1: Set out clear timeline for concluding review of research on carers' experiences
Recommended (the committee's words)The Department should set out when it intends to conclude its review of research on the experience of carers.
Select committee: Work and Pensions Committee
Benefit levels in the UK
Closed
Opened 30 Mar 2023
Closed 23 May 2024
13 recommendations
6 conclusions
Work and Pensions Committee Inquiry on parliament.uk ↗
Inquiry scope (the committee's words)
In our July 2022 report, The cost of living , we heard evidence which suggested that a root cause of the financial challenges households faced “lay in the fundamental inadequacy of social security support”. We therefore recommended that the Government should “review the adequacy of benefit levels and publish its findings”. The Government responded that it did not intend to review the adequacy of benefit levels, because “there was no objective way of deciding what an adequate level of benefits should be”. Given the high costs facing households across the UK, we are launching an inquiry into the adequacy of benefit levels in the UK, to help inform current and future Government thinking. We will also look at the relationship between social security and the labour market. - Watch the British Sign Language version of the report - Listen to the audio summary of the report - EasyRead version of the report - Large print report This inquiry focussed specifically on working-age benefits; however, other types of benefits might arise. Read the call for evidence to learn more about the inquiry. . We understand that the issues raised in this work may be sensitive or upsetting and the following organisations may be able to offer support or further information: Samaritans – General support for everyone. Call 116 123 - 24 hours a day, every day, or email jo@samaritans.org Mind – for information, advice, and support for anyone experiencing a mental health problem. Call 0300 123 3393. Citizens Advice - For independent, free advice provided by a network of charities online, over the phone and in person on a wide variety of issues including benefits, work, debt, housing, family and immigration. Their Adviceline is available 9am to 5pm, Monday to Friday, by calling 0800 144 8848 (England) or 0800 702 2020 (Wales)
Where it stands
The inquiry is closed, opened 30 March 2023.
The committee has published 2 reports, most recently EasyRead Report - Benefit levels in the UK on 21 March 2024.
The government's response to each report
EasyRead Report - Benefit levels in the UK
No government response is linked to this report.
Second Report - Benefit levels in the UK
Published 23 May 2024. The deadline was 21 May 2024.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government's response sets out where it has taken action, but it gives no commitment to the Committee's main proposals on benchmarks, an 'Uprating Guarantee', independent research or a permanent Household Support Fund.
- On a benchmark for income-replacement benefits, it states it "does not intend to establish a benchmark"; it notes there is "no overall agreed approach to benchmark benefit levels".
- It "agrees that PIP is not operating as intended" and points to the Health and Disability Green Paper of 29 April 2024. On the Extra Costs Taskforce it says it would "not be appropriate to further comment" until the consultation response is published.
- On uprating, it has "no plans to change the uprating process" and no plans to change the gap between the inflation measure and implementation. LHA rates will be reviewed every year, taking into account "a range of factors".
- It has no plans to commission further research on benefit levels and health, or independent research on whether levels meet objectives. The Household Support Fund is extended for six months, not made permanent. It will release Work Coach and Disability Employment Adviser statistics quarterly.
Recommendations and conclusions
- 1: Set out clear timeline for concluding review of research on carers' experiencesRecommendation · Second Report - Benefit levels in the UK
- 2: Commission further research on benefit levels' impact on claimant health and economic productivityRecommendation · Second Report - Benefit levels in the UK
- 3: Outline principles to guide benefit policy design and inform benefit level setting after consultationRecommendation · Second Report - Benefit levels in the UK
Reports
- EasyRead Report - Benefit levels in the UK21 March 2024
- Second Report - Benefit levels in the UK21 March 2024 · 19 items
Evidence
- 7 oral evidence sessionsLatest 6 December 2023
- 45 witnesses
Recent activity
- Third Special Report - Benefit levels in the UK: Government’s response to the Committee’s Second Report23 May 2024, Report published
- Second Report - Benefit levels in the UK21 March 2024, Report published
- EasyRead Report - Benefit levels in the UK21 March 2024, Report published
Recommendations and conclusions 19 shown
2: Commission further research on benefit levels' impact on claimant health and economic productivity
Recommended (the committee's words)The Government should commission further research to understand the impact of benefit levels on the health and wellbeing of claimants and its relationship with economic productivity.
