This is of course all utter nonsense. Welfare has consistently been reformed for the past thirty years. Even during the 1979-1997, when the narrative would have us believe nothing was done to welfare, the Conservatives introduced countless reforms, such as the Community Programme, Restart, the Job Training Scheme, Employment Training, the abolition of the Employment Department and of course Jobseeker's Allowance.
And also contrary to the welfare narrative, New Labour was ruthless in its pursuit to shake up the welfare state. This included changing certain benefits (ESA), stepping up on conditionality, 'making work pay' and the New Deals, which we now seem to forget were a rather ambitious set of active labour market policies. The way that the Coalition talk about welfare, you would think Labour had done nothing at all. It just isn't true.
What is the effect of this narrative? As you can see above, the effect is for governments to constantly chop and change the entire system. In their desire to convince the public that they are genuinely reforming the welfare state, the users of its services and recipients of its benefits are constantly subjected to wholesale reorganisations. I haven't read any specific research on this, but the consequence for many must be deep insecurity and anxiety about what the future holds.
This is also the question of where it ends. How can you go on reforming and reforming and reforming? My hunch is that it will end when there is very little welfare left to reform.