Are there really 6.4m on out-of-work benefits?

How to find a scandal hiding in plain sight

How can one in five working-age residents of our great cities be on benefits at a time of mass migration and 800,000-odd vacancies? It’s perhaps the most important question in politics right now - and one not being given any scrutiny because the real figures lie behind a fog of data. The good news is that it’s easy to see through the fog, if you know where to look. I’d like to show you how.

First, let’s look at the full, grim figure of every working-age person on out-of-work benefit (as defined by the DWP): unemployment, sickness and all else. A national scandal. With 2,000 being signed on to sickness benefit every working day, the forecast is for this to get a lot worse. This is a fire burning - and intensifying - in our most vulnerable societies.

So why isn’t it mentioned? It’s about how economics and journalism work. Metrics designed for the old era (a binary divide of employed vs jobseekers) are still being used, which has the effect of airbrushing out from public discussion the millions of people trapped in between.

Every month, the official unemployment figure is put out on a press release – and journalists stand ready to cover it. Unemployment latest: just 4.4%! Once, ‘unemployment’ meant just that. Now, claimants (ie, those actively seeking work) don’t cover even a quarter of those on out-of-work benefits.

Just look at the deceptive snapshot from the ONS unemployment page: nowhere do you see 6.4m.

The real benefits figure cannot be found on any official website. It needs to be excavated from a password-protected DWP database, and even then the data has a six-month time lag and is only updated quarterly. I first came across the figure when the database was digitised about 20 years ago: then it was 5.3m. Now, it’s 6.4m: an all-time high.

So how robust is the 6.4m figure? It was scrutinised on BBC Radio 4’s More or Less (episode here) and not faulted. I mentioned it in a podcast and was contacted by Full Fact, an independent watchdog who do a great job calling out people like me when we get figures wrong. I can see why they’d think it wasn't credible. If there were really six million on the dole – in the middle of an acute worker shortage – then surely the newspapers would be quoting this figure all the time? Didn’t the UK press go bananas when unemployment passed three million under Thatcher? So how could it be six million, without similar hype?

I still can’t work out why there’s so little outrage. Any teenager could find the DWP data: now on Stat-Xplore, a versatile open data tool. The password request is new - and deceptive. Anyone can bypass it by clicking ‘Guest log in’ and then you’re in an Aladdin’s Cave of welfare data. Scandal after scandal.

Look up the dataset ‘Benefit Combinations – Data from May 2019 for England and Wales'. Click Table 5, then click ‘Open table’ to get the numbers. A wheel appears while it computes, then the following table is revealed for ‘out of work’ benefit combinations:

Add the figures in the right-hand column (excluding the ‘Not on Out of Work Benefits’ row) and you get 5.7 million. Do the same with the Scotland dataset, and you can then reproduce the GB total of 6.4 million.

Importantly, there is no overlap: people do claim more than one benefit, but each person is counted only once and placed in the category of the highest amount they receive. And yes, UC is paid to people in work. But this explicitly counts those defined as ‘out of work’.

• ‘INCAP’ is Incapacity Benefit (or Employment Support Allowance – ESA – as it’s now known): figures are dropping because most new sickness benefit claims fall under the…

• ‘UC’: Universal Credit. There are many forms of this, but the DWP database strips out welfare payments with ‘no work requirements’.

• IS is Income Support, which is being phased out.

• JSA is the old Jobseeker’s Allowance, now mostly replaced by the out-of-work part of UC.

In producing my 6.4m figure I am following DWP methodology which they deploy from time to time. Here’s am example: from Feb24.

The DWP has postcodes of all claimants plugged into the system, so its database can give the breakdown to a very granular level. You can combine local claimant count with ONS estimates of working-age population (which you can get separately here) and you get the following picture (for example) for cities:-

I find the above figures staggering and sickening. A quarter of Birmingham, our country’s second city, on out-of-work benefits? That’s where unemployment peaked in 1933 - and we called that a Great Depression! And Manchester? It's booming, employers desperate for staff: yet one in five on the dole? And still sucking in migrants? What kind of economic model is this? And when did we stop caring - or counting?