3: Outline principles to guide benefit policy design and inform benefit level setting after consultation
Recommended (the committee's words)Discussion on the adequacy of benefit levels can often be sidetracked by debate on whether it is possible to define essential costs or needs. We agree that it would be a useful first measure for the Government to set out a framework of principles to underpin the design and delivery of benefit policy. The Government should, following consultation with stakeholders, outline a set of principles to guide the design and delivery of benefit policy, and to inform decisions on how benefit levels are set.
4: Outline clear benchmarks for income-replacement benefits, relating to living costs and work incentives
Recommended (the committee's words)DWP is clear that benefit levels and the design of benefit policy are intended to incentivise work. This is welcome. The Department does not however directly acknowledge the other purpose of benefits: to provide financial support for living costs to jobseekers, people with low earnings, and to those who are unable to or not expected to work. We find this surprising given that the cost associated with benefits is significant—to claimants, to the taxpayer and across Government spending. Setting out clear, measurable objectives and a benchmark for benefit levels linked to living costs would enable DWP to measure progress and improve accountability in the system. DWP should outline a clear benchmark for income-replacement benefits (such as Universal Credit) which relates to living costs as well as incentivising work. When deciding what benefit levels ought to achieve and/or prevent in relation to living costs, the Department could, for example, consider the methodology used in the Joseph Rowntree Foundation and Trussell Trust’s ‘Essentials Guarantee’. The Government should then present a statement of objectives for these benefits within the first session of the next Parliament.
5: Review current benefit levels against benchmarks and outline plans to achieve objectives
Recommended (the committee's words)Having established a benchmark, the Department should review the extent to which current benefit levels are meeting this benchmark. If DWP finds that it is not meeting these objectives, it should set out how it intends to reach them alongside annual uprating, for example, by ratcheting-up benefit levels where fiscal headroom allows.
6: Personal Independence Payment support proves insufficient, frequently diverted to cover basic living costs.
Concluded (the committee's words)Support provided through Personal Independence Payment (PIP) is not operating as intended. Evidence suggests that insufficient means-tested benefits frequently necessitate PIP recipients to use their extra costs benefits to cover day-to-day living costs.
7: DWP fails to clarify PIP's intended contribution to disabled claimants' extra costs.
Concluded (the committee's words)DWP has not clearly stated the extent to which PIP should contribute towards the extra costs incurred by claimants with a health condition or disability. We heard that for some claimants, the shortfall in support provided was significant enough to worsen physical and mental health outcomes, as well as to increase their likelihood of experiencing financial hardship
8: Require DWP to use Extra Costs Taskforce findings to benchmark PIP coverage.
Recommended (the committee's words)We welcome the Government’s recommitment in its February 2024 Disability Action Plan to take forward plans to set up an Extra Costs Taskforce to understand the extra costs disabled people face in their daily lives. DWP should be part of the Extra Costs Taskforce. Once operationalised, DWP should use findings from the Taskforce to set a benchmark for the health and disability related costs it intends PIP to cover. It should then set out how it intends to reach this benchmark alongside annual uprating.
9: Introduce further levels of support for PIP and Universal Credit's Health Element.
Concluded (the committee's words)There is a persuasive case that there should be a greater number of levels of support provided through PIP—both higher and lower—to reflect more accurately the experiences of claimants. The Department should introduce further levels of support through PIP and the new Health Element of Universal Credit in time for the start of financial year 2025–26.
10: Devise further opportunities for Parliament to scrutinise government benefit uprating decisions.
Recommended (the committee's words)We understand that to increase legacy benefits, changes must be made to DWP IT systems several months in advance—with work needing to be completed by the end of November, for increases to be enacted the following April. Parliament however is not presented with the secondary legislation to approve these changes until months after the decision is announced, by which time it would not be possible for the Government to change its course should it be persuaded. We are concerned that the process does not provide genuine opportunity for Members to scrutinise the Government’s plans. The Government should devise and bring forward further opportunities for Parliament to scrutinise its decisions on benefit uprating. For example, ahead of debate on the benefit Uprating Order, the Government should provide this Committee with a statement of how its decision on benefit uprating has taken into account its newly stated set of principles and objectives.
