Unemployment is not about to triple – is it?

I was idly poring through the most recent edition of the DWP’s Benefit Expenditure and Caseload Tables – I know, it’s sad – when I came across this striking sequence of data, in the table headed “Unemployment benefits”.

2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26
Outturn Forecast Forecast Forecast Forecast Forecast Forecast
Expenditure, £m (real terms)
20,119 38,564 41,873 42,680 45,298 50,373 57,990
Caseload, 000s
2,330 4,284 4,509 4,544 4,714 5,192 5,953

By that reckoning, both caseload and expenditure will increase to two and a half times their current level.  There will be nearly six million people unemployed.

There are two possible explanations for this.  One, which I think implausible, is that the government is anticipating a massive and prolonged surge in unemployment as a result of the pandemic and Brexit.  The scenario is not beyond imagination, but I don’t think it at all likely,  even if it was true, that the government would build it into their medium-term forecasts.

The second, which is much more likely, is that the figures represent the anticipated caseload of Universal Credit, currently being counted without any distinction between people who are unemployed and the rest. At the moment, Universal Credit is mainly performing two functions: payments to people who are unemployed, and payments to people on low earnings.  As time goes on, it will also be taking in more and more people on ‘legacy benefits’, and the largest group of people in that category  are nearly two million people currently receiving Employment and Support Allowance. There may well be some people on ESA who are really unemployed, but all of them are  sick or incapacitated.  Bear in mind that the basic, central criterion for receipt of the benefit is that these people are sick, and cannot be expected to work.  That’s not just me saying that. This is the text of the 2012 Welfare Reform Act:

37 Capability for work or work-related activity
(1) For the purposes of this Part a claimant has limited capability for work if—
(a) the claimant’s capability for work is limited by their physical or mental
condition, and
(b) the limitation is such that it is not reasonable to require the claimant to
work.     

Anyone who applies for ESA has to show that they have limited capability for work, tested not (as it once was, and should be) by doctors who know their patients,  but by an elaborate points scheme.  The whole point of providing a long term sickness benefit is to make provision that does not depend on people seeking work.

What the forecasts tell us is that the government currently intends to make no distinction between people who are unemployed and people who cannot reasonably be expected to work.  They will all be counted as receiving unemployment benefits.

One thought on “Unemployment is not about to triple – is it?”

  1. I wonder if their eventual goal is to treat people who can’t reasonably be expected to work the same as the unemployed. They already took away the additional amount given to people in the WRAG/LCW group, leaving them with the same income as jobseekers.

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