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Government 'could breach its own welfare spending cap' Government 'could breach its own welfare spending cap'
(about 1 hour later)
The government is at risk of breaching its self-imposed cap on welfare spending due to the cost of the main sickness benefit, leaked documents say. The government could breach its self-imposed cap on welfare spending as a result of the cost of the main sickness benefit, leaked documents say.
Internal government memos seen by the BBC suggest Employment and Support Allowance (ESA) costs are rising and few cost-cutting options are available.Internal government memos seen by the BBC suggest Employment and Support Allowance (ESA) costs are rising and few cost-cutting options are available.
In March MPs agreed a 2015-16 welfare cap of £119.5bn, excluding the state pension and some unemployment benefits.In March MPs agreed a 2015-16 welfare cap of £119.5bn, excluding the state pension and some unemployment benefits.
Ministers say welfare spending will come in under the cap.Ministers say welfare spending will come in under the cap.
If the limit is breached, ministers will have to explain to Parliament and ask MPs to approve additional spending.If the limit is breached, ministers will have to explain to Parliament and ask MPs to approve additional spending.
It emerged on Thursday that the leaked memos say ESA - which is paid to ill and disabled people who are unable to work or need help to work - is "one of the largest fiscal risks currently facing the government".
The cost of ESA is projected to rise by nearly £13bn between the current financial year and 2018/19, the documents say.
'Vulnerable' to breach'Vulnerable' to breach
ESA was introduced in 2008 to replace Incapacity Benefit - intended for people who are unable to work because of sickness or disability.
Claimants undergo tests to see how their illness or disability affects their ability to work before learning whether they are eligible.
A key aim of the benefit is to get people off welfare and into work.
It emerged on Thursday that the leaked memos say ESA is "one of the largest fiscal risks currently facing the government".
The cost of ESA is projected to rise by nearly £13bn between the current financial year and 2018-19, the documents say.
The papers suggest the main reason for the rising cost of ESA is an increasing number of claimants, caused by people moving off Jobseeker's Allowance and on to ESA.The papers suggest the main reason for the rising cost of ESA is an increasing number of claimants, caused by people moving off Jobseeker's Allowance and on to ESA.
BBC social affairs correspondent Michael Buchanan said that, according to those writing the papers, this was because ESA has fewer sanctions - when someone's benefit is stopped for misconduct - than Jobseeker's Allowance.BBC social affairs correspondent Michael Buchanan said that, according to those writing the papers, this was because ESA has fewer sanctions - when someone's benefit is stopped for misconduct - than Jobseeker's Allowance.
The documents also say the severity of ESA claimants' illnesses and disabilities has been underestimated - meaning people are staying on the benefit longer than expected.The documents also say the severity of ESA claimants' illnesses and disabilities has been underestimated - meaning people are staying on the benefit longer than expected.
The memos reveal a range of options for reducing costs, but conclude there appears to be "not much low-hanging fruit left".The memos reveal a range of options for reducing costs, but conclude there appears to be "not much low-hanging fruit left".
"This leaves us vulnerable to a breach [of the cap]", says one memo."This leaves us vulnerable to a breach [of the cap]", says one memo.
'Fiasco''Fiasco'
Problems with the private firm Atos, which has carried out benefit health assessments for the government, have also increased ESA costs.Problems with the private firm Atos, which has carried out benefit health assessments for the government, have also increased ESA costs.
Earlier this month ministers said more than 700,000 people were waiting for an assessment for ESA.Earlier this month ministers said more than 700,000 people were waiting for an assessment for ESA.
It blamed the delays on Atos, which has agreed to end its contract early.It blamed the delays on Atos, which has agreed to end its contract early.
But the leaked documents say the new contractor - due to be appointed in early 2015 - is expected to cost roughly "three times as much" as the £100m annual deal with Atos.But the leaked documents say the new contractor - due to be appointed in early 2015 - is expected to cost roughly "three times as much" as the £100m annual deal with Atos.
The memos have come to light as a report by MPs brands the implementation of another disability benefit, Personal Independence Payments (PIP), a "fiasco".The memos have come to light as a report by MPs brands the implementation of another disability benefit, Personal Independence Payments (PIP), a "fiasco".
PIP is replacing Disability Living Allowance, but the Commons Public Accounts Committee said the reform had been "rushed", with claims delayed by over six months in some cases.PIP is replacing Disability Living Allowance, but the Commons Public Accounts Committee said the reform had been "rushed", with claims delayed by over six months in some cases.
Committee chair Margaret Hodge said the Department for Work and Pensions had "let down some of the most vulnerable people in our society". Committee chairman Margaret Hodge said the Department for Work and Pensions had "let down some of the most vulnerable people in our society".
Do you claim Employment and Support Allowance? Do you receive Personal Independence Payments? You can email your experiences to haveyoursay@bbc.co.uk using the subject line 'Welfare'.Do you claim Employment and Support Allowance? Do you receive Personal Independence Payments? You can email your experiences to haveyoursay@bbc.co.uk using the subject line 'Welfare'.