The thorny question of welfare reform

Frank Field may 'think the unthinkable' - but he's keeping it to himself.

One third of all UK Government spending goes on the welfare system - nearly £100bn.

The Minister of State for Welfare Reform, Frank Field, has been charged with finding a way to manipulate that welfare bill. His Welfare Reform Green Paper will unveil the government's proposals on Thursday.

But why is welfare reform such a thorny issue?

Spending on social security has increased by £43bn in real terms since 1979 and since the mid-1980s politicians have complained that welfare costs have spiralled.

The unemployed take 9% of social security

In 1979 a total of £16.6bn was spent in total on social security - that's worth £52bn in today's prices. This year, the government expects to pay £99.3bn on social security.

But politicians complain mainly because they want to use the money elsewhere. The reality of the welfare bill is that social security spending as a percentage of national income has actually been falling since 1993 and is predicted to continue to fall into the next century.

Spending on social security peaked in 1993/94 when it was 13.6% of national income - today it is 12.4% and expected to be 12.1% by the year 2000.

So although the government is spending more in real terms on social security, it can afford to do so because the UK's overall national income is growing faster than the increase in spending on social security.

Single parents say they're under pressure to work

Nearly half of social security spending goes on pensions - and, with an ageing population, that bill is not going to decrease. Only 9% of social security benefits go to Britain's unemployed.

So the question for the government - and for Frank Field in particular - is how to get more for the taxpayer's money.

The controversial nature of the issue is why Frank Field was brought in by Mr Blair when Labour came to power. Mr Field's brief was to "think the unthinkable" - to find radical ways to manage the welfare budget.

The government has discovered that welfare issues have to be handled carefully. More recently Mr Field has foregone his "thinking the unthinkable" catchphrase for a more modest management of expectations.

Disabled protesters make their views known in Westminster

He and the government both know that it is politically difficult to change the welfare state because there are so many interested groups. Social Security Secretary Harriet Harman's political career has been scarred by the announcement that the government is to reduce social security benefits for single parents.

The government is considering the level of all benefits and disabled groups have already protested about government proposals to changed disability allowance.

But equally there is not much room to manoeuvre in the social security budget.

So the government has to encourage the unemployed into work whilst discouraging people from drawing benefits.