Andy Burnham’s welfare conundrum

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An interim review into Personal Independence Payments, led by disability minister Stephen Timms and published last week, has described the system as “no longer fit for purpose” and in need of “fundamental change”.

So what? It could provide Andy Burnham with a springboard to overhaul the broader welfare system, but he will need to tread carefully. After all, this is an issue that ultimately helped doom Keir Starmer’s prime ministership. The interim report of the Timms review highlighted Pip’s

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  administrative complexity;

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  growing financial cost; and 

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  flawed assessment processes.

What is Pip? Pip was introduced by the Coalition government in 2013 and is intended to help cover the extra costs of living with a long-term illness and disability. The benefit is not means-tested, carries no requirement for claimants to work and is worth up to £194 a week.

The number of claimants has surged since the pandemic. More than 4m people now claim Pip, up from less than 2m in 2018. Its cost is projected to rise from £26bn to £41bn by 2030. 

Why? Part of the rise can be attributed to an increase in mental health diagnoses. About 100,000 claimants list ADHD as their main condition, an increase of 40% compared to 2024. 

Labour revolt. Keir Starmer ordered the Timms review after a botched attempt to toughen up the eligibility criteria for Pip. His changes would have shaved about £5bn off the Pip bill, a fairly insignificant sum in the context of the overall £333bn welfare spend. But Labour MPs rebelled against them, fearing they would deprive vulnerable people of a crucial financial lifeline.

Two views. Some disability campaigners believe the assessments for Pip are already too strict, while the benefit has been criticised for being too generous and fostering dependency.

Sympathetic ear. The Timms review will not issue final recommendations until autumn, but its interim report leaned towards the first viewpoint. It highlighted barriers to access and concerns that Pips do not “reflect the true cost of disability”.

At the same time, it also said Pips can discourage work, because claimants fear employment or volunteering work could be used as evidence of an improvement in their condition.

Tough decisions ahead. If Andy Burnham is to deliver on his promise to “rewire” Britain, he will need to grasp the nettle of welfare reform. Welfare currently accounts for £315bn of a total public spend of £1.4trn and is forecast to reach £410bn by 2030, and despite a record-high tax burden, there is precious spare cash sloshing about in Whitehall.

This will be difficult, not least because he hails from the ‘soft left’ of the Labour party, which led the Pip rebellion. He will need to avoid upsetting these MPs to keep them onside. But he also needs to prove to would-be Reform voters that he is taking the issue seriously.

The options. Burnham could revisit the idea of tightening eligibility requirements, or he could reduce the value of some benefits. But this seems unlikely given his political instincts and pledge to avoid “crude cuts”. Instead he will probably focus on reducing demand.

Clues. Burnham has already given indications he intends to pursue this path. He has promised a massive programme of council house building and described the growing number of young people not in education, employment or training (Neets) as “deeply concerning”.

Rebel with a cause. Burnham has a talent for latching onto a political cause and weaving it into a broader narrative, whether it’s buses or devolution. A review into Neets is currently developing solutions to get young people off benefits and into work, and Burnham could use these as the centrepiece of the skills agenda.

What’s more… Most Labour members want welfare spending to rise or remain at current levels, according to polling by YouGov.

Photograph by Dan Kitwood/Getty Images