Welfare bill to cost extra £1.4bn
Welfare benefits are set to cost about £1.4 billion more than previously expected over the next four years because of rising unemployment, according to the Government's independent financial watchdog.
The unemployment benefit bill is to be £700 million higher than thought, while the cost of housing assistance will also grow by £700 million because of larger numbers of people claiming jobseeker's allowance or falling into lower wage brackets, the Office for Budget Responsibility (OBR) found.
Its analysis is based on the revised unemployment estimate after the June budget, when it changed its forecast from 6.3% to 6.5% for 2014.
Since then the forecast has been revised upwards again, to 6.7%, but no costing has been carried out for that figure yet.
Shadow work and pensions secretary Douglas Alexander said the OBR analysis demonstrated the risk the Government was taking with the economy and its package of cuts.
"The growing cost of the risk the Government is running with the economic recovery is now emerging. The result of policies which undermine growth and jobs is a longer dole queue and a higher welfare bill," he told The Guardian.