11: Government decisions to uprate working-age benefits and Local Housing Allowance welcomed.
Concluded (the committee's words)We welcome the Government’s decision to take a consistent decision and uprate all working-age benefits for 2024–25 by the September 2023 CPI inflation rate of 6.7%. We also welcome the Chancellor’s announcement in the 2023 Autumn Statement that Local Housing Allowance rates will be reset at the 30th percentile of local market rents in April 2024, after several years of freezes and increasing rent prices.
12: Introduce an ‘Uprating Guarantee’ for annual, consistent benefit increases from 2025–26.
Recommended (the committee's words)There remains uncertainty for some benefits each year as to whether they will be uprated. We agree with the assessment of the Secretary of State that it is important that “there is an element of fairness to the consistency” of how uprating decisions are made. From financial year 2025–26, the Government should make an ‘Uprating Guarantee’ to uprate benefits annually with a consistent measure, for example prices.
13: Require government to justify deviations from ‘Uprating Guarantee’ and assess their impact.
Recommended (the committee's words)If the Government decides to deviate from the ‘Uprating Guarantee’, it should clearly set out its reasoning to Parliament. The Government should also undertake work to understand what impact the decision to not follow consistent practice would have on its benchmark of objectives for benefit levels.
14: Commit to annually uprating capital limit, benefit cap, and Carer's Allowance earnings threshold.
Recommended (the committee's words)Policies which reduce the level of support claimants can receive, such as the capital limit rule in means-tested benefits, the benefit cap, and the earnings threshold in Carer’s Allowance, risk reducing benefit levels if they are not regularly uprated in line with other prices. To ensure that policies designed to allocate and limit benefit entitlement operate as originally intended, the Government should commit to uprating the capital limit rule in means-tested benefits, the benefit cap and the earnings threshold in Carer’s Allowance on an annual basis.
15: Reduce time between inflation measure and benefit uprating implementation, retaining consistency.
Recommended (the committee's words)We recognise the Department cannot shorten the reference period for benefit uprating due to the DWP IT systems used to uprate legacy benefits. In the longer term, and following the completion of migration to Universal Credit, the Government should aim to reduce the length of time between the measure of inflation used for uprating, and the uprating implementation date. The Government should retain this new, shorter uprating reference period each year to maintain consistency within the system.
16: Make the Household Support Fund a permanent feature of the social security system.
Recommended (the committee's words)It is welcome that the Government is extending the Household Support Fund (HSF) for a further six months until September 2024. Alongside other benefits, the HSF has provided a vital layer of additional support to households during the cost of living crisis. The Household Support Fund should be made a permanent feature of the social security system. This would enable local authorities to plan their provision of discretionary support to households better.
17: Make a commitment to annually uprate Local Housing Allowance to retain its 30th percentile value.
Recommended (the committee's words)The evidence is clear that support for housing costs cannot be viewed in isolation from wider support provided through other benefits. When and if claimants experience a shortfall in rent, this can impact other parts of household budgeting and erode income otherwise intended for daily living costs. The Government should make a commitment to uprate annually Local Housing Allowance so that it retains its value at the 30th percentile of rents in a Broad Rental Market Area (BRMA).
18: DWP has scope to commission independent research on benefit levels and living costs.
Concluded (the committee's words)The Government of the day has a political mandate to make decisions about benefit adequacy, but its decision-making might be assisted by independent advice. There is scope for DWP to commission independent research, either via an independent body, such as the Social Security Advisory Committee, or ad-hoc, to supplement its own review of the extent to which current benefit levels are meeting its objectives for what benefit levels should achieve in relation to living costs.
19: Include Work Coach numbers, average caseloads, DEAs, and DEALs in quarterly statistics releases.
Concluded (the committee's words)We are concerned that there is not sufficient capacity in the system to absorb the number of claimants who will be made subject to conditionality, or increased conditionality, following announcements made in the 2023 Spring Budget and 2023 Autumn Statement, as well as planned changes to the Work Capability Assessment. This could have a negative impact on claimants and on Work Coaches, who conduct Benefit levels in the U 77 valued work in our constituencies. To improve transparency, the Department should include in its quarterly statistics release, the number of Work Coaches and the average number of claimants they are responsible for. This would help inform an understanding of the pressures on Work Coaches, provide information on the number of Work Coaches working in Jobcentres and help inform an assessment of whether there is sufficient Work Coach capacity in the system. The Department should also include the number of Disability Employment Advisers (DEAs), the number of Disability Employment Adviser Leads (DEALs), and the number of Work Coaches DEAs and DEALs are supporting in Jobcentres.
