The Government’s welfare cap is on track to deliver £21bn savings through changes to benefit payments and reforms to eligibility, the chancellor confirmed today.
In his Budget speech, chancellor George Osborne said the Government had legislated for £21bn welfare savings by pegging the limit on total spending on benefits – with the exception of pensions and automatic stabilisers which kick in during times of economic downturn.
He also confirmed that welfare reductions would make up £12bn of the £30bn fiscal tightening measures needed by 2017/18 – with £13bn government department reductions and a £5bn tax avoidance clampdown making up the remainder.
The full Budget document revealed independent government forecasters the Office for Budget Responsibility predict spending within the welfare cap could average £2bn lower than predicted at the time of last December’s Autumn Statement - and some £9.7bn lower over the forecast period.
But OBR forecasters also believe a number of other factors will continue to put upward pressure on the welfare budget.
Last December the OBR judged the welfare cap was met, but will next monitor progress this autumn, when the cap will cover from 2016/17 onwards.
