The Treasury manages public spending within two ‘control totals’ of about equal size:
- departmental expenditure limits (DELs) – mostly covering spending on public services, grants and administration (collectively termed ‘resource’ spending) and investment (‘capital’ spending). These are items that can be planned over extended periods.
- annually managed expenditure (AME) – categories of spending less amenable to multi-year planning, such as social security spending and debt interest.
Welfare spending is the biggest source of AME spending. Disability spending (excluding devolved spending) is forecast to account for 11.2 per cent of total welfare spending in 2022-23 (up from 10.6 per cent in 2021-22).
In our November 2022 Economic and fiscal outlook (EFO) we designated welfare spending into broad recipient groups. Forecasts for individual benefits are available in supplementary table 3.7 on our website.
For this summary, disability benefits spending refers to expenditure on disability living allowance (DLA), personal independence payment (PIP) and attendance allowance (AA). These benefits are intended to contribute towards the extra costs associated with disability, based on the extent of the recipient’s disability, whilst employment support allowance and universal credit provide income support for those unable to work for health reasons.
From April 2020 funding for DLA, PIP, and AA has been devolved to the Scottish Government. Spending on these now-devolved benefits is no longer included in the welfare forecast in our EFO but is included in disability spending in the information below for the purposes of consistency with the long-run time series prior to their devolution.
Support was mostly provided to disabled claimants through DLA from 1992 until 2013, when PIP began being introduced for working-age claimants in place of DLA, with different eligibility criteria. AA provides support to pensioners making new claims for support with substantial and regular care, while those reaching pension age who already receive DLA or PIP can continue to do so. DLA and PIP provide financial support to assist with both care (or daily living) and mobility needs, but AA only covers the former.
Disability benefits spending is forecast to be £32.5 billion in Great Britain in 2022-23. We forecast spending to increase to £50.4 billion in 2027-28. That would represent around 4 per cent of total public spending, and 2 per cent of GDP.
Average awards across the different disability benefits varies, with PIP recipients receiving an average of £5,700 each in 2021-22, DLA claimants £4,770 each, and AA claimants £4,090 each.