Reports
EasyRead Report - Benefit levels in the UK
- HC No.
- Not recorded
- Published
- 21 Mar 2024
- Items
- 0
- Government response
- No government response is linked to this report.
Second Report - Benefit levels in the UK
- HC No.
- HC 142
- Published
- 21 Mar 2024
- Items
- 19
- Government response
- Government response published 23 May 2024 (deadline 21 May 2024). Read the government's response ↗
Oral evidence sessions
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| Date | Session and witnesses | Source |
|---|---|---|
| 6 Dec 2023 |
Work and Pensions Committee
Katherine Green · Department for Work and Pensions,
Katie Farrington · Department for Work and Pensions,
Rt Hon Mel Stride · Department for Work and Pensions
|
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| 13 Sep 2023 |
Work and Pensions Committee
Adam Butler · StepChange,
Brian Dow · Rethink Mental Illness,
Duncan Shrubsole · Lloyds Bank Foundation for England and Wales,
Emily Holzhausen OBE · Carers UK,
Jane Tully · Money Advice Trust,
Katherine Hill · Loughborough University,
Tom Pollard · New Economics Foundation
|
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| 19 Jul 2023 |
Work and Pensions Committee
Andrew Harrop · Fabian Society,
Céline Jaeggy · UNEDIC,
Emily Farchy · Organisation for Economic Co-operation and Development (OECD),
Iain Mansfield · Policy Exchange,
Kristoffer Lundberg · Ministry of Health and Social Affairs, Sweden,
Mike Brewer · Resolution Foundation,
Rebecca Deegan · Association of British Insurers
|
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| 28 Jun 2023 |
Work and Pensions Committee
Balbir Chatrik · Centrepoint,
Ben Beadle · National Residential Landlords' Association,
Ben Twomey · Generation Rent,
Dr Carin Tunåker · University of Kent,
Francesca Albanese · Crisis,
Prof Peter Kemp · Blavatnik School of Government, University of Oxford,
Sheila Haig · City of Edinburgh Council,
Timothy Douglas · Propertymark
|
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| 14 Jun 2023 |
Work and Pensions Committee
Deven Ghelani · Policy in Practice,
Dr Stephen Brien · Social Security Advisory Committee,
Matthew Oakley · Social Metrics Commission,
Peter Whiteford · Crawford School of Public Policy, The Australian National University,
Rt Hon Sir Iain Duncan Smith MP
|
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| 17 May 2023 |
Work and Pensions Committee
Ciara Fitzpatrick · Northern Ireland Cliff Edge Coalition,
David Stickland · Benefits Training Company,
Dr Steffan Evans · Bevan Foundation,
James Taylor · Scope,
Ken Butler · Disability Rights UK,
Kirsty McHugh · Carers Trust UK,
Professor Stephen Sinclair · Scottish Poverty and Inequality Research Unit (SPIRU),
Tom Lee · Child Poverty Action Group
|
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| 8 Mar 2023 |
Work and Pensions Committee
Ashwin Kumar · Manchester Metropolitan University,
Donald Hirsch · abrdn Financial Fairness Trust,
Iain Porter · Joseph Rowntree Foundation,
Nicholas Timmins · Institute for Government,
Peter Kelly · The Poverty Alliance,
Robert Joyce · Institute for Fiscal Studies,
Ryan Shorthouse · Bright Blue
|
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Who gave evidence
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| Witness | Organisation | Sessions |
|---|---|---|
| Adam Butler · Public Policy Manager | StepChange | 1 |
| Andrew Harrop · General Secretary | Fabian Society | 1 |
| Ashwin Kumar · Professor of Social Policy and Director, Policy Evaluation Research Unit | Manchester Metropolitan University | 1 |
| Balbir Chatrik · Director of Policy and Prevention | Centrepoint | 1 |
| Ben Beadle · Chief Executive | National Residential Landlords' Association | 1 |
| Ben Twomey · Chief Executive | Generation Rent | 1 |
