is being scrutinized.

The UK government will allocate £353 billion on welfare benefits in 2023, with nearly half going towards the state pension, which Reform UK asserts they will not reduce. This leaves £207 billion for other welfare spending; cutting £50 billion annually would equate to approximately 25% of the remaining welfare expenditure, an ambitious target.

Personal Independence Payments (PIPs), a benefit targeting working-age individuals with physical or mental health conditions, saw a surge from around 2.4 million claims before the pandemic to four million in England and Wales in 2023. Reform UK suggests around £21 billion of its £50 billion savings could be achieved by altering health and disability benefits, including PIPs.

However, the institute for fiscal studies, a reputable think tank, points out that the specifics of Reform UK's plan remain largely unclear. Another critical aspect of Reform UK's plan involves banning foreign nationals from receiving welfare benefits, including Universal Credit (UC), which could save about £20 billion. However, this move could lead to international tensions, as the UK would risk alienating countries like the EU, whose citizens have long-term settlement rights in the UK.

Furthermore, if a significant number of EU nationals apply for UK citizenship, they might retain their entitlement to benefits. Reform UK also proposes to utilize a less generous inflation measure to calculate benefit increases, potentially saving £4.8 billion annually. Additionally, the party aims to invest in combating benefit fraud, which they estimate could save £2.8 billion annually.

Nevertheless, historical attempts to curb fraud have shown mixed results. Reform UK also plans to compel long-term welfare recipients who are able to work to perform 20 hours of community service each week. However, the cost of running such programs for councils remains unclear, making it debatable whether this measure would substantially reduce welfare spending.

While welfare reform is a common theme among political parties, Reform UK's approach is unique and carries risks, particularly given the concentration of PIP claimants in some of their target constituencies.