Can Reform fix the welfare state?

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Depending on who you ask, the welfare state is either the only thing left in Britain worth fighting for or a byword for state failure, waste and deceit. A cursory look at the statistics will leave readers under no illusion as to which is the correct interpretation.

In the 2025/26 financial year, we are projected to spend almost £335 billion on social security and welfare benefits – roughly 10.6% of GDP. As of 2026, over 4 million adults in England and Wales claim personal independence payments (PIP), £37.3bn is spent annually on social housing, and according to the Office for National Statistics, over half the population of the UK (53.3%) are net recipients of the state, rather than net contributors.

With the tax burden at a near all-time high and our national debt rocketing towards £3 trillion, this is patently unsustainable. 

According to Robert Jenrick, Reform UK has a plan. Over the weekend, the party’s economics spokesman announced a series of measures which he claims will slash £50bn a year from the welfare bill.

One of the pledges which has generated the most traction is the plan to largely disqualify non-UK citizens from claiming working-age benefits. Politically, this is in line with the mood of many across the country. Over half of Britons believe that the primary negative impact of mass immigration is the strain on the welfare state caused by migrants claiming benefits for themselves and their families. Over 1.3m foreign nationals are now on Universal Credit, up from around 900,000 in 2022. Department for Work and Pensions data shows the share of Universal Credit paid to foreign nationals was 15.5% in January 2026.

According to Reform’s policy document, this will save British taxpayers £21bn a year by 2029/30, of which £13bn will come from restricting access to Universal Credit. However, the Tories have taken issue with Reform’s calculations, with Mel Stride describing Jenrick’s plan as founded on ‘fantasy economics’. The Liberal Democrats, predictably, dismissed the plan as ‘senseless and cruel’.

Another central element of Reform’s plans is to overhaul disability benefits by replacing PIP with a tougher assessment system, while ensuring those genuinely in need are covered by introducing a Health Security Allowance. 

The scale of the current problem is staggering. Last year, 6.9m people received disability benefits in Britain – an increase of 2.5m on 20 years ago. Each month, more than 20,000 new claimants are granted PIP, and they’re not getting off it. Of all PIP recipients in 2017, two thirds were still claiming five years later. According to Reform’s policy document, health and disability benefit spending is forecast to reach £110bn a year – £3,600 per family – by 2031.

We at the Prosperity Institute have been consistent in our criticism of PIP, and our economist Emmanuel Igwe wrote this in response to the Timms Review into disability benefits earlier this year:

If we abolished PIP, we could eliminate the parallel structure PIP creates as well as the perverse incentives embedded within it. Doubtless, the transition process would be tough – as the move from DLA to PIP has shown – but it remains the only option that deals with the underlying issues present within PIP, rather than its surface problems.

As with any large attempt at welfare reform, the political risk is substantial. Writing about Reform’s plan, Fraser Nelson questioned Jenrick’s seriousness, describing the proposals as ‘stretching credulity’. The former Spectator editor and long-time advocate of welfare reform took issue with scrapping PIP on the basis that it could alienate Reform voters. As Nelson points out, ‘almost all of Reform’s target seats are heavily welfare dependent’. In Jenrick’s seat alone – Newark – his majority of 3,571 is smaller than the number of PIP claimants, 6,011.

While Reform’s plan is by no means perfect – Jenrick’s carve-out to protect the triple lock on pensions is pork barrel politics, and if welfare reform is not matched by labour market policies that make it easier for businesses to take on new workers, it will remain hard to get people back into employment – many are missing the point.

Britain’s welfare crisis strikes at the heart of what it means to be a functional, prosperous nation. It speaks to the values we want to encourage in our citizens. For far too long, we have incentivised profligacy over pragmatism, dependence over dignity and reliance over responsibility. All of which has come at a tremendous economic and social cost. Tackling such deep-rooted problems is never politically easy, and as Nelson wrote, requires facing down voters who benefit from the status quo – something which Labour, even with their record-breaking majority, failed to do. 

No, the document may not have been flawless, but with only eight Members of Parliament and an election to fight, Reform deserve applause for this ambitious, risky proposal.

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