| Brian Dow · Deputy CEO | Rethink Mental Illness | 1 |
| Ciara Fitzpatrick · Academic Adviser | Northern Ireland Cliff Edge Coalition | 1 |
| Céline Jaeggy · Director of Legal and Institutional Affairs | UNEDIC | 1 |
| David Stickland · Director | Benefits Training Company | 1 |
| Deven Ghelani · Director and Founder | Policy in Practice | 1 |
| Donald Hirsch · Policy Adviser | abrdn Financial Fairness Trust | 1 |
| Dr Carin Tunåker · Lecturer in Law and Homelessness Researcher | University of Kent | 1 |
| Dr Steffan Evans · CEO | Bevan Foundation | 1 |
| Dr Stephen Brien · Chair | Social Security Advisory Committee | 1 |
| Duncan Shrubsole · Director of Policy, Communications and Research | Lloyds Bank Foundation for England and Wales | 1 |
| Emily Farchy · Economist | Organisation for Economic Co-operation and Development (OECD) | 1 |
| Emily Holzhausen OBE · Director of Policy and Public Affairs | Carers UK | 1 |
| Francesca Albanese · Executive Director of Policy and Social Change | Crisis | 1 |
| Iain Mansfield · Director of Research and Head of Education and Science | Policy Exchange | 1 |
| Iain Porter · Senior Policy Adviser | Joseph Rowntree Foundation | 1 |
| James Taylor · Executive Director, Strategy, Impact and Social Change | Scope | 1 |
| Jane Tully · Deputy Chief Executive (Acting) | Money Advice Trust | 1 |
| Katherine Green · Director General for Labour Market and Poverty Policy | Department for Work and Pensions | 1 |
| Katherine Hill | Loughborough University | 1 |
| Katie Farrington · Director General, Disability, Health and Pensions | Department for Work and Pensions | 1 |
| Ken Butler · Founder Welfare Rights and Policy Adviser | Disability Rights UK | 1 |
| Kirsty McHugh · CEO | Carers Trust UK | 1 |
| Kristoffer Lundberg · Deputy Director | Ministry of Health and Social Affairs, Sweden | 1 |
| Matthew Oakley · Secretariat | Social Metrics Commission | 1 |
| Mike Brewer · Deputy Chief Executive | Resolution Foundation | 1 |
| Nicholas Timmins · Senior Fellow | Institute for Government | 1 |
| Peter Kelly · Director | The Poverty Alliance | 1 |
| Peter Whiteford · Professor | Crawford School of Public Policy, The Australian National University | 1 |
| Prof Peter Kemp · Professor of Public Policy | Blavatnik School of Government, University of Oxford | 1 |
| Professor Stephen Sinclair | Scottish Poverty and Inequality Research Unit (SPIRU) | 1 |
| Rebecca Deegan · Head of Health and Protection Insurance | Association of British Insurers | 1 |
| Robert Joyce · Deputy Director and Head of the Income, Work and Welfare sector | Institute for Fiscal Studies | 1 |
| Rt Hon Mel Stride · Secretary of State | Department for Work and Pensions | 1 |
| Rt Hon Sir Iain Duncan Smith MP | Not recorded | 1 |
| Ryan Shorthouse · Founder and Chief Executive | Bright Blue | 1 |
| Sheila Haig · Customer Manager, Transactions – Assessment and Finance, Corporate Services | City of Edinburgh Council | 1 |
| Timothy Douglas · Head of Policy & Campaigns | Propertymark | 1 |
| Tom Lee · Senior Policy Analyst | Child Poverty Action Group | 1 |
| Tom Pollard · Head of Social Policy | New Economics Foundation | 1 |
Correspondence
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| Published | Direction | Letter |
|---|---|---|
| 21 Feb 2024 | Not recorded | Correspondence with the Secretary of State relating to Benefit levels in the UK |
| 14 Dec 2023 | Not recorded | Correspondence with the Secretary of State relating to Benefit levels in the UK |
| 15 Nov 2023 | Not recorded | Correspondence with the Secretary of State relating to benefit deductions |
| 25 Oct 2023 | Not recorded | Correspondence to the Secretary of State for Work and Pensions and the Chancellor of the Exchequer relating to uprating decisions: Working age benefits |