Reform UK plan would overhaul welfare system with £50bn in savings

Under new proposals outlined by Jenrick, there would be a strategic shift in how support is provided to individuals currently receiving health-related Universal Credit (UC) and Personal Independence Payments (PIP). The approach emphasizes investment in therapies such as talking treatments and physiotherapy, alongside increased employment support, with an aim to reduce reliance on direct financial claims. Instead of continuing payments for people with less severe conditions, local councils and mayors would oversee accounts to cover necessities like transport and equipment.

Employers are expected to benefit from the introduction of a return-to-work cover, designed to give them a strong financial incentive to facilitate the reintegration of employees who have been absent due to illness. Meanwhile, those who remain on benefits after a two-year period without returning to work would be subject to a comprehensive disability needs assessment conducted face-to-face. This measure intends to identify and exclude fraudulent claims rigorously. Additionally, individuals deemed severely ill or facing grave challenges will have access to a newly established, regularly reviewed payment.

According to Jenrick’s calculations, following reassessments, approximately 2.16 million claimants will continue to receive their full entitlements, while around 2.89 million are expected to experience reductions or complete withdrawal of their payments. PIP currently supports 3.7 million people across England and Wales who have long-term mental or physical health conditions. The benefit is unique in that it is neither means-tested nor affected by other income or benefits, and it can be received alongside employment. It comprises two components—daily living and mobility—and claimants may qualify for either or both.

Jenrick acknowledged the difficulty of these reforms, stating, “We will not pretend this is painless,” and emphasized that relying indefinitely on welfare for young people is neglectful rather than compassionate. The Conservative Party has previously committed to cutting billions in benefits spending to balance the cost of maintaining the triple lock on state pensions. However, Labour has strongly criticized this plan, with a spokeswoman calling the claim of £50 billion in savings “fantasy economics,” accusing it of cutting disabled people’s support and shifting financial burdens onto employers. Labour highlights its own welfare reforms as delivering credible savings based on thorough analysis, in contrast to what it describes as the Conservatives’ arbitrary and unsubstantiated figures.

In recent policy developments, the government faced pushback last year when it attempted to tighten eligibility for daily living assessments for both current and future PIP claimants, resulting in a significant rollback after Labour MPs pressured the government. Jenrick described that attempt at savings as “modest” and said it had been undermined by backbench opposition. Meanwhile, Disability Minister Sir Stephen Timms released an interim report concluding that PIP is “not fit for purpose” and requires thorough reform.

Recent changes to Universal Credit have already seen reductions, such as halving the health-related entitlement for new claimants with less severe conditions. Jenrick contrasted these proposals with those of the Conservative Party, which he criticized as insufficient, noting that his plan aims to deliver savings more than twice the £23 billion proposed by Kemi Badenoch’s party. The Conservative plan includes measures like limiting benefits to UK citizens and restricting access to sickness benefits for less severe mental health issues. In May, the Conservatives also announced plans to reform the household benefit cap, removing the automatic exemption currently granted to PIP recipients. Kemi Badenoch defended the party’s proposals as necessary to “stop those who abuse the system getting almost unlimited welfare payments,” and the party estimates these changes will save at least £1 billion annually

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