George Osborne has asked Iain Duncan Smith to find even deeper cuts to benefits

The Treasury has asked Iain Duncan Smith to find deeper cuts to welfare than planned before the election, according to reports.

The BBC’s Newsnight programme says the DWP has been asked identify £15bn of welfare cuts, a jump from the £12bn promised in Conservative manifesto spending plans.

The suggestion comes after a warning from the Institute for Fiscal Studies that even with benefits taking £12bn of the cuts burden, reductions to other departments that run public services would be felt keenly by voters.

“The cuts that the Government announces later this year in next month’s Budget and the following Spending Review may turn out to be deliverable,” said Carl Emmerson, the institute’s deputy director, earlier this month.

“But they certainly will not feel like is just 1 per cent being taken out of each area of spending, nor will it require merely ‘£13 billion from departmental savings’ as the Conservative manifesto described.”

A goal to take more from social security could help relieve the pressure on departments but allow the Conservatives to meet their spending plans.

But even existing £12bn benefit cuts would involve “difficult decisions”, the IFS says, with over £10bn yet to be specified even at the lower figure.

Alternatively, officials could be asking the department to identify more savings than needed in order to give ministers more options when choosing which £12bn to cut.

The same programme reported last week that some of the cuts could be made by slashing £5bn from tax credits for working families, hitting 3.7m low-income households.

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Benefits claimants are shortchanged by £5bn a year, says thinktank

One million people a year do not receive full housing benefit, rebutting argument that they are being overindulged

Millions of benefit claimants – who as a group fail to receive £5bn a year that they are due from the state – are being shortchanged by the welfare system rather than overindulged, a thinktank says on Sunday.

Rather than cutting benefits, ministers should seek to ensure that those on welfare receive their full entitlement, Demos says. Official figures show that one million people a year do not receive their full entitlement of housing benefit, equating to a failure by the state to pay out up to £3.1bn.

More than two million people a year do not apply for relief from paying their council tax bill, equivalent to more than £1.7bn in savings to the state. Meanwhile, the number of pensioners that were estimated to be entitled but not claiming pension credit was between 1.21 million and 1.58 million in 2009-10, worth a total of between £1.94bn to £2.8bn.

Those missing out on state assistance often end up as a burden to charities, the thinktank Demos says, and are not being properly helped into employment.

The report, The Ties That Bind, comes at a crucial time in the debate over Britain’s welfare state. Last week it emerged that error and fraud in the benefits system is costing the government around £3.5bn. In response Lord Freud, the welfare minister, said that he expected there to be a record level of prosecutions in 2014.

But this week’s report shows that the sum lost to error and fraud to those on benefits is dwarfed by the £5bn, at the most conservative estimate, owed but never paid out to those on welfare. On top of the benefits not claimed, statistics released last week show that the Department for Work and Pensions underpaid claimants, due to fraud or error, by around £1.6bn, which is a rise from the 2011 to 2012 underpayments of £1.3bn.

Demos says the government needs to change the law so that jobcentres should have a legal duty to ensure claimants are aware of their full benefit entitlement. The thinktank also recommends that the unemployed should be allowed to opt for help from recruitment consultants, rather than jobcentres, because of their poor record.

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by Daniel Boffey in the Guardian, 18th Jan 2014