Think tank says transport investment needed alongside welfare reform

The UK needs a wider economic strategy combining welfare reform with increased investment in transport and other infrastructure to reconnect people in disadvantaged communities with employment, according to a report by the Centre for Social Justice (CSJ).

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The report, State of Dependency: How a broken benefit system is holding Britain back, says the government has spent £1.6 trillion on working-age benefits between 2006/07 and 2024/25, more than £1.1 trillion above public capital investment in transport, science and technology, housing, economic development and community amenities. The figures are presented in the think tank’s Welfare 2030 inquiry, chaired by former work and pensions secretary Sir Iain Duncan Smith.

The CSJ argues that rising welfare expenditure has increasingly compensated for weak local economies, low wages and limited productive investment, rather than addressing the underlying causes of worklessness.

Its analysis highlights regional disparities in public investment. Between 2000 and 2025, annual public capital investment in transport and economic development averaged almost £800 per person in London, compared with less than £370 in the North East, East Midlands and Yorkshire and the Humber.

The report also points to persistently weak economic growth in parts of the North East, South Wales, the M62 corridor and the Midlands. It argues that investment in infrastructure and local economies is needed to create employment opportunities and improve access to work.

Ben Gregg, head of welfare at the CSJ, said investment in struggling communities and removing barriers to business growth were necessary to build broader prosperity.

The report calls for welfare reform to form part of a wider programme to increase productive investment and reconnect people in left-behind communities with employment.