The Institute for Fiscal Studies says"
Working-age benefit spending has always been sensitive to the unemployment rate. But the rapid growth of housing benefit and tax credits over the couple of decades (documented in thisbriefing note published today) means that slow earnings growth now has the potential to push up spending too. Much of the hoped-for savings from the introduction of ESA have failed to materialise, and it is an open question whether the personal independence payment will be any different. Mr Osborne wants further cuts to social security spending to help reduce the deficit. He may end up having to make cuts just to stay on track."
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Benefit stats
The BBC quote the Institute of Fiscal studies
Explaining why spending had in fact reduced by £2.5bn in real terms, it said:
- All of the £5bn rise in the cost of pensioner benefits could be explained by the rising cost of state pensions. It said this was partly down to the ageing population, but also the "more generous" entitlements of a new generation of pensioners who had recently retired
- There had been an "unanticipated" rise in housing benefit spending of £1bn, despite cuts of £2bn, which was down to the growth of the private rental sector, rising rents and slow earnings growth
- This slower earnings growth meant spending on tax credits had not come down as quickly as expected, reducing costs by less than £3bn compared with a forecast saving of £4.6bn
- "Significant delays" in the replacement of disability living allowance with the "less generous" personal independence payment had led to a £1.6bn increase in spending, rather than a £1.2bn cut
- Switching from the Retail Prices Index to the Consumer Prices Index measure of inflation for up-rating benefits had not saved the expected £4bn
Many may agree with Edd Balls and Rachel Reeves. They wrote: "A key cause of the Tories' overspending is their failure to make the economy work for working people, leaving thousands more reliant on housing benefit."
So how are the Welfare Reform changes affecting people
The changes to council tax benefit have also hit Blackpool particularly hard, as the council decided to pass on most of the 10% shortfall in government grant to its residents.
Mike Clague, a former RAF chef whose 19th floor flat has such a spectacular view, is having to find £15 a month extra.
"It doesn't sound much," he says. "But on top of all the other bills, it's a lot."
Ann Morris gives out school uniforms to those who cannot afford them
He has had to cut back on food as a result. Chocolate has become a once-a-week treat.
In Blackpool even those on jobseeker's allowance (JSA) have to find an extra £206 a year.
Many people have not yet paid anything.
"We recently had a huge influx of clients for non-payment of that money," says Julia Hannaford of Blackpool Citizens Advice.
"In one week we saw 40 people."
For those that are paying, the extra outgoings have stretched household budgets. Half the council tenants in Blackpool are behind with their rent.
In two or three cases, the local housing association has now obtained suspended possession orders, the first stage in the eviction process.
Sanctions
Elsewhere in the North West there are already some striking memorials to the first six months of the benefits changes: the houses that no one wants.
In Sefton, on an estate once known as Beirut, there are roads where dozens of people have moved out.
One resident of Daley Road points out 10 empty houses in her street.
One of the empty houses in Daley Road
"They don't even bother to board them up anymore," she tells me.
"It's all because of the bedroom tax. Nobody wants a three bedroom place anymore."
On this part of Merseyside, community workers also report that, since April, more people are having their benefits temporarily stopped.
JSA claimants, for example, now have to prove that they are job hunting, by applying online.
But not all are computer literate.
Ann Morris, a development worker in Litherland, says that as a result many parents can no longer afford to buy school uniforms.
She and her colleagues have set up a uniform bank to help.
"They all want their kids to go back to school with new uniforms. But some have benefit sanctions, so they just don't have the money," she says.
Carol Wilson, a carer from the Tuebrook area of Liverpool, was herself sanctioned earlier in the year.
She lost one week's Employment and Support Allowance (ESA), as a result of being in hospital.
Since April she has also had to find £80 a month as a result of having a spare room, and £9 a month extra for council tax.
Along with all claimants, she has also been affected by the 1% cap on annual benefits increases.
She, her partner, and her son now share their bath-water to try to economise.
"I never thought I'd see the day that we'd all get in and share a bath. A treat is getting in the bath first."
And she stretches a pot of stew, known as scouse, so that it lasts for three days.
"You just add potatoes each day. When the meat runs out, it's known as "blind scouse".
Blind scouse is certainly making a comeback in Liverpool at the moment, she says.
Coping
All along the Department for Work and Pensions (DWP) has insisted that the changes are not about saving money, but about encouraging more people into work.
Indeed since claimants were warned about the cap on total benefits back in April, the DWP says more than 15,000 have been helped to find jobs.
"Since April we have made great strides delivering our reforms," a DWP spokesman told the BBC.
"The rollout of universal credit and personal independence payments have begun, reforms to housing benefit are making the system fairer and the benefit cap is now in place across the country."
The government also says it has cut income tax for 25 million people, saving a typical taxpayer £700 a year.
It claims the typical household will also save £600 as a result of council tax being frozen for five years.
And even among those hit by benefit cuts, there are those who support the principles of the reforms.
"I do think it's right that people should be in work if they can be," says Carol Wilson.
"And I don't think being on benefits should be too comfortable.
"Whilst I would like more, the country is in a crisis. And I cope with what I have," she says.
The Welfare Reform
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