The bill for benefits paid to people judged unfit for work will be reduced as part of plans to reduce the deficit, George Osborne has indicated. He said he wanted to protect "those with genuine needs" while encouraging those who could work to get a job. Some 2.6m people claim incapacity benefit, or its successor, the employment and support allowance, at an annual cost of about £12.5bn. Housing Benefit pays out about £21bn each year.
Osborne said that these figures made the benefits bigger drains on taxpayers's money than many Whitehall spending departments. Ministers are looking for ways in which to reduce the welfare bill over the summer, in time for the Spending Review on 20 October. Osborne said there would be a "trade-off" which could see savings in the benefit bill used to cushion the impact of cuts of as much as 25% in budgets for public services such as the police, defence and schools.
