The health benefits system has been described as “financially unsustainable” as a Lords committee called on ministers to reform the system.
The chairman of the cross-party Economic Affairs Committee has written to Work and Pensions Secretary Liz Kendall warning that “urgent action is needed to address the rising social and financial cost”.
Lord Bridges of Headley also said that “tackling” the issue “must be a top priority for the Government”.
Last year Ms Kendall said that people who “can work, must work” when she announced a “get Britain working again” plan aimed at returning some of the 2.8 million people out of work due to long-term sickness to the workplace.
After a short inquiry into why spending on incapacity and disability benefits has increased since 2013, in the letter to Ms Kendall, Lord Bridges said the committee received “no convincing evidence” that an increase in health benefits is down to “deteriorating health or high NHS waiting lists”.
“The danger is that people have incentives to claim health-related benefits; and, once in receipt of them, have neither the incentive nor support to find and accept a job,” he added.
Lord Bridges urged the Government to “accelerate its plans to reform health-related benefits” and warned that if it does not set out a plan to tackle the issue “this growing area of welfare spending will remain a challenge for the forthcoming Spending Review”.
Long-term sickness has been a major driver in joblessness since the pandemic, having risen from approximately two million in 2019.
Lord Bridges said in a statement: “The health benefits system is financially unsustainable, wastes human potential and – in the words of the Employment Minister – ‘does not work for anybody’. Given the pressure on the nation’s finances, tackling this must be a top priority for the Government.
“Urgent action is needed to reform both the unemployment and health-related benefits system, and how they interact.
“There should be more support to help those who are able to find and accept work – and to ensure that those who cannot work for a period are not abandoned to a life on benefits.
“Without a clear plan of action, growing welfare spending will remain a significant challenge for the forthcoming Spending Review.”
A Government spokesperson said: “We are determined to get Britain working again and have set out our first steps towards delivering an 80% employment rate – by joining up local work, health and skills plans.
“We have been clear that the current welfare system needs reform, so it is fairer on the taxpayer and people get the support they need to move into work.
“Building on our Get Britain Working White Paper, we will bring forward proposals for reforming the health and disability benefits system in the spring.
“This will be part of a proper plan to help disabled people who can work secure employment while ensuring support is provided for those who need it.”
