‘Fixing the Foundations’ is the phrase the Labour government wants in your head after the Budget. But the thin gruel for dealing with the challenge presented by our ill-health and disability benefits system suggests those words don’t count for much.

Apart from the defence of the realm, there is nothing more foundational to society than the way it treats its most vulnerable and most disadvantaged. Some people are, through no fault of their own, not able to work. Its the duty of the government to ensure that a safety net is in place to help these people; it must balance this by ensuring that the system is fair to the taxpayer. But conspicuous by its absence in the Budget were any proper measures for assessing Britain’s mounting benefits bill.

The Budget swerves the essential question which confronts the Labour government and the Conservatives before them: ‘In the world we have created today, can the foundation of ill-health and disability benefit be repaired by any government?’.

Instead, the Chancellor Rachel Reeves’s approach appears to be a decent paint job rather than the promised foundational repair. They’ve accepted, in this Budget, the target announced in last year’s Autumn Statement to save around £3 billion through changes to the Work Capacity Assessment. They will bring forward a Fraud, Error and Debt Bill, first announced by the Conservatives, intended to modernise the Department for Work and Pensions’ powers and they believe that fraud measures will save the Treasury £4.3 billion by the end of the decade. The £240 million given to local authorities through the ‘Trailblazers’ scheme to simplify support for those with long-term health conditions and disabilities is a rollout of an existing scheme. A White Paper intended to remove obstacles to work is mooted for the Autumn. Stephen Timms, Minister for Social Security and Disability, has said that the government will not respond to the previous government’s consultation on Personal Independence Payment but instead they will publish their plans in ‘due course’.

The scale of the benefits challenge has been widely recognised over recent years. Keir Starmer said the Budget would tackle the ‘root cause of inactivity’. Sadly, the Covid pandemic erased the progress made on inactivity and Labour inherited the problem. We currently have over 1.8 million inactive people. The Office for National Statistics confirms that younger age groups have seen the largest relative growth in inactivity between 2019 and 2022, economic inactivity due to long-term sickness swelled by 29 per cent among 16–24-year-olds, and 42 per cent among 25–34-year-olds and mental health challenges remain an increasingly large cohort of this rise.

At an individual level, the life chances of a large proportion of a whole generation are being arrested, while at a societal level it hampers economic growth. Nearly £70 billion is now spent on benefits for those of working age with a disability or a health condition: more than the spending on our core schools budget; more than our transport, public order and safety budgets.

The forecast rise in Personal Independence Payment is startling, with demand set to escalate by over 50 per cent and the cost rising to over £32 billion over the next four years. The Office for Budget Responsibility suggested in March that we will spend £90.9 billion by 2028/29 on health and disability benefits. That is around £1,300 for every person in the UK per year in 2029. Without some way of tackling this issue, an insurmountable challenge is posed to the country’s public finances and hope for growth. Labour’s desire to reform the Work Capacity Assessment should be welcomed. However, the challenge cannot and should not be framed in simply fiscal terms. A more fundamental approach to our system is needed.

All governments are confronted by unpalatable and politically treacherous choices. And none more so than when confronting the issue of ill-health and disability benefits. Discussion often morphs into an unhelpful debate around ‘strivers’ vs ‘takers’. The tightrope is narrow. Given the variability of disabilities and long-term health conditions, there are often very emotive cases that are difficult to account for when designing a broader policy. These realities make reforming health and disability benefits a task that is often put in the ‘too hard’ bracket. Rishi Sunak, in his response to the Budget, pointed out that if we could get working-age welfare spending for people with a disability or health condition back to pre-covid levels it would save £30 billion. But how to do that?

To ‘fix the foundations’ we need a new social contract in our health and disability benefit system. A contract which claimants subscribe to. One that resists categories of incapacity replacing them with means of opportunity. One that more accurately reflects how we live today. We work from home; we provide services and solve problems remotely. Our understanding and the nature of disabilities and ill-health conditions has fundamentally altered since the Work Capacity Assessment was last changed in 2011 and since the introduction of Personal Independence Payment in 2013. Over those years the gateways to those benefits have shifted and the policy intent is misaligned with the challenges that society faces. The challenge not only needs to be tackled but the opportunities of assistive tech and flexible working need to be embraced.

Twenty years ago, assistive technology was scarce and cost prohibitive. There are now a plethora of aids and apps that can help disabled people surmount their impairment. There has been a transformation in the perception of flexible working. This presents opportunities that were simply not available five years ago. We need to undertake a re-evaluation of how best to support disabled people and those with long-term health conditions.

This shake-up is not about targeting or punishing anyone, but rather creating a system that is more dynamic and tailored to specific needs. Disabled people, today more than ever, can be equipped to contribute to not only their own wealth and well-being but also to the nation’s.

For too long, disabled people have been infantilised, seen only as a cost centre. In fact, they can be a powerful resource. A new social contract moves away from the paternalism, or perhaps after this budget I should say maternalism of the state, and asks society to see their economic potential. Labour’s Budget is a missed opportunity to solve Britain’s benefits problem.