Stephen Timms, Labour's reviewer of benefits, has stated that the current cost of health and disability handouts is "not a great concern," despite warnings from the Conservative party about the government being "in denial" regarding the escalating expenditure. Timms emphasized that the objective should be to ensure the system is "financially sustainable" rather than enacting outright cuts to welfare for individuals with health and disability needs.
He suggested that an increase in claims for Personal Independence Payments (PIP) reflects a genuine rise in the number of people experiencing ill health and disability since the COVID-19 pandemic. The review into PIP, which aims to assist with daily living costs for those with long-term health conditions or disabilities, was initiated last year following a Labour revolt that aimed to curb spending.
Official figures indicate that the number of PIP claimants in England and Wales has surpassed four million, effectively doubling since 2019, partly due to transfers from older benefit systems. Spending on PIP has risen from approximately £15 billion in 2019-20 to an estimated £26 billion in 2024-25, with projections suggesting it could exceed £41 billion by the end of the decade. The Treasury's Office for Budget Responsibility (OBR) forecasts that overall spending on health and disability benefits will increase from £76.9 billion in 2024-25 to £109.8 billion by 2030-31.
Timms' interim report highlighted that the current PIP system can act as a barrier to participation for claimants, who may fear that engaging in activities or work could lead to a reduction or removal of their benefits. He stated that the system has not kept pace with evolving understandings of disability and ill health over the 13 years since its introduction, indicating a need for fundamental change, with recommendations due in the autumn. He also noted that claimants often find the application process "dehumanizing," "soul destroying," and "degrading."
Regarding the rising costs, Timms asserted that while financial sustainability is a concern, the current level of spending is not. He stated, "What would be a concern would be if it carried on going up forever more, and that we have to address, and we will be doing so." The review's terms of reference require it to operate within the projected spending envelope for PIP but do not mandate savings.
Shadow work and pensions secretary Helen Whately accused Labour of being "in denial about the seriousness of the situation with our welfare system and the fact that we have to make savings." Work and Pensions Secretary Pat McFadden has urged the Timms review panel to consider the adequacy of the assessment process for the range of conditions currently reported, including ADHD and autistic spectrum disorders, which have seen significant increases in claimants. The review team plans to issue recommendations that are "bold in nature and bold in recognition of the wider environment in which disabled people in the UK are living," concluding that PIP, while valued, is "no longer fit for purpose."