PwC comments on Welfare Reforms

Katie Johnston, Local and Devolved Government Leader at PwC, said:

“The Secretary of State had no choice but to introduce major changes to a benefits system which is unaffordable, acts as a disincentive to work and has become a major brake on UK productivity and economic growth.

“Even critics of the changes agree that the current system is in need of reform. Many of them argue that the answer lies in longer-term reforms to the health and social care system and to the provision of better support to people facing health and other difficulties. The problem is that changes of that kind will take a long time to have an impact, and we are facing a crisis right now, as PwC research demonstrates.

“New PwC research indicates the benefits bill is only going to increase, unless immediate action is taken. It is needed on two fronts: first, the government needs to make sure that work always pays and that there is always an incentive for those on benefits to get back into work. Particularly welcome is the announcement of a “right to try” which means that people will have the right to have a go at returning to work “without the risk this will put their benefits at work”.

“Secondly, employers and the government must address the very real risk that many people currently in work may leave the workforce and become dependent on benefits. Our research suggests that one in ten workers are actively considering leaving the workforce; and younger workers – aged 18 to 24 – are at even greater risk of falling into economic inactivity, in many cases because of challenges with their mental health. It is therefore striking that young people under 22 will no longer be able to claim the incapacity top-up to universal credit. This is a bold move which will no doubt attract criticism, but highlights the complexity of the Government’s challenge in preventing extended inactivity among those most at risk.”