Focusing on job creation rather than benefit cuts is the most effective way to reduce the welfare bill, according to new research from the Joseph Rowntree Foundation (JRF). The thinktank argues that addressing the underlying causes of unemployment would not only lower social security spending but also enjoys broad public support.
Employment Target Could Save £10bn
In a forthcoming report, JRF economists demonstrate that if the government achieves its goal of having 80% of the working-age population in employment, the cost of universal credit would fall by £10bn—equivalent to one-eighth of the current bill. This counters the prevailing political narrative that social security spending is out of control, noting that official projections show non-pensioner benefits will remain stable at around 5% of GDP for the remainder of this parliament.
Sam Tims, JRF's lead analyst, stated: "We know what happens when the holes in the safety net are made ever bigger. The reasons people need support don’t disappear, instead low-income families go hungry. So government should focus on the root causes of economic insecurity. These are the underlying economic failures that drive social security need—like the decent jobs that need to be created, the affordable homes we need, and better health."
Public Support for Long-Term Approach
A survey of over 4,000 voters conducted by pollster More in Common alongside the JRF research found that 59% support reducing the welfare bill in the longer term by tackling underlying causes. In contrast, only 20% favored cutting costs quickly by restricting benefit eligibility, and 8% preferred reducing claimant payments. Among 2024 general election voters for Labour, Liberal Democrats, or Greens, support for the long-term approach rose to 70%.
The report calls for government prioritization of measures such as increased public health support, more social housing construction, and regeneration of struggling regional economies. It highlights that health-related universal credit claims have risen more since the pandemic in areas with fewer local job opportunities, particularly former industrial and coastal regions.
Context of Neet Inquiry
The research precedes the interim report from an inquiry into young people not in education, employment, or training (Neet) led by Alan Milburn, former cabinet minister and ex-chair of the Social Mobility Commission. Nearly one million young people aged 16 to 24 are Neet. Milburn has noted that more is spent on benefits for this group than on helping them into work. His final report, expected later this year, may recommend benefit reforms, though any call for cuts could prove controversial. Last year, Labour’s plan to reduce personal independence payments for disabled people was significantly scaled back after a backbench revolt.
A Department for Work and Pensions spokesperson said: "Reforming welfare is about getting people who can into work. Our investment in subsidized work, jobs grants, apprenticeships, and training will support half a million young people. Putting the Right to Try into law is allowing people on sickness and disability benefits to try work without the immediate fear of losing their benefits, while our £3.5bn investment in employment support for sick and disabled people is giving them the genuine help they need to move into work and out of poverty."
