Re: The Welfare Reform 'Car Crash' Aug 14, 2011 11:47:36 GMT 1
Post by nickd on Aug 14, 2011 11:47:36 GMT 1
(49 Continued) George puts his emphasis on the following in his comprehensive spending review document:
"Introduces fundamental reforms to simplify the welfare system, promoting work and personal responsibility through the new Universal Credit as well as providing enhanced support for those with the greatest barriers to employment through the Work Programme.
The Universal Credit will be introduced over two Parliaments to replace the current complex system of means tested working age benefits. It will ensure that work always pays and reduce fraud and error, while helping ensure that the welfare system is affordable;
Spending Review 2010
puts the welfare system on a sustainable footing, making net welfare savings of £7 billion a year, including through withdrawing Child Benefit from families with a higher rate taxpayer, reforming Employment and Support Allowance, controlling the cost of tax credits, and capping the amount a work less household can receive in benefits to no more than an average family gets by going out to work;
This is how he envisages savings will be phased in year on year
2011/2012 = £320M
2012/2013 = £2,555M
2013/2014 = £5,990M
2014/2015 = £7,040M
The prediction is that by 2015 the savings will be £7 Billion (well 7040 million)
The CSR makes it clear that the biggest savings will be in the time limiting of ESA claims to 12 months at £2,010 million (say 2 billion) and Child Benefit at 2,500 (say 2.5 billion). It's a bit of a let down with DLA reductions only giving him an estimated saving of £135 million by restricting DLA mobility payments to those in residential care.
A more substantial area of savings comes from Working & Child Tax Credits at a combination of £385M + £390M + £300M providing £1,185M against which you deduct £560M for increases in the child elements which are set to rise.
Unsurprisingly, we haven't heard too much about the estimated savings of £490 million which he plans to achieve by localising and reducing Council Tax (and the benefit changes which go with it)
The capping of benefits and housing benefit restriction is set to save £485M.
There are minus changes in cumulative growth on work and pensions expenditure amounting to £5.5 billion on Departmental budgets.
But we'll stick with these estimated £7 billion savings for now because they are what George needs to show us he can deliver.
In his CSR review he puts further emphasis on
"How the Government is radically simplifying the existing benefits system through the creation of a new Universal Credit, to ensure that it always pays to work;"
• The Government is providing enhanced support for those with the greatest barriers to employment through the Work Programme, incentivising specialist private providers through an innovative payment by results mechanism.
•The Government is ensuring the Jobcentre Plus network can continue to provide support that is internationally acclaimed as effective in getting people back into work.
So broadly speaking we can see which way he's headed, it's not quite in line with Freud on Fraud or living up to the populist tabloid headlines though is it?
Question is to deliver £7 billion in savings how much is it all going to cost? Mmm, now that is the question.
Link to comprehensive savings review document