Andy Burnham is about to become Prime Minister, inheriting a government with no fiscal room and a welfare bill spiraling out of control. One in four people aged 16 to 64 now identify as disabled, and one in ten receives government disability payments, driven largely by mental health conditions like anxiety, depression, and autism. The trend, which began during the Covid pandemic, shows no signs of abating, and the country can no longer afford it.
The Soaring Cost of Disability Benefits
Personal Independence Payments (PIP), a non-means-tested benefit for disabled people, have seen explosive growth. In 2019, 2 million people received PIP; by April 2026, the number had doubled to 4 million. The increase is currently 300,000 per year. Four in ten new claimants have a psychiatric disorder, including anxiety, depression, or autism. Although PIP is not an unemployment benefit, fewer than one in five recipients are employed.
Former Work and Pensions Secretary Liz Kendall warned in 2025 that the cost of sickness and disability benefits for working-age people had risen by £20 billion since the pandemic and would reach £70 billion annually by the next general election. For context, the UK spends around £95 billion on education and £39 billion on defence. Kendall proposed making it harder to claim benefits, but admitted the plan would only slow the rise, not reduce it.
Labour Backbench Rebellion
Kendall's proposals faced fierce opposition from Labour backbenchers. Diane Abbott called the policy “catastrophic,” Richard Burgon labelled it “immoral and appalling,” and Rachel Maskell warned: “I fear people will take their lives, crushed by a system that fails to believe.” The government backed down and commissioned a review by Work and Pensions Minister Stephen Timms. His interim findings were published in July 2026, with the final report due in autumn—now Andy Burnham's problem.
Pat McFadden, the current Work and Pensions Secretary, said: “The proportion of young people being signed off sick is a major cause for concern. It's not just about numbers but about benefit stickiness—the time people spend on benefits once on them.”
The NEET Crisis and Benefit Dependency
There are currently 1 million young people aged 16 to 24 not in employment, education, or training (NEETs). A report by former minister Alan Milburn in May 2026 warned that a broken benefits system contributes to this. He stated: “Today around seven in 10 young people claiming a health and disability benefit are still claiming a decade later. The damage done to their life chances is almost incalculable.” Milburn argues that reforming the benefits system is essential to save them from a lifetime of misery, alongside changes to schools and skills training.
Burnham's Fiscal Challenge
Andy Burnham also faces other spending pressures. He has committed to increasing defence spending by £15 billion over four years, but only £10 billion is accounted for. He has promised to spread economic growth to regions outside London, and the government is struggling with the rising cost of social care and special needs education. The UK's national debt is so high that the Treasury spends £110 billion annually on interest payments alone. Tax revenue has reached 40% of GDP, a level last seen in the 1980s, leaving little room for further tax increases.
Ending the inexorable rise in the benefits budget must be part of the solution. But the question remains: does Andy Burnham have the guts to take on his own MPs and reform the system? And if he does, can he win the fight?
