Labour admits £41bn disability benefits system is "not fit for purpose"

Labour today admitted Britain’s ballooning disability benefits system is “not fit for purpose” – but insisted the soaring £41billion bill is “not a great concern”.

A government review found the Personal Independence Payment (PIP) system is failing claimants and losing public trust – yet stopped short of recommending a single penny of savings.

Disability Minister Sir Stephen Timms said the benefit was no longer working “as intended” but added that the current level of spending did not worry him.

He told the BBC: “My view is the current level of spending is not a great concern.

“What would be a concern would be if it carried on going up ever and forevermore.

“That we have to address, and we will be doing so.”

The review was commissioned after Labour’s humiliating climbdown over plans to save £5billion from the welfare bill.

Sir Stephen was repeatedly pressed on the BBC over whether his review would produce any savings.

He replied: “The terms of reference don’t require us to make savings.”

The number of people claiming PIP has surged in recent years, with around four million now entitled to the benefit in England and Wales.

Government forecasts show annual spending is expected to climb from around £26billion to almost £41billion by the end of the decade.

Shadow Work and Pensions Secretary Helen Whately said Labour was refusing to face reality.

She said: “The problem is that the government is in denial about the seriousness of the situation with our welfare system and the fact that we have to make savings.

“We cannot keep on spending money at the rate we’re spending it.

“The cost of working age benefits is due to go up… but the Timms review, which we’ve got the interim report out from today, is set to make no savings.”

Asked whether the review would ultimately recommend reducing claimant numbers or cutting spending, Sir Stephen declined to say.

Review co-chair Sharon Brennan also refused to commit to reducing the overall bill.

She said the priority was ensuring “the right people” receive support rather than targeting a predetermined financial outcome.

The interim review recommends a major overhaul of the assessment process after finding disabled people described it as “dehumanising”, “demeaning” and a barrier to work.

Its final recommendations are due in the autumn, by which time Andy Burnham is widely expected to have taken over as Prime Minister.

Sir Stephen said he expected the review to continue under a Burnham government.