Some figures to correct

On Thursday, when I reviewed some of the Daily Telegraph‘s figures on benefits, I took it that some of the wilder statements were down to the Telegraph reporter. Discovering similar figures in the Daily Mail made me wonder if they didn’t come from a common source, and on checking I found that they did: the main source is the Secretary of State for Work and Pensions.

In his speech to the Conservative conference at the beginning of October, Iain Duncan Smith said this:
“just before the election, in one year, Labour spent £90 billion on working age welfare – the same as the entire education budget for that very same year. … To put this in perspective, by 2010 this increase in welfare spending cost every household in Britain an extra £3,000 a year in tax.”

The Cabinet Office report for the Coalition, The State of the Nation (2010), claimed that “At least 12 million working-age households receive benefits each week (including tax credits and Child Benefit) at a cost of around £85 billion per annum” (p 10). With 20.4 million households in the UK, the cost per household was £4166. The DWP’s figures for the cost of working age benefits in 1997-98 are £31.3 bn in nominal terms and £46.4 billion in real terms. However, those figures exclude Child Benefit at £7 billion and Family Credit, the precursor of Tax Credits, at £2.3 billion; so the nominal figure for 1997 is £40.6 billion, which at the time with 18.7 million households was £2167 per household. So it is not true, even taking the figures in nominal terms, that households in 2010 were having to pay an extra £3000 a year for ‘working age’ welfare.

A second point raised in the Telegraph was the cost of “troubled” families. I questioned at the time whether this was an ‘official’ statistic’; but I have since found that it has been used by the Prime Minister, the DWP, the Home Office and the DCLG, and I have to concede that it is. The Prime Minister said last year:
“We’ve always known that these families cost an extraordinary amount of money but now we’ve come up the actual figures. Last year the state spent an estimated £9 billion on just 120,000 families – that is around £75,000 per family.”

There are two key figures here. The first is the number of families, which comes from a confusion between families with disadvantages and families which cause trouble. Professor Ruth Levitas, of the University of Bristol, has made a detailed analysis of the claims. She comments: “The most charitable explanation is that their research is statistically incompetent.” The second is the estimate of cost. The only detail I have about the costing is a statement from the Home Office that £2.57billion of this is attributed to crime and criminal justice. I haven’t been able to find any basis for the costings, and Ruth Levitas didn’t either.

One comment

  1. Nick Bailey

    Paul

    On the last point about the claim that ‘troubled families’ cost £9bn, various people have made Freedom of Information requests to find out the basis for this figure. The response has been that the Government is going to publish an explanation soon so it doesn’t need to tell them just now (but won’t give a precise date).

    You might have expected that they would have checked their figures before making such a stark claim but apparently not …

    Nick

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