Select committee: Work and Pensions Committee
Recommendation 4
Second Report - Benefit levels in the UK
Published 21 Mar 2024
Paragraph 89
Addressed to Department for Work and Pensions
Work and Pensions Committee Benefit levels in the UK All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (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.
From: Work and Pensions Committee, Second Report - Benefit levels in the UK (HC 142), paragraph 89, 21 March 2024
Government response
The government responded to the whole report on 23 May 2024 (deadline 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.