Caroline Elsom: Hidden benefits are breaking our welfare system and proving there’s ‘no such thing as a free lunch’
Who's accountable for the results?
Caroline Elsom is Head of Government Reform at Onward.
The catastrophic cost of Britain’s benefits bill is no secret. But the already eyewatering sums are usually missing a crucial part of the welfare system – all of the extra payments, discounts and freebies that claimants can receive on top of their regular benefits.
Many of these schemes, known as passported benefits, will be familiar to readers, like free school meals, free prescriptions or council tax reduction for those on certain benefits. Few will be aware of just how many different extras are now on offer, covering everything from broadband contracts to court fee remission. At least 20 different schemes are topping up the incomes of those already receiving tens of thousands each year from the state in benefit payments that are intended to have already covered their essential living costs.
In my new report for Onward think tank, The Hidden Benefits Bill, I reveal the true cost of all these passported benefits: over £10 billion. The rollout of Universal Credit, which was meant to do away with the need for all these piecemeal legacy schemes, has dragged on so long that new schemes have now been added and existing ones enlarged.
It is no coincidence that the two major passported benefits that the Labour Government has decided to expand this year are free school meals and the Warm Home Discount. They are some of the only passported schemes that are measured in poverty statistics as additional effective income, while almost all others go uncounted. By bringing more people into these schemes, they can claim to have lowered poverty despite the changes poorly targeting those most in need.
From this year, the Warm Home Discount will automatically apply a flat £150 rebate to the energy bills of all households on Universal Credit, regardless of how energy efficient or low usage their home is. Likewise, expanding free school is set to cause chaos for school and local authority funding which uses free school meals as a marker of deprivation for the National Funding Formula, the Pupil Premium, eligibility for the Holiday Activities and Food Programme and extended rights to free home-to-school transport.
With the end of the rollout of Universal Credit finally in sight this Parliament, now is precisely the time that the Government should be looking to rationalise these schemes, not adding to them further. Instead, the Labour Government has ruled out any new welfare legislation for at least the next year following the disability benefit reform debacle. The bill to taxpayers and consumers will only grow further as a result.
Some would argue that £10 billion is a price worth paying for targeted support schemes – that it’s the cost of a civilised society that takes care of its most vulnerable. If only it …
Who's accountable for the results?
Caroline Elsom is Head of Government Reform at Onward.
The catastrophic cost of Britain’s benefits bill is no secret. But the already eyewatering sums are usually missing a crucial part of the welfare system – all of the extra payments, discounts and freebies that claimants can receive on top of their regular benefits.
Many of these schemes, known as passported benefits, will be familiar to readers, like free school meals, free prescriptions or council tax reduction for those on certain benefits. Few will be aware of just how many different extras are now on offer, covering everything from broadband contracts to court fee remission. At least 20 different schemes are topping up the incomes of those already receiving tens of thousands each year from the state in benefit payments that are intended to have already covered their essential living costs.
In my new report for Onward think tank, The Hidden Benefits Bill, I reveal the true cost of all these passported benefits: over £10 billion. The rollout of Universal Credit, which was meant to do away with the need for all these piecemeal legacy schemes, has dragged on so long that new schemes have now been added and existing ones enlarged.
It is no coincidence that the two major passported benefits that the Labour Government has decided to expand this year are free school meals and the Warm Home Discount. They are some of the only passported schemes that are measured in poverty statistics as additional effective income, while almost all others go uncounted. By bringing more people into these schemes, they can claim to have lowered poverty despite the changes poorly targeting those most in need.
From this year, the Warm Home Discount will automatically apply a flat £150 rebate to the energy bills of all households on Universal Credit, regardless of how energy efficient or low usage their home is. Likewise, expanding free school is set to cause chaos for school and local authority funding which uses free school meals as a marker of deprivation for the National Funding Formula, the Pupil Premium, eligibility for the Holiday Activities and Food Programme and extended rights to free home-to-school transport.
With the end of the rollout of Universal Credit finally in sight this Parliament, now is precisely the time that the Government should be looking to rationalise these schemes, not adding to them further. Instead, the Labour Government has ruled out any new welfare legislation for at least the next year following the disability benefit reform debacle. The bill to taxpayers and consumers will only grow further as a result.
Some would argue that £10 billion is a price worth paying for targeted support schemes – that it’s the cost of a civilised society that takes care of its most vulnerable. If only it …
Caroline Elsom: Hidden benefits are breaking our welfare system and proving there’s ‘no such thing as a free lunch’
Who's accountable for the results?
Caroline Elsom is Head of Government Reform at Onward.
The catastrophic cost of Britain’s benefits bill is no secret. But the already eyewatering sums are usually missing a crucial part of the welfare system – all of the extra payments, discounts and freebies that claimants can receive on top of their regular benefits.
Many of these schemes, known as passported benefits, will be familiar to readers, like free school meals, free prescriptions or council tax reduction for those on certain benefits. Few will be aware of just how many different extras are now on offer, covering everything from broadband contracts to court fee remission. At least 20 different schemes are topping up the incomes of those already receiving tens of thousands each year from the state in benefit payments that are intended to have already covered their essential living costs.
In my new report for Onward think tank, The Hidden Benefits Bill, I reveal the true cost of all these passported benefits: over £10 billion. The rollout of Universal Credit, which was meant to do away with the need for all these piecemeal legacy schemes, has dragged on so long that new schemes have now been added and existing ones enlarged.
It is no coincidence that the two major passported benefits that the Labour Government has decided to expand this year are free school meals and the Warm Home Discount. They are some of the only passported schemes that are measured in poverty statistics as additional effective income, while almost all others go uncounted. By bringing more people into these schemes, they can claim to have lowered poverty despite the changes poorly targeting those most in need.
From this year, the Warm Home Discount will automatically apply a flat £150 rebate to the energy bills of all households on Universal Credit, regardless of how energy efficient or low usage their home is. Likewise, expanding free school is set to cause chaos for school and local authority funding which uses free school meals as a marker of deprivation for the National Funding Formula, the Pupil Premium, eligibility for the Holiday Activities and Food Programme and extended rights to free home-to-school transport.
With the end of the rollout of Universal Credit finally in sight this Parliament, now is precisely the time that the Government should be looking to rationalise these schemes, not adding to them further. Instead, the Labour Government has ruled out any new welfare legislation for at least the next year following the disability benefit reform debacle. The bill to taxpayers and consumers will only grow further as a result.
Some would argue that £10 billion is a price worth paying for targeted support schemes – that it’s the cost of a civilised society that takes care of its most vulnerable. If only it …
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