The Chancellor yesterday announced the Government’s latest economic plans during the Spring Statement. While we welcome plans to build more affordable housing and support people into work, we are deeply concerned that the Chancellor’s announcement confirms that the devastating disability benefit cuts announced last week will be expanded further. According to Office for Budget Responsibility (OBR) analysis, 3 million families in the UK will be affected by the welfare cuts, and government analysis suggest that an extra 250,000 people, including 50,000 children, may be pushed into relative poverty by 2029/30. Our members tell us that they anticipate these measures will increase demand as independent advice agencies already straining under limited resources. The announcement in full is available to read here.
Welfare Reform
Last week, the Secretary of State for Work and Pensions, Liz Kendall MP, announced reforms aimed at tightening the eligibility criteria for individuals claiming Personal Independence Payment (PIP), scrapping the Work Capability Assessment (WCA) in favour of the existing PIP system, and restricting access to the health element of Universal Credit (UC) for individuals under the age of 22, as well as cutting support for new UC claimants deemed unfit for work. OBR analysis suggests that 3 million families will be affected the welfare cuts and DWP’s impact assessment suggests that 150,000 people will not receive the Carer’s Allowance or the UC Carer Element. The reforms are likely to have a devastating impact on the individuals our members serve.
In our letter to the Secretary of State, we urged the Government to reconsider the welfare cuts due to the impact they will have on individuals who are supported by advice services, and the advice services themselves.
Yesterday, the Chancellor has extended these proposals further than originally indicated. The UC health element will be reduced by 50% for new claimants, with the reduced rate subsequently frozen. We are concerned that these measures will place further strain on vulnerable individuals and exacerbate the demand on independent advice agencies already operating under significant resource constraints.
There have been some welcome announcements. The £1 billion per year by 2029/30 pledged to deliver personalised employment, health and skills support for anyone on out of work benefits with a work-limiting health condition could be a great initiative. It is important that funding is made available to advice agencies as they are well placed to support individuals looking to return to work. However, the bulk of the announcements will still affect individuals who rely on disability benefits and increase the burden on the independent advice sector.
We will be submitting evidence for DWP’s welfare reforms Green Paper and we are calling on DWP to engage with AdviceUK and our members on these critical issues.
Housing
The Chancellor has announced welcome plans regarding housebuilding. The OBR forecasts that 300,000 new homes will be built annually by 2029/30, with 1.3 million new homes by the end of the forecast period. Additionally, the Chancellor committed to a £2 billion investment in affordable housing and plans to build up to 18,000 new social homes over the current Parliament. We hope that these measures will, in the long term, begin to address the long-term gap in affordable housing and alleviate the pressure on our members providing housing advice.
Conclusion
AdviceUK welcomes the Government’s commitment to expanding affordable housing and the £1 billion investment to help people into work. However, we are deeply concerned that further welfare cuts, especially the tightening of welfare eligibility, the 50% reduction and freeze of the UC health element, and enhanced checks, will disproportionately impact vulnerable individuals. These measures risk driving additional demand for advice services at a time when independent advice agencies are already under severe financial and staffing pressures.
Our members’ disappointment at these announcements is compounded by the lack of support the Government has committed to deliver to advice agencies. Given the stress and burden that the cuts to disability benefits will place on the sector, we will keep fighting for measures to alleviate pressure. Immediate support for the advice sector, including improving staff recruitment, retention, and training, is essential to ensure that those most in need continue to receive the vital support they deserve.
AdviceUK remains committed to advocating for the protection and enhancement of resources for the advice sector, and we will continue to engage with policymakers to ensure that the Government’s reforms do not undermine the support available to vulnerable individuals.
