Treasury will back benefit pay revolution

Marion Dakers
THE GOVERNMENT has reached a truce over the welfare system, which will see most benefits scrapped and replaced with a single payment, the Times reports this morning.

The work and pensions secretary Iain Duncan Smith has persuaded the Treasury that the overhaul would be affordable, the report claimed.

Duncan Smith and the Treasury have spent the summer trying to hammer out a way to reduce the bill for the welfare system.

Duncan Smith said in July that a “universal credit” encompassing housing benefit, jobseekers’ allowance and income support would simplify the benefits system and help guarantee that those in work would be better off.

However, the Treasury has pushed on the minister to find around £5 of savings for every £1 the department spends on changing the system, constraining plans for wide-ranging reform.

The current blueprint will allow Duncan Smith to declare billions of pounds in cuts up front, by counting the savings expected in the new system such as a drop in fraud, the Times said.

An announcement on the transformation is expected at the Tory conference next week, while details of the £83bn of public sector cuts planned by the coalition will be published as part of chancellor George Osborne’s spending review on 20 October.

A spokesperson for the Treasury declined to comment on the story last night.

● Chancellor George Osborne will spell out plans to slash £83bn from the public sector budget in a spending review on 20 October

● The coalition has already cut £6.2bn after delaying contracts and reducing other costs