Former Institute for Fiscal Studies director Paul Johnson has called on the government to address the rapid increase in spending on personal independence payments (PIP) and other disability benefits, describing the current growth as “extraordinary.” Speaking ahead of Chancellor John Healey’s first Budget, scheduled for October 28, Johnson urged policymakers to consider tightening eligibility criteria for PIP as part of broader efforts to contain benefit costs.

Johnson, who led the IFS from 2011 to 2025 and now serves as Provost of Queen’s College, Oxford, highlighted the challenges facing the government amid rising borrowing costs and economic uncertainty influenced by geopolitical developments such as the Iran conflict. He warned that these factors could constrain the government’s fiscal flexibility, potentially necessitating either tax increases or spending cuts.

A significant area of concern for Johnson is the sharp rise in health-related welfare claims for working-age individuals. He pointed to data showing that expenditure on sickness and disability benefits has increased from £36 billion in 2020 to £58 billion currently, with projections from the Office for Budget Responsibility forecasting a rise to £78 billion by 2030. The number of PIP claimants in England and Wales has grown from 3.6 million in 2024, when Labour took office, to four million today. In Scotland, the equivalent benefit is administered through the Adult Disability Payment via Social Security Scotland.

Johnson noted a substantial shift in the composition of claimants since the COVID-19 pandemic, with claims related to mental health and neurodevelopmental conditions such as anxiety and ADHD rising from 16.5% in 2020 to 24% this year. He observed that PIP was not originally designed to support such a large number of people with mental health conditions and expressed concern about incentives within the welfare system that may encourage claimants to move onto sickness benefits rather than unemployment support.

“The standard unemployment element of universal credit is very limited and requires active job-seeking, while health-related benefits can offer more financial support and reduce the pressure to work,” Johnson said. He suggested that addressing these incentive structures and providing more support for returning claimants to work could help manage the benefit bill.

The government has been reviewing PIP following internal disagreement within the Labour Party. In 2025, Labour rebels prevented cuts to the benefit, leading Chancellor Healey to commission Sir Stephen Timms to conduct a review. Timms’ interim report, released last month, described the current PIP system as “not fit for purpose” and called for fundamental changes, though it stated that current spending levels were not immediately problematic. Timms cautioned, however, against allowing costs to rise indefinitely.

Johnson expressed hope that the government would pursue policies aligned with the Timms Review’s recommendations, including explicit efforts to reduce spending through measures such as stricter eligibility criteria, differentiated treatment of mental health conditions, and enhanced support for employment. He emphasized that allowing unchecked growth in health-related benefits without a clear plan was not sustainable.