We have had worker shortage crises before. We have had mass unemployment before. But never have we combined the two. It takes some doing - and several tens of billions of pounds - to distort an economic model in this way. Yet that’s what we have done.

The anti-poverty think tanks not helped by judging fairness simply in terms of distribution of money, as opposed to work or opportunity. If you judge society by ‘decile distribution’ , then whatever maxes out payments to those at the bottom is “fairest”: in work or not. There’s a small industry of charities all helping to shovel millions into a land of economic and social isolation, with all of the accompanying problems. No one seems to care about their prospects once they get to the other side.

The DWP website lets you study the damage on a neighbourhood level, right down to so-called Middle- and Lower-Layer Super Output Areas (over 8,000 MSOAs and 42,000-odd LSOAs). The ONS also provides working-age population estimates. Marry the two up and here’s what it looks like for the latest available data: Q3 of 2024.

Ideally, an important study like the above would be done not by a newspaper columnist but by a government department, parliament (any MP can query the HoC library and publish the results) or a think tank like the IFS. The OBR has done great work, see here, but only occasionally. Ideally, the update - released quarterly - would be on the BBC news, just as the monthly unemployment figure is.

But then again, our ‘national’ discussion isn’t a national one. Not anymore. We have slowly been coming apart as a country. The system of effort-and-reward is a luxury, granted to those in work. It could work a lot better than it does, but at least it works

The 3.5m on sickness benefit are in another system: kept aside from the rest of society, stuck in a Kafkaesque world of LCWRA claims forms and PIP points. They see no point to school, let alone work. The jobs available to them are tough, insecure and pay less than welfare. We have stopped counting the numbers of the other nation. We airbrush them out of the economic conversation and look to immigration to fill the jobs they once held. We tell ourselves about the jobs that “Brits don’t want to do”, but never count how many are being paid not to take these jobs; not to join our economic system. To stay in edge-of-town housing estates and keep quiet, unless arrested for rioting.

If officials are in no rush to publish embarrassing data, journalism can play a role in doing so. I’ve long believed that journalism also means doing your own sums and hunting down your own metrics if no one else will.

In recent weeks I’ve been traveling to such areas to speak to those affected and those helping them. Socially, it’s been like welfare-Narnia: you go from one world into another, with the two worlds unaware and even uninterested in each other.

I’m grateful to sceptics and critics for attention: robust debate is the only way to arrive at truth and the subject matter could not be more important. In summary, here is my response to the most frequent questions and critiques.

• I am using DWP language and methods: not my own. The DWP's definition of "out-of-work benefit", adding up categories and simply repeat the official wording. The OBR uses this method here (Chart E).

• The sharp rise in UC (Workless). I’m repeating the official figures from the DWP. Its data may be corrupt, or its categories misleading. But I make no judgement about that, and repeat the official data with the official words.

• No double-counting. The DWP say the figures do not double count. People are placed in the bracket of their highest welfare claim.

• Yes, the figures include the terminally ill and those who cannot be expected to work. This critique is the main reason that this figure is not examined. In any society there will be some people who for various reasons are unable to work - but probably not 15 per cent of the potential workforce.

• If this six-million figure was real, why is no one else talking about it? Economists tend to focus on those actively looking for work, Tories have no incentive to highlight recent welfare failures and Labour dislikes the topic in general. Journalism has a bias towards readily-available and frequently-updated statistics - and these are buried deep in a DWP database. In my view, this is a corruption of economics: the binary ‘available for work’ and ‘not’ divide was once relevant but now serves to cover up the untapped human potential.

• The main vulnerability to my figures is that I’m relying on DWP data and definitions. My numbers will never be better or more reliable than theirs.

I'd be grateful to any readers for thoughts, especially challenges to how I am seeing this. I’ve described my methodology here: if there is any slight error or overstatement I’d love to hear it. As I explain here, were it not for a couple of twists of fate, I'd have spent my life as one of these statistics..

I'd like to use what influence I have to keep digging, and keep the conversation going. There is, still, all too much to say.

PS You can also query the database to produce a map: below.