How to reduce pressure on welfare spend in a popular and lasting way

Andy Burnham became prime minister this week. He recently said he wants to bring the social security bill down by tackling underlying problems with jobs, health and the housing market, rather than ‘crude cuts’.¹ The public agrees with this.

I’m not going to go with the crude cuts to benefit levels that then just put people who are struggling in even worse poverty.

Andy Burnham, Tonight with Andrew Marr (LBC), 2 July 2026

The popular and effective approach to reducing pressure on social security

JRF and Trussell research with More in Common finds public concern with the social security system is high, but this does not translate into widespread support for blunt cuts. When asked what approach to reducing social security spend the Government should take, more than twice as many people want the Government to do this by tackling the underlying causes of people's need to claim benefits (59%) rather than by restricting eligibility (20%) or cutting benefit rates (8%).

The new prime minister and the public are right to connect the cost of social security to underlying problems in the economy, such as worsening health, people locked out of good jobs, and a dysfunctional housing market. Our safety net is carrying too much of the cost of economic failures elsewhere, and addressing these at root would significantly reduce pressure on it and improve economic security. We look at 2 examples: boosting employment and lowering housing costs.²

Increasing employment relieves pressure on Universal Credit (UC)

Weak local economies mean there are not enough decent jobs in many areas of the country. People not receiving the support they need to fulfil their potential also means fewer people able to access good jobs. These economic and policy failures mean employment is suppressed, resulting in higher levels of need for Universal Credit (UC).

Every 100,000 extra people in work reduces UC spend by around £700 million a year. If the Government hit its 80% employment rate target, annual UC spend would be around £10 billion lower.

Source: JRF modelling³

This modelling does not consider the medium- to long-term benefits to public health of a stronger economy, so does not include potential further savings from a healthier population leading to even lower need for health-related benefits.

Government policy needs to drive the creation of more good jobs, particularly in areas with the weakest local economies, and improve support (such as employment support, training, childcare and an adequate safety net) to boost people’s job prospects.

The size of impact on social security depends on where and who benefits most from employment gains. Currently, inflexible jobs and inadequate occupational health mean too many people are forced to leave work if they become ill, and disabled people have fewer suitable opportunities for work.

Every 100,000 people receiving health-related UC who move into work reduces UC spend by around £1.3 billion.

Source: JRF calculation⁴ based on Office for Budget Responsibility (OBR) average savings

The Government needs to improve healthcare and reshape the labour market to work better for disabled people. It should be focusing on how to shift employer attitudes, make jobs more adaptable for disabled people and supportive when employees become ill, with more in-work support for both employees and employers. It should focus on reforms to the health-related benefit system that de-risk work, and better support disabled people who want to work, not on cuts to support.

Lowering rents relieves pressure on housing benefits

A lack of social housing twinned with an expensive private rented sector (PRS) means there is greater need for support with housing costs than if people could access more affordable housing. Increasing the country’s social housing stock would lower rents, reducing spending on housing benefits.

Building 100,000 new social homes could directly reduce spending on UC’s housing element by around £300 million a year.

Source: JRF calculation⁵ based on research by the Centre for Economics and Business Research (Cebr) for Shelter and the National Housing Federation (NHF)

This represents only the direct savings in housing benefits from lower rents. There could be further potential UC savings because a stable home can increase people’s access to employment and their productivity.

Meanwhile, in the PRS, action can and should be taken to address unaffordable rent rises.

Introducing moderate rent controls would reduce spending on UC’s housing element by around £800 million a year.

Source: JRF modelling⁶

This is based on recent JRF proposals for rent controls⁶ in the PRS coupled with tax reform that would make them feasible to deliver.

It’s right to avoid counterproductive and unjustified crude cuts to support

The examples above illustrate the scale of pressure on our safety net that could be relieved with a bold and popular focus on addressing the underlying causes of people’s need for support, rather than crude short-term cuts.

Recent cuts have been harmful and counterproductive

The new prime minister’s, and the public’s, instinct that simple cuts to support are crude and often counterproductive is also correct. Evidence from recent benefit cuts show they had little or no employment impacts, but worsened hardship and health, damaging future employment prospects and shifting costs elsewhere.

For example, sharp cuts to health-related support in UC in 2017 led to a 5 percentage-point increase in severe poverty and 14 percentage-point increase in poor mental health amongst people with long-term health conditions, with no improvement in employment outcomes.

The social security bill is not spiralling

Tackling the root causes of pressure on our safety net will need political ambition and time, but it is the right and popular approach, and will bear fruit.

The dominant political narrative of a spiralling welfare bill creates pressure for urgent cuts. But this narrative is inaccurate: while total spending on non-pensioner benefits has risen since pre-pandemic, it represents around 5% of the size of our economy and is projected by the OBR to remain flat at that level over the next 5 years.

Social security reform that is needed

The public are indeed strongly concerned about social security, because they feel it is not the strong safety net that everyone might need to rely on. Over 4 in 5 people say it is important personally that the social security system adequately protects people when they need it, and this cuts across the political spectrum.

However, fewer than 1 in 10 think the system is able to do this, with most others feeling it is under strain or overstretched. This chimes with JRF’s data showing 5 in 6 low-income households receiving UC are going without essentials and, at just £98 a week, the basic rate of support falls well short of what’s needed to afford essentials.

The Government needs to reform our safety net to ensure everyone can at least afford life’s essentials, while tackling the root causes of economic insecurity would reduce pressure on social security in a popular and effective way.