IRRV Alert - week ending 8th January 2021
News
Reports
Removing the impact of changes in inflation from the welfare cap (6 January 2021)
Policy paper
Removing the impact of changes in inflation from the welfare cap
The methodology for removing the impact of changes in inflation from the welfare cap, as required by the Charter for Budget Responsibility.
Published 2 March 2017
Last updated 6 January 2021 — see all updates
From:
Documents
Technical note on welfare cap inflation
PDF, 60.9KB, 3 pages
Elasticity tables
MS Excel Spreadsheet, 34.9KB
Details
The welfare cap is one of the government’s fiscal rules. It maintains control of welfare spending. To ensure that changes in inflation-linked uprating assumptions will not increase pressure on the welfare cap or create headroom within it, the impact of changes in inflation assumptions on spending within scope of the welfare cap will be excluded from the welfare cap. The Charter for Budget Responsibility requires the Treasury to specify the definition of the changes in inflation for this purpose, which are set out in the technical note on this page and accompanying tables.
Published 2 March 2017
Last updated 6 January 2021 + show all updates