Viggo Terling, Chief of Staff at the Adam Smith Institute, said: “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.
“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. A compassionate welfare state must also be a financially sustainable one.”
The findings land as Britain’s total benefits bill is projected to climb from £353billion to £431billion by 2031-32.
Prime Minister Burnham has said he wants to reduce the number of young people outside work, training or education.
When asked whether this could mean cutting some benefits, Mr Burnham told Times Radio: “I am prepared to take difficult decisions because I can’t accept the idea that we have a million or more young people in their 20s on benefits. It’s not good for them. It’s not good for anybody. So there does need to be quite radical change in the way we support young people.”
Mr Burnham told the BBC he could not guarantee when the overall benefits bill would begin falling, adding that investment in support for young people would need to rise first. Some funding may need to be “reprioritised”, he said, but the welfare bill would eventually come down.