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Select Committee · Work and Pensions Committee

Benefit levels in the UK

Status: Closed Opened: 30 Mar 2023 Closed: 23 May 2024 11 recommendations 8 conclusions 2 reports

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 … Show more

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Reports

2 reports
Title HC No. Published Items Response
Second Report - Benefit levels in the UK HC 142 21 Mar 2024 19 Responded
EasyRead Report - Benefit levels in the UK — 21 Mar 2024 0 —

Recommendations & Conclusions

9 items
2 Recommendation Second Report - Benefit levels in the UK Rejected

Commission further research on benefit levels' impact on claimant health and economic productivity

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. (Paragraph 55) Setting benefit levels: Purpose, principles and policy objectives Read more

Government response AI summary
The government rejects the recommendation, stating it has no plans to commission further research into the impact of benefit levels on health, wellbeing, and economic productivity, citing its focus on incentivising work and existing employment support programmes.
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Department for Work and Pensions
4 Recommendation Second Report - Benefit levels in the UK Rejected

Outline clear benchmarks for income-replacement benefits, relating to living costs and work incentives

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 … Read more

Government response AI summary
The government rejects the recommendation, stating it does not intend to establish a benchmark for income-replacement benefits.
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Department for Work and Pensions
5 Recommendation Second Report - Benefit levels in the UK Rejected

Review current benefit levels against benchmarks and outline plans to achieve objectives

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 … Read more

Government response AI summary
The government rejects the recommendation, stating it does not intend to establish a benchmark for income-replacement benefits, which is a prerequisite for the proposed review of benefit levels.
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Department for Work and Pensions
10 Recommendation Second Report - Benefit levels in the UK Rejected

Devise further opportunities for Parliament to scrutinise government benefit uprating decisions.

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 … Read more

Government response AI summary
The government effectively rejected the recommendation to provide further scrutiny opportunities ahead of the Uprating Order, explaining that the existing statutory process and implementation timelines prevent earlier parliamentary debate.
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Department for Work and Pensions
13 Recommendation Second Report - Benefit levels in the UK Rejected

Require government to justify deviations from ‘Uprating Guarantee’ and assess their impact.

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. Read more

Government response AI summary
The government rejected the recommendation, stating it has no plans to change the existing uprating process under the Social Security Administration Act 1992, thereby not committing to a new 'Uprating Guarantee' or its associated reporting requirements.
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Department for Work and Pensions
14 Recommendation Second Report - Benefit levels in the UK Rejected

Commit to annually uprating capital limit, benefit cap, and Carer's Allowance earnings threshold.

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 … Read more

Government response AI summary
The government effectively rejected the recommendation to annually uprate the capital limit, benefit cap, and Carer’s Allowance earnings threshold, outlining its existing review cycles and discretionary practices for each.
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Department for Work and Pensions
15 Recommendation Second Report - Benefit levels in the UK Rejected

Reduce time between inflation measure and benefit uprating implementation, retaining consistency.

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 … Read more

Government response AI summary
The government rejected the recommendation, stating it has no plans to change the length of time between inflation measurement and uprating implementation in the short to medium term due to various interdependencies, despite IT modernisation for State Pensions.
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Department for Work and Pensions
16 Conclusion Second Report - Benefit levels in the UK Rejected

Make the Household Support Fund a permanent feature of the social security system.

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 … Read more

Government response AI summary
The government rejected making the Household Support Fund permanent, stating it was introduced for high inflation, which is now falling, and confirmed a six-month extension until September 2024 as targeted temporary support.
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Department for Work and Pensions
18 Conclusion Second Report - Benefit levels in the UK Rejected

DWP has scope to commission independent research on benefit levels and living costs.

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 … Read more

Government response AI summary
The government rejected the recommendation, stating the Department currently has no plans to commission independent research into the effectiveness of benefit levels, as it already tracks poverty measures and conducts internal evaluations.
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Department for Work and Pensions

Oral evidence sessions

7 sessions
Date Witnesses
6 Dec 2023 Katherine Green · Department for Work and Pensions, Katie Farrington · Department for Work and Pensions, Rt Hon Mel Stride · Department for Work and Pensions View ↗
13 Sep 2023 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, Tom Pollard · New Economics Foundation View ↗
19 Jul 2023 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 View ↗
28 Jun 2023 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 View ↗
14 Jun 2023 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 View ↗
17 May 2023 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 View ↗
8 Mar 2023 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 View ↗

Who gave evidence

45 witnesses
WitnessOrganisationSessions
Adam Butler · Public Policy Manager StepChange 1
Andrew Harrop · General Secretary Fabian Society 1
Ashwin Kumar · Professor of Social Policy and Director, Policy E… 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 Sc… Policy Exchange 1
Iain Porter · Senior Policy Adviser Joseph Rowntree Foundation 1
James Taylor · Executive Director, Strategy, Impact and Social C… Scope 1
Jane Tully · Deputy Chief Executive (Acting) Money Advice Trust 1
Katherine Green · Director General for Labour Market and Poverty Po… Department for Work and Pensions 1
Katherine Hill — 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 … 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 — 1
Showing 40 of 45.

Correspondence

4 letters
DateDirectionTitle
21 Feb 2024 — Correspondence with the Secretary of State relating to Benefit levels in the UK
14 Dec 2023 — Correspondence with the Secretary of State relating to Benefit levels in the UK
15 Nov 2023 — Correspondence with the Secretary of State relating to benefit deductions
25 Oct 2023 — Correspondence to the Secretary of State for Work and Pensions and the Chancell…