WELFARE: Benefit reform fails to cut costs

Attempts to cut back sharply on the amount of benefit paid to people unable to work through disability or illness have proved much harder than expected, with only half the expected number of claimants being disqualified from benefits, according to a report by the National Audit Office.

The Government had hoped to make savings of pounds 415m, out of spending of around pounds 7.5bn, through introducing the incapacity benefit in April 1995 to replace sickness and invalidity benefits, because the new system had tighter rules designed to bar many people from the benefit. However, savings were pounds 135m less than forecast because the Benefits Agency was unable to process as many cases as planned and was unable to disallow as many claims as expected.