UK Government announces significant proposed changes to welfare system

Following weeks of speculation and questions, the Labour Government has set out details of its plans to overhaul the UK’s social security system.

The government has insisted that the reforms are intended to “fix a broken benefits system that is letting people down”. Ms Kendall attributed these failures to the previous government throughout her statement. 

She went on say that the policy proposals being announced are aimed at supporting disabled people and people with long-term health conditions who can work back into employment. While also being a cost-cutting measure projected to save £5billion from the welfare budget by 2030.

What was announced?

The headlines are:

• Merge jobseeker's allowance and employment and support allowance into a new time-limited, non-means tested unemployment insurance
• Scrap the work capability assessment (WCA) for universal credit in 2028. Instead, people applying for health-related financial support and disability benefits will only face one assessment
• Narrowing of eligibility for Personal Independence Payment (Pip). People will need to score a minimum of four points in one category to qualify for the daily living element. There will be no change to the mobility component. There will be no Pip reassessments for those with severe, lifelong disabilities.
• A permanent above inflation rise in standard universal credit allowance, adding up to £775 in 2029/30. But incapacity benefits under universal credit will be frozen in cash terms for existing claimants and reduced by £50 per week in 2026/2027 for new claimants under a new universal credit health element.
• Those aged under 22 will no longer be able to claim the incapacity benefit top up to universal credit. While those with severe lifelong conditions who will never be able to work will have their incomes protected through an additional premium.
• Introduce a "right to try" initiative so people who want to attempt to get back into work won't lose their benefits while they do and an Access to Work scheme, consulting on improvements to workplaces to help people into employment

The government also confirmed it would not means test or freeze Personal Independence Payments, which is widely thought to have been down to pressure behind closed doors from Labour backbenchers. 

What nations are affected?

All of the changes will affect England, and most will apply to Scotland and Wales. Elements of social security and employment support are devolved in Scotland and Wales. For example, in Scotland, Personal Independence Payments and Disability Living Allowance are devolved. However, any cuts to these benefits in other parts of the UK will proportionally affect the level of funding the Scottish Government receives from the UK Treasury for them through the block grant. 

Social security and employment support are fully devolved in Northern Ireland. However, the Northern Ireland Executive is likely to mirror the changes. We will be seeking clarification on the extent of the impact the changes stand to have on the spending of devolved administrations in Scotland, Northern Ireland and Wales on social security.

What happens next?

The full package of proposed reforms have been set out in a newly published Green Paper here which will now go out to wider public consultation. The public can share their views up until 30 June 2025.

The UK Government will publish OBR-certified costings of individual measures at the Spring Statement on 26 March. Then, subject to parliamentary approval, Ministers will then need to bring forward primary legislation to deliver the proposed changes, likely to be in the autumn.

BASW will closely consider and scrutinise the details of what is being proposed in the Green Paper, before issuing a fuller response to the government’s plans which will then form the basis of our engagement to MPs. As ever, our response will be framed through a distinct social work lens, focusing on issues that stand to impact upon social work practice and on the lives of those who our profession works with. 

Social workers often support and advocate for people who depend upon welfare support to meet their everyday needs. We must ensure that their voices are heard and fairly represented in this process. Above all, it is critical that those most vulnerable are not penalised or left behind.