By Jason Theodorou

The coalition Government will bring in major reforms to the benefits system, which Work and Pensions Secretary Iain Duncan Smith sees as being 'on the verge of breakdown'. Mr. Duncan Smith has said that the UK stood to save billions with a more streamlined benefits system, and believed that this would also cut down on fraud.

Mr. Duncan Smith will reveal a series of plans that are designed to incentivise people to move back into work, particularly targeting those who are in 'entrenched poverty' and have been on benefits for up to nine years. He said: 'For many people taking a job leaves them no better off than a life on benefits, and this has trapped significant parts of our society in inter generational worklessness'.

The new arrangements will be published in 21st Century Welfare, a Command Paper which will include options such as combining income-related benefits and Tax Credits, merging support services for those in-work and out of work, and ensuring that benefits reflect circumstances such as children and housing.

Mr. Duncan Smith told the BBC that he wanted those in work to be 'better off... than they would be out of work and on benefits'. The cost of the programme was expected to run to £3 billion according to a previous estimate, but the Work and Pensions Secretary said that this was not a definitive figure. He said the reforms would ultimately lead to savings.

The reforms are designed to ensure that 'work will always pay', with many in the UK left in a worse financial position if they take on work than they are if they stay in unemployment. Labour have argued that the cuts will cost too much and said that the coalition Government was hampering positive initiatives taken by the previous administration, such as minimum wage and tax credits.

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