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The work and pensions secretary, Liz Kendall, has said helping more people back into a job is the best way to cut the benefits bill, as the chancellor looks for savings ahead of the 26 March spring statement.
With Rachel Reeves zeroing in on welfare as a source of potential cuts as she prepares to take action to meet her self-imposed fiscal rules, Kendall said the starting point must be getting people back into work – not numbers on a spreadsheet.
“I think the only way that you get the welfare bill on a more sustainable footing is to get people into work. And you know, we will be bringing forward big reforms that actually support people into work, that get them on a pathway to success,” Kendall said.
The Department for Work and Pensions (DWP) is due to publish a green paper on welfare in the coming days, before Reeves’s statement.
With the independent Office for Budget Responsibility (OBR) expected to downgrade its growth forecasts against the backdrop of a deteriorating global economy, the chancellor is preparing to make spending cuts to ensure she can still meet her fiscal targets.
Kendall refused to comment on specific policy changes. “I want to be really clear about our objective: it’s reforming the system, changing the system to provide people with the support that they need because that’s the only way,” she said.
However, she repeatedly declined to deny reports that the Treasury is seeking up to £5bn in cuts.
With the OBR unlikely to pencil in uncertain future savings from supporting people into employment, analysts believe cuts on such a scale will be impossible to achieve without making it harder to claim benefits, or reducing their value.
One senior government source hinted at radical change, describing the current system as “completely busted”, adding: “You don’t need the OBR to tell you it’s not working.”
Challenged about how ministers made the sums add up, Kendall said: “We don’t start from a spreadsheet, we start from people. We start first, last and always with people, who’ve actually got hopes and dreams.” Asked whether she and Reeves were at loggerheads over the scale of spending cuts necessary, Kendall said “not at all”. “She’s passionate about reform, about changing the system.”
Some Labour strategists consider taking a tough line on benefits claimants as a way of appealing to rightwing voters who might otherwise defect to Reform.
But Kendall said Labour’s focus was on supporting people in need of help. “The Tories would have you believe that everybody on benefits, the sick and disabled, are skivers and scroungers. It’s just not true,” she said.
The pensions secretary was speaking to the Guardian while visiting a jobcentre in Tower Hamlets, east London, where she met benefits claimants and work coaches.
One man, Douglas, told her he had battled addiction with the help of a mentor from Change Grow Live, a charity contracted by the DWP to help clients with substance abuse issues, and was now working for them. Another man, Imran, said he had recently started an apprenticeship to become a work coach after 18 months out of work during which he said he became so depressed he was barely able to get out of bed.
Kendall said cases such as these showed how the DWP could work better. “If we free up our work coaches’ time from ridiculous tickbox benefit administration to be more about personalised support, more time, more joined up with employers, with health, with skills, there’s a lot we can do within existing resources to make sure we change the way we work,” she said.
The DWP is redeploying 1,000 of the coaches, who meet face to face with benefits claimants, so that they can provide more time for those in need of extra support.
Kendall also met the TUC general secretary, Paul Nowak, and the PCS president, Martin Cavanagh, to discuss the challenges for the Jobcentre Plus workforce.
Nowak warned against a below-inflation pay settlement for the public sector staff expected to implement the government’s new policies. “If you’re serious about rebuilding public services, you’ve got to be serious about supporting the staff in public services,” he said.
