Government spending is monitored by the Office of Budget Responsibility (OBR), which was formed in 2010.
The OBR produce reports twice a year into government spending, these incorporate the impact of any tax and spending measures announced in statements made by the Chancellor of the Exchequer.
The OBR use the public finance forecasts to judge the Government’s performance against its fiscal targets
In January 2017 the Government set itself two new medium-term fiscal targets: first, for the structural deficit (cyclically adjusted public sector net borrowing) to be below 2% of GDP by 2020-21; and second, for public sector net debt to fall as a share of GDP in 2020-21.
The OBR assess whether the Government has a greater than 50% chance of hitting these targets under their current policy.
Since March 2014, the government has also set a self-imposed cash limit on a subset of its social security and tax credit spending (the ‘welfare cap’). In Autumn Statement 2016 the Government redefined the cap so that it applies only in 2021-22, preceded by a ‘pathway’ to that fixed date. There is also a requirement for the Government to set a new welfare cap in the first Budget of a new Parliament. In the Autumn Statement of 2017, the cap was adjusted and applied to 2022-23. The OBR monitor progress against the pathway and assess whether or not the government is on course to meet the cap in the target year.
At any one time, over half of all families receive income from at least one benefit in the welfare system. Most people will receive one or more welfare payments for well over a third of their lives (including child benefit when young and the state pension when retired).
The spend on welfare for 2015/16 was £216 billion.
The figures produced by the OBR have been amended to reflex the correct % to £ ratio
State Pensions are the largest single item of welfare spending at £89 billion, 41% *
Personal Tax Credits are paid mostly to families with children, the cost of this is around £29 billion, 13%
Housing Benefit is paid mostly to people of working age, the cost of this is around £24 billion. 12%
Disability Benefits accounted for around £22 billion, 10%
Incapacity-related benefits accounted for around £15 billion, 7%
Child Benefit (This benefit is available for most children 18 years of age or younger) accounted for around £11 billion, 5%.
Pension Credit accounted for around £7 billion, 3%
Jobseeker’s Allowance (paid to eligible people who are unemployed, actively looking for work.) accounted for around £2 billion, 1%.
The remaining £17 billion, 8% of welfare spending is on the following:
A range of benefits in Northern Ireland, which are administered separately.
A number of smaller benefits including carer’s allowance, statutory maternity pay, income support and winter fuel payments.
A report has been published “An OBR guide to welfare spending” The report can be viewed here
© 2018 Office for Budget Responsibility
*Why is State Pensions classed as welfare spending. It is not.
A Government statement says “You pay National Insurance contributions to qualify for certain benefits and the State Pension.”
If the State Pension and a number of benefits are paid for by National Insurance but are classed as welfare, where is the National Insurance Money, and where does it go?
If the pension is welfare benefit then is it not paid for by Taxation?
Here is a link to their National Insurance Website
|Pension Credit||Disabled Facilities Grants||Budgeting Loans|
|Childcare Grant||Incapacity Benefit replaced by ESA||Christmas Bonus|
|Guardian’s Allowance||Industrial Injuries Disablement Benefit (IIDB)||Disability premium|
|Parents’ Learning Allowance||Personal Independence Payment (PIP)||Warm Home Discount Scheme|
|Healthy Start||Severe Disablement Allowance replaced by ESA||Carer’s Allowance|
|Maternity Allowance||Vaccine Damage Payment||Free or discounted TV licence|
|Maternity pay and leave||Constant Attendance Allowance||Blind Person’s Allowance|
|Paid time off for antenatal care||Bereavement Support Payment||Cold Weather Payment|
|Sure Start Maternity Grant||Funeral Expenses Payment||Attendance Allowance|
|Carer’s Credit||Bereavement Allowance||Council Tax|
|NHS continuing healthcare funding|
How many of the above benefits are you aware of? Not all are widely publicised?
13th April 2018