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Autumn Statement 2023: Benefits to rise 6.7% but tougher sanctions on the way

Autumn Statement 2023: Benefits to rise 6.7% but tougher sanctions on the way
Paloma Kubiak
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Paloma Kubiak

The Government confirmed working age benefits will be uprated by 6.7% next April, but it has placed greater emphasis on getting people back to work, with tougher sanctions for disengaged claimants.

As part of today’s Autumn Statement, Chancellor Jeremy Hunt said he was aware of speculation that the Government would increase benefits next year by the lower 4.6% October inflation figure.

However, he said the cost-of-living pressures remain at their “most acute” for the poorest families.

“So instead, the Government has decided to increase Universal Credit and other benefits from next April by 6.7% in line with September’s inflation figure, an average increase of £470 for 5.5 million households next year. Vital support to those on the very lowest incomes,” Hunt said.

He added that for those who cannot work for legitimate reasons, “there must always be a safety net”.

But while unemployment has fallen by over one million people, post-pandemic there are still over seven million adults of working age (excluding students) who are not working, despite nearly one million vacancies in the economy.

“Many can and want to work, but our system makes that too hard”, Hunt said.

As such, the ‘Back to Work Plan’ will reform the fit note process so that treatment rather than time off work becomes the default.

The Work Capability Assessment will be reformed “to reflect greater flexibility and availability of home working after the pandemic” and £1.3bn will be spent over the next five years to help nearly 700,000 people with health conditions find jobs.

Meanwhile, the Universal Credit sanctions regime will be strengthened which will “further enforce the Government’s expectation that those who can work must engage with the support available or lose their benefits”.

If after 18 months of intensive support jobseekers have not found a job, claimants will be required to take part in mandatory work placement to increase skills and improve employability.

If people choose not to engage with the work search process for six months, their case will be closed and benefits will stop. This will also end their access to additional benefits such as free prescriptions and legal aid.

Reforms increase fear and distrust’

Melanie Wilkes, IPPR associate director for work and the welfare state, said:  “We welcome the expansion of specialist support for disabled people to go to work where there is no risk of a sanction. But at the same time, those who the Government thinks can work from home will be compelled to do so, or face a sanction if they don’t. This will increase fear and distrust at a time when the DWP is trying to reach people facing the greatest barriers to work.”

Bertrand Stern-Gillet, CEO at Health Assured, said: “The Back to Work Plan announced today with ‘treatment not time off as the default’ sounds promising on paper, but the reality could be very different. I will be interested to see what support the Government is planning to put in place for small organisations employing people coming back into work from long-term sickness. It could be somewhat naïve to look at working from home as a miraculous cure for all those with mental health and mobility conditions.

“For those already struggling with poor mental health, this plan could have a devastating impact if the correct support mechanisms are not put in place, including an occupational health provision.

“While it’s right the Government is looking for ways to support people back into work, it’s important that they ensure the proper support is in place both for the thousands of people this will impact as well as the organisations and employers hiring them.”