1st November 2026
Many of you will have heard politicians recently saying the welfare spending, social payemnts etc are out of control but it is complicated topic and easy to create confusion so we decided to look closer. Starting from an article by Richard Murphy we take a closer look.
Whenever the Government discusses public spending, one figure is increasingly likely to appear in the debate: the rising cost of welfare.
The argument is familiar. Benefit expenditure is increasing, public finances are under pressure and difficult decisions have to be made. The implication is that welfare spending is becoming unaffordable and that something must be done to bring it under control.
But there is a question that deserves rather more attention: does a rising welfare bill actually tell us that the country is spending too much, or does it tell us that more people need support?
The distinction matters. Much of the money involved goes to pensioners, disabled people, people who are ill, unemployed households and families on low incomes. These are not necessarily groups with much financial room to absorb reductions in support.
A recent analysis by economist Richard Murphy, using historical benefit expenditure figures, challenges the suggestion that social security spending is running out of control. His calculations cover Great Britain from the beginning of the post-war welfare state in 1948–49 to government forecasts for 2030–31.
He estimates that social security spending in 2024–25 was £305 billion, equivalent to 10.4% of GDP and 23.6% of all government spending. He calculates that the share of GDP was higher in 2012–13, when it reached 12%.
His argument is that looking only at the cash total gives a misleading impression. A pound spent today is not worth what it was ten, twenty or fifty years ago. The population has grown, prices have increased and the economy itself is larger. It is therefore necessary to consider spending in relation to national income and the overall public spending budget.
That is a reasonable point. A headline saying that welfare spending has reached a record number of pounds does not, by itself, establish that the system is out of control.
The bill is rising, but why?
There is no suggestion that the welfare bill is about to fall. The Office for Budget Responsibility's October 2026 forecast puts UK welfare spending at £352.7 billion in 2026–27, rising to £431.3 billion by 2031–32.
Those are very large sums, and the public finances cannot simply ignore them. But the OBR identifies important reasons for the increase, including pensioner spending and the growing number of people receiving health-related benefits.
The number of people receiving incapacity-related support has increased substantially since before the pandemic. The OBR also warns that the future cost is uncertain: if recent growth in health-related benefit caseloads continues, spending could be considerably higher than its central forecast.
That raises questions about health, disability, the labour market, long-term sickness and the availability of suitable work. Simply describing the resulting expenditure as a welfare problem does not explain why more people need help.
It is also worth remembering that the OBR's figures are UK-wide, while Murphy's historical analysis uses Great Britain spending. They are different statistical series and should not be compared as though they were identical.
Not all welfare spending is the same
The term welfare is often used as if it describes one group of people receiving one type of payment. It does not.
The total includes the State Pension, Pension Credit, disability benefits, support for carers, housing assistance, unemployment benefits and help for families with children. It also includes support for people in low-paid employment.
Murphy's analysis attempts to divide this expenditure into six groups and examine how each has changed over time. He argues that pensions now account for a much larger share of the total, while support for unemployed people, children and low-paid families has fallen as a proportion of GDP.
His precise breakdown depends on how different benefits are grouped, particularly where schemes have been replaced by Universal Credit. It is an analytical reconstruction rather than an official government classification. That is an important qualification, but it does not make the exercise pointless.
It highlights something that is often missing from political debate. When politicians talk about cutting welfare expenditure, which payments are they actually proposing to reduce?
A reduction in pension spending would affect a very different group from a reduction in support for unemployed people or families struggling with housing costs. The overall figure conceals those differences.
The people behind the figures
There is a danger that the debate becomes so focused on the total cost that the circumstances of the people receiving support disappear.
For a pensioner living on a modest income, the State Pension is not an optional extra. For someone with a disability, a benefit payment may help meet additional costs that other households do not face. For a family on a low wage, help with rent or childcare can make the difference between managing and falling into debt.
That does not mean every benefit decision is necessarily right, or that the system cannot be improved. Fraud should be addressed, errors corrected and public money properly accounted for. But those issues should not be confused with the legitimate needs of people entitled to support.
There is also a wider question about the relationship between low wages, housing costs and benefits. If someone works but still needs help to pay the rent and meet basic household expenses, it is not enough to look at the benefit payment without examining the wider circumstances.
The housing element of Universal Credit and Housing Benefit help tenants meet their housing costs. Landlords may benefit from receiving rent, but the payments are intended to support tenants. The longer-term debate should also consider housing supply, rents and the availability of genuinely affordable homes.
A separate crisis in care
One of the most important points raised by Murphy is that a large social security budget can exist alongside a shortage of care and support.
However, social security and social care are not the same thing. Benefits are payments to individuals and households. Social care involves services such as help at home, residential care and assistance with everyday activities.
There is evidence of unmet need in Scotland. Public Health Scotland reported that, in September 2026, people assessed as needing care at home but still waiting for a package required an estimated 39,291 hours of care each week. That was almost 40% higher than a year earlier.
The Scottish Government also estimates that around 722,000 people provide unpaid care in Scotland. Its latest survey found that 15% of carers said they had received no support despite feeling that they needed it.
These figures point to a problem that cannot be understood simply by looking at the national welfare bill. People may receive a benefit but still struggle to obtain the practical help they need. Families may be left providing hours of unpaid care because formal services are unavailable.
It is possible, therefore, for welfare spending to rise while significant needs remain unmet.
What should politicians be telling us?
There are genuine pressures on public finances. An ageing population, rising health-related benefit claims, pension commitments and the cost of providing public services all require decisions about taxation and spending.
But the public deserves more than a headline about the growing cost of welfare.
Politicians should explain how much of the increase is due to inflation, how much reflects population changes, how much is linked to higher numbers of people claiming particular benefits and how much results from changes in policy.
They should also explain which groups would be affected by proposed savings. A statement that billions must be found tells us very little about the consequences for a pensioner, a disabled person, an unemployed worker or a family already struggling to balance its household budget.
Richard Murphy's historical analysis provides a useful challenge to the assumption that a rising cash total automatically means welfare spending is out of control. His more political conclusions about the motives of politicians are a matter of interpretation, rather than something that the figures alone can prove.
But the question he raises deserves to be taken seriously.
There is a difference between asking whether public money is being spent effectively and treating the people who depend on support as though they are the problem.
The welfare bill is rising. The reasons need to be examined carefully. And before politicians demand further reductions, they should explain not just how much they expect to save, but who will pay the price.
A country's financial position matters. So does the way it treats people who have the least ability to protect themselves from rising costs. The debate should be about both.
When we hear politcians speaking about growing cost of welfare we need to examine carefully exactly what they are referring to.