Charities warn Duncan Smith: 450,000 disabled people will lose out under Universal Credit

Work and Pensions Secretary promised that there would be "no losers" under the new programme.

"There will be no losers," Iain Duncan Smith said of his Universal Credit programme in November 2010. But a commission led by Paralympian Tanni Grey-Thompson (interviewed earlier this year by the NS) has found that there will, in fact, be 450,000 - all of them disabled.

Its report, based on surveys of 3,500 disabled people and their families, warns that 100,000 disabled children stand to lose up to £28 a week; 230,000 severely disabled people who do not have another adult to assist them are at risk of losing £28-£58 a week; and up to 116,000 disabled people who work could lose £40 a week. If true, and the government has denounced the study as "irresponsible scaremongering", Duncan Smith's vow to "make work pay" will ring hollow for thousands of people.

The report, Holes in the Safety Net: the impact of universal credit on disabled people and their families, is backed by The Children's Society, Citizens Advice and Disability Rights UK. Here's what Grey-Thompson, who shares the title of Britain's most successful Paralympian with cyclist Sarah Storey, had to say about it.

The findings of this report do not make easy reading. The clear message is that many households with disabled people are already struggling to keep their heads above water. Reducing support for families with disabled children, disabled people who are living alone, families with young carers and disabled people in work risk driving many over the edge in future.

Labour has responded by reaffirming its call for the government to delay the introduction of Universal Credit by a year and one wouldn't be surprised if Ed Miliband chooses to quiz David Cameron on this subject at today's PMQs. Shadow work and pensions secretary Liam Byrne said: "This report is another nail in the coffin for David Cameron's claims we are all in this together. The PM tried to hide it in the Commons, but this report lays bare the truth that he is snatching up to £1,400 from 100,000 disabled children yet offering a huge tax cut to millionaires. Disabled people and their families are being forced to pick up the tab for the government's shambolic mismanagement of our economy."

For the record, the Department for Work and Pensions described the report as "highly selective" and accused the commission of "highly selective". A spokeswoman said: "The truth is we inherited a system of disability support which is a tangled mess of elements, premiums and add-ons which is highly prone to error and baffling for disabled people themselves.

"Our reforms will create a simpler and fairer system with aligned levels of support for adults and children. More importantly, there will be no cash losers in the rollout of Universal Credit.

"In fact, hundreds of thousands of disabled adults and children will actually receive more support than now, including paying a higher rate of support for all children who are registered blind."

Laudable words, but the government will need to do much more to convince charities that the disabled, rightly viewed as the most worthy recipients of welfare by the public, will not lose out.

Work and Pensions Secretary Iain Duncan Smith arrives for a Cabinet meeting at 10 Downing Street. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR