Welfare budget faces further £7bn in cuts

The Chancellor announced more welfare reforms, including a fresh crackdown on benefit fraud, aimed at making £7 billion worth of cuts on top of previously announced savings of £11 billion.

The current "complex" system of means-tested working age benefits and tax credits will gradually be replaced by a Universal Credit that will "sharpen" work incentives and reduce fraud and error, Mr Osborne said.



But he pledged that low income families with children would be protected from the adverse effects of the "essential savings".



One way this would be achieved was through an increase in the child element of the Child Tax Credit by a further £30 in 2011-12 and £50 in 2012-13 above inflation, he said



He defended the decision to axe child benefit for high earners and scotched speculation that it would be scrapped for all children over 16.



The package of welfare reforms includes freezing the working tax credit for three years from next April, changing working tax credit eligibility and ending payment of the mobility component of the Disability Living Allowance.



The Government announced welfare savings of £11 billion in June's emergency budget, so the total is now £18 billion a year by 2014/15.



A White Paper will soon be published by the Work and Pensions Department which will give details of £2 billion being set aside to fund the new Universal Credit.



A new work programme is also being launched, offering personalised support for jobseekers with the greatest barriers to employment.



Private and 'third sector' providers will be paid on the basis of additional benefit savings they make.



The DWP's administration budget will also be reduced by 35% and its core budget reduced by 26% in real terms by 2014/15 by cutting corporate overheads, reducing the costs of benefit processing and replacing "wasteful and ineffective" welfare to work programmes.



The department said it will stop issuing National Insurance cards to customers and send letters instead, saving the taxpayer £1 million a year, stop issuing a remittance advice with every weekly payment of a back to work credit or training premium, saving up to £3 million a year, and change how Jobcentre Plus measures performance, cancelling at least two target management contracts, with an annual saving of at least £1.2 million.











Work and Pensions Secretary Iain Duncan Smith said: "This settlement allows the department to undertake the vital reform of the welfare system that the country needs.

"A welfare system that does not trap people into an endless cycle of benefits but instead helps them into work that pays, alongside a pension system that is fair and sustainable for the long term."











The Government announced further plans to cut housing benefit payments, by increasing the age threshold for the so-called shared room rate in housing benefit from 25 to 35.



From 2012, single people under 35 will be paid a shared room rate rather than a rate for a full flat.



The shared room rate is lower than all other housing benefit payments and is currently paid to claimants under 25. It is based on the amount of rent charged for a single room with shared use of the rest of a house.



The government said it expects that raising the age at which the shared room rate can be paid will save £215 million by 2014/15.



The Chancellor said: "This will ensure that housing benefit rules reflect the housing expectations of people of a similar age not on benefits."



Campbell Robb, chief executive of Shelter, said: "The combined worry of cuts to housing benefit and the slashing of the affordable house building subsidy, coupled with the absence of a long-term strategy, will be devastating for the housing aspirations of thousands of young people consigned to increasing costs and bringing up their families in an insecure private rented sector."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Arts and Entertainment
The Apprentice finalists Mark Wright and Bianca Miller
tvBut who should win The Apprentice?
News
The monkey made several attempts to revive his friend before he regained consciousness
video
Extras
indybest
News
Elton John and David Furnish will marry on 21 December 2014
peopleSinger posts pictures of nuptials throughout the day
Sport
Brendan Rodgers looks on from the touchline
SPORT
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: National Account Manager / Key Account Sales

£30000 - £35000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Operations Manager

£30000 - £35000 per annum: Recruitment Genius: An exciting opportunity to join...

Recruitment Genius: Recruitment Consultant

£30000 - £35000 per annum: Recruitment Genius: We have an excellent role for a...

Recruitment Genius: IT Support Analyst - Bristol

Negotiable: Recruitment Genius: An IT Support Analyst is required to join the ...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick