Welfare spending exceeds tax contributions in three quarters of English and Welsh constituencies, tracker shows
Select a version of the text written from a presumed ideological perspective. This is not the original text, but a hypothetical version — how someone with that viewpoint might have phrased it. Tapping the current version again will return to the original or select cleaned version.
The Adam Smith Institute's Welfare Sustainability Tracker finds that 430 of 575 constituencies in England and Wales receive more in welfare payments than they collect in income tax and National Insurance.
A new analysis by the Adam Smith Institute indicates that across England and Wales, welfare spending totals £61 billion more each year than the revenue generated from income tax and National Insurance, equating to a gap of £1,245 per adult. The institute's Welfare Sustainability Tracker shows that for every £1 collected through these two taxes, £1.27 is spent on welfare.
Out of 575 parliamentary constituencies examined, 430 receive higher welfare payments than the tax contributions of their residents, while the remaining 145 contribute more than they receive. The welfare calculations include state pensions, Pension Credit, Universal Credit, Personal Independence Payments and housing benefits, but exclude other taxes and public service spending such as the NHS and schools.
Regional differences are pronounced. The North East records the highest ratio, with £2.19 of welfare for each £1 of tax collected, and every constituency there is a net welfare recipient. Wales also shows a net receipt, with £1.88 of welfare per £1 of tax, compared with £1.25 in England. London and the South East are the only regions where tax contributions exceed welfare spending; in London, welfare spending is 78 pence per £1 of tax.
Among individual constituencies, Birmingham Perry Barr has the highest ratio in England at £4.41 of welfare per £1 of tax, while Liverpool Walton shows the largest per-adult gap, receiving £6,320 more in welfare than residents pay in tax. Conversely, Chelsea and Fulham residents contribute £12,247 more per adult in tax than they receive in welfare.
The ten constituencies with the highest welfare reliance tend to have younger populations, higher numbers of children, greater disability rates and more social housing. Nearly a quarter of residents in these areas lack formal qualifications, compared with 18 % nationally.
Political representation varies: Reform UK holds the highest proportion of welfare-dependent seats among major parties, with seven of its eight constituencies in the net-recipient group, while the Liberal Democrats have 37 of 65 seats that generate more tax than they receive in welfare. Seven of the ten most welfare-reliant constituencies are represented by Labour MPs.
"A welfare state that spends more than it raises through income tax and National Insurance is one that increasingly relies on other taxes and borrowing to stay afloat," said Viggo Terling, chief of staff at the Adam Smith Institute.
"Our Tracker exposes the scale of this imbalance. With only London and the South East contributing more through these taxes than they receive in welfare spending, we must ask serious questions about the long-term sustainability of the system," Terling added.
The findings appear as the UK’s total benefits bill is projected to rise from £353 billion to £431 billion by 2031-32. Prime Minister Burnham has indicated a willingness to consider significant changes to support young people on benefits, stating that “radical change” may be needed, though he did not specify a timeline for reducing the overall benefits bill.