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Welfare costs risk making Northern Ireland as bankrupt as Greece

By Adrian Rutherford

Published 21/07/2015

The Executive has been urged to rein in Northern Ireland's ballooning benefits bill amid claims that spending is out of control
The Executive has been urged to rein in Northern Ireland's ballooning benefits bill amid claims that spending is out of control
The trend over recent years has been one of spiralling costs - Samuel Gardiner
Here, we have a society which has learned that it pays not to work - David McNarry
A lot of money in the system is going to people who are in work - Bumper Graham

The Executive has been urged to rein in Northern Ireland's ballooning benefits bill amid claims that spending is out of control.

Almost £5.6bn was poured into welfare in the last 12 months - up 15% on five years ago.

It has led to warnings that Northern Ireland could face a Greek-style debt crisis if expenditure is allowed to continue to spiral.

At the current rate of spending our welfare bill will hit £6.4bn by the end of the decade.

Our current £5.6bn bill includes:

  • £971m spent on Disability Living Allowance, which has surged by more than 22% in five years;
  • £179m on Jobseeker's Allowance - broadly unchanged from 2010 despite the number of people in work rising significantly;
  • £655m on housing benefit - a rise of 17% in the last five years;
  • And £734m on employment and support allowance, which has jumped by 39% in the last year.

In total, £5.583bn was spent on welfare in Northern Ireland during 2014/15, including £2bn on the retirement pension.

That total has risen by 15% since 2010/11, when expenditure added up to £4.851bn.

The figures were obtained by Ulster Unionist MLA Samuel Gardiner. He warned that the current rate of spending was not sustainable.

"I am quite alarmed at the rate at which our annual welfare bill is growing," Mr Gardiner said.

"We have a social security system that is coveted by many other nations of the world.

"It is an essential safety net that protects the sick, the disabled and those out of work.

"At the same time, we must ensure that it remains affordable.

"Worryingly, however, the trend over recent years has been one of spiralling costs."

Mr Gardiner said too many people were being trapped into welfare dependency.

Northern Ireland has still to implement reforms to the benefits system introduced elsewhere in the UK.

Welfare reform had been part of the Stormont House Agreement in December.

However, Sinn Fein withdrew its support for the bill in March, citing concerns over protection for benefits claimants.

Mr Gardiner said a new approach was needed to ensure a welfare system that was affordable and sustainable for future generations.

The figures show how spending on welfare is increasing year on year.

If the trend continues at the same pace, welfare spending will hit £5.752bn this year.

By 2019 it will have rocketed to £6.427bn.

Measures announced in this month's budget should slow the spending.

Chancellor George Osborne announced a freeze in working age benefits for four years, including tax credits, although DLA and ESA - two of the main drivers of the Northern Ireland welfare bill - won't be affected.

Ukip MLA David McNarry blamed migrants, a work-shy generation and fraudsters for our spiralling welfare bill.

"The growing migrant community in Northern Ireland has been milking the benefits system," he said.

"We also have a society which has learned that it pays not to work."

Mr McNarry added: "Unless we really are a sick nation, and something is terribly wrong, then too many people are fleecing the system."

He said spending on benefits had been spiralling for a decade and was now out of control.

Writing in today's Belfast Telegraph, political commentator David Vance accused the Assembly of allowing a system where work does not pay.

He warned we are heading for a Greek-style crisis.

"Relentless growth of DLA and ESA benefit shows that politicians are content to allow a section of society to feed off our taxes," Mr Vance writes.

"Is this fair to the people who do go out to work and who strive to take care of their families?

"Denying financial reality and refusing to live within budgets will not create a paradise, instead it makes Northern Ireland more akin to Greece - the new bankrupt Athens of the North."

Bumper Graham from the Nipsa union cautioned against comparing Northern Ireland's spiralling welfare spending with other parts of the UK.

"The mental health issues in Northern Ireland are considerably greater than elsewhere," he said.

"That is a legacy of the Troubles, so you would expect to see more people claiming disability benefits as a consequence."

Mr Graham added: "A lot of money in the benefits system goes to people who are in work and receiving tax credits.

"That is helping to subsidise employers who continue to pay low wages, knowing that the state will bail them out.

"Secondly, Northern Ireland has a much younger population and more young people per head of capita than other parts of the UK.

"Therefore, there will be additional welfare costs as a result of that."

A spokesperson for the Department for Social Development said: "The Minister remains committed to progressing welfare reform changes which are aimed at ensuring that the social security system remains fair, sustainable and affordable."

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