Rushed £5bn in PIP cuts is deeply flawed and likely unworkable

By Arun Veerappan, Interim Director of Research, 5-6 minute read.

Originally published on LinkedIn on 8th March 2025.

  • Current framing of issue assumes the target goal of welfare spending is zero, encouraging cost-cutting over consideration of value.

  • Government is likely to prioritise changes that reduce legal or consultation risk - review periods, medical evidence and uprating - rather than reforming descriptors or whole PIP system.

  • Proposals will significantly increase challenges for disabled people, prove difficult to deliver, and ignore how actually supporting disabled people would deliver £20bn to Treasury by 2030 anyway.

The Prime Minister promised to tackle the UK’s “bulging benefits bill,” in November, and ahead of the Spring Statement on 26th March, the Government is now expected to cut at least £5bn from Personal Independence Payment (PIP), the main working-age disability benefit (ITV, 2025).

The proposals appear to include tightening eligibility and freezing awards, a deeply flawed approach that prioritises cost over value:

A purple box, with a white border and large white speech marks. at the bottom is the dpc logo and an image of Arn Veerappen. there are two graphic to the right, on of pink green and yellow charts and another of two people talking over a table

The Problem

Framing disability benefits as a bill reduces the issue to a cost-problem, implicitly suggesting the optimal value is zero. This leads the Government to prioritise what can be cut without legal challenge or lengthy consultation.

By presenting disability as a "bill" that needs to be slashed, the implicit assumption is that the optimal level of spending is none at all. This contrasts other areas of spending such as the NHS, where we want to see value for patients as well as the taxpayer, rather than cost-cutting wherever possible.

Last November, we warned here that rising PIP caseloads - now at 3.6 million claimants with a third receiving the highest award - would likely require the Chancellor to announce further cuts to stay within self-imposed fiscal rules - unless a new approach was adopted (OBR, 2024, DWP, 2025).

The drive now for quick savings therefore means avoiding those changes that require prolonged consultation or significant legal risk. This is particularly relevant following the High Court ruling in January that deemed the previous government's consultation on Work Capability Assessment (WCA) to be unlawful (Benefits and Work, 2025).

The Government's Solution

Proposed £5bn cut in PIP likely to come from freezing thresholds, more frequent reviews and changing the role of evidence - where previous attempts to change descriptors have failed.

Previous legal challenges will shape the current approach to cuts. The Upper Tribunal in 2016 ruled that those with mental health conditions facing psychological distress when travelling should qualify for PIP's mobility component. When the government tried to reverse this, the High Court ruled the change unlawful in 2017 (MH vs SS Work and Pensions, 2016, Inclusion London 2017).

Given this precedent, we see four ways that the Government might look to quickly cut £5bn from PIP spending by 2029-30:

  • Up to £2.0bn from Freezing Benefit Uprating: Holding PIP and other disability benefits at current levels, instead of them increasing with September CPI inflation. Reported to be announced, the Social Security Administration Act 1992 allows Ministers discretion over uprating, providing a lower legal hurdle. This is not without risk though as still requires assessment of impact, justification and secondary legislation to implement. We estimate this based on OBR spending projections for all disability benefits including PIP.

  • Up to £0.6bn from More Frequent Assessments: Shortening award periods, particularly for those with mental health or fluctuating conditions, leading to more frequent reviews. We estimate this saving based on Public Accounts Committee overpayment rates from Jan-2025.

  • Up to £1.7bn from Tighter Evidence Requirements: Raising requirements on medical proof could result in more unsuccessful claims, which many applicants are too demoralised to challenge at appeal. We estimate this based on application and DWP customer journey data.

  • Up to £0.7bn from digitalisation and streamlining? This has not been reported, but we consider this where the DWP is undergoing a Transformation agenda and the Autumn Statement saw measures to digitalise or automate processes to save costs. However, we remain sceptical where claimants spent 753 years on hold to to the DWP in 2023-24, and you still can't apply for PIP online (Public Accounts Committee, 2025).

Whilst we wait for the government to confirm further details, we estimate that delivering more than 45% or £2.3bn of these cost-cuts quickly will be difficult, without facing significant legal or consultation challenges.

A Better Approach

Whilst these proposals make an already challenging and difficult process for disabled people even harder, a focus on the value of the welfare system would see better outcomes for all.

Tougher assessments, more frequent reviews, and stricter medical evidence requirements will simply push more claimants into exhausting and lengthy tribunal processes - 70% of which are successful, and nearly all (96%) are without new evidence (Benefits and Work, 2024).

PIP is meant to cover the extra costs of disability, which Scope (2024) estimates at £1,010 per month—a third higher than the maximum PIP award. Freezing thresholds would simply mean that by 2030, PIP would cover less than 60% of disabled people’s additional costs.

Instead, the Government should ask: what value do we place on supporting disabled people and unpaid carers? What value do we place on helping those with long-term health conditions into suitable work?

In doing so, we would reach very different conclusions, focussing on removing the barriers facing disabled people every day. We would incentivise employers to offer flexible and part-time jobs to eliminate the £38bn employment gap, such as by super-deducting occupational health, offering NI employer incentives or reforming job centres (read more here). These are measures that would also deliver £20bn to the Treasury in fiscal gains from additional tax and lower welfare spending by 2030 too. Under this approach we would also address delays and barriers for the 55,000 disabled people waiting for Access to Work, or ensure better funding for home adaptions through Disabilities Facilities Grant as well.

The measures currently being considered take us nowhere towards this future. There is a better path —one that values and invests in disabled people - that should be adopted instead.

References

Benefits and Work, DWP loses WCA changes High Court battle, Source online.

Department for Work and Pensions (2025), Benefit expenditure and caseload tables. Source online.

ITV News (2025) Details of more than £6bn in welfare cuts revealed. Source online.

Office for Budget Responsibility (2024). Welfare Trends Report (WTR) October 2024. Source online.

MH v Secretary of State for Work and Pensions (PIP) (2016). [2016] UKUT 531 (AAC) ; [2018] AACR 12

Public Accounts Committee (2025) Disability benefits claimants at increased risk of hardship as DWP underpayments rise. Source online.

Scope (2024): Disability Price Tag. Source online.