The Government’s Spending Review announced this week commits major public service funding and contains several measures that could significantly impact low-income households and the advice sector. We welcome announcements that aim to tackle poverty including the expansion of free school meals and Winter Fuel Allowance eligibility, the 10 Year Affordable Homes Programme and the Warm Homes Plan. Research from DWP shows that around 17% people in the UK were in relative low income (relative poverty) before housing costs in 2023/24. This rises to 21% once housing costs are accounted for. It is right that the Treasury is focused on tackling this.
Despite these welcome announcements, the proposed cuts to disability benefits in the Pathways to Work Green Paper risk cancelling out this positive work. Indeed, Office for Budget Responsibility (OBR) analysis has demonstrated that restricting PIP eligibility could remove support from up to 800,000 people and push 250,000, including 50,000 children, into poverty.
Our members offer free and independent advice services to people struggling with financial insecurity. It is critical that these services are supported. Our Advice Saves Report found that, in 2024, 55% of our members were not confident that they could meet demand. Additionally, 88% of organisations said that recruiting and retaining staff was a significant hurdle. Therefore, we urge HMT and DfE to ensure that new investment in skills and training is targeted at improving routes into the advice sector and retaining staff. Research from the Access to Justice Foundation shows that every £1 invested in free specialist legal advice, the government saves £2.71, potentially saving the Treasury £4 billion annually. It is in the Government’s interest to work with the independent advice sector to ensure that the organisations supporting vulnerable people are sustainably funded and well-resourced to meet demand.
See our full reaction to the key announcements below, the complete Treasury documents here, and, if you would like to get in touch to discuss any of these in more detail, please contact willem.vandeven@adviceuk.org.uk.
The Review announces a £29 billion uplift to NHS day‑to‑day spending. This is a welcome investment and we approve of the Health Secretary’s focus on improving preventative care. Furthermore, the commitment to providing mental health teams in schools will help address escalating children and young people’s mental health needs. We support this move and urge that these teams are trained to signpost families to broader welfare and financial advice services, ensuring holistic support reaches those in need. The expansion of free school meal eligibility to all pupils with a parent in receipt of universal credit and the establishment of 750 new breakfast clubs are also welcome announcements.
However, we are still calling for stronger integration between healthcare and welfare advice and are looking forward to seeing more information in the forthcoming NHS 10 Year Plan. Our members report that their clients are often dealing with several different problems at once, for instance long-term health issues and financial insecurity. Therefore, we urge the UK Government to follow their Labour colleagues in Cardiff and implement a cross-departmental advice sector strategy. Modelled on the Welsh Government’s Information and Advice Action Plan, social welfare advice should be integrated with health, housing, justice and social care sectors ensuring that problems are addressed holistically. We are disappointed that a funding settlement for advice services in England has not been confirmed.
We welcome the Chancellor’s announcement that this Spending Review provides an additional £1.2 billion per year by 2028-29 for the skills and FE sector. This includes funding to support over 1.3 million 16–19-year-olds to access high quality training and upskilling programmes, which the Government claims will support 65,000 additional learners per year by 2028-29. However, we are disappointed that, as announced last month, the Government will be scrapping funding for postgraduate apprenticeships. This age cap fails to acknowledge the value of career changers, mature entrants, and current advice professionals seeking upskilling. The advice sector needs accessible, flexible training and apprenticeships for adults of all ages to effectively tackle recruitment and retention challenges.
We also welcome the announcement that DWP will receive a 30% cash increase in capital funding for 2026-27 to renew its estate including jobcentres. This will support the department’s plans to transform jobcentres into integrated service hubs that combine health, skills, and employment support.
However, as mentioned, the independent advice sector is facing significant challenges in the recruitment and retention of staff as it struggles with limited resources and ever more complex client cases. To build a sustainable, high-quality advice sector that can meet growing public demand, we want the Government to introduce a comprehensive workforce development strategy, including ring-fenced funding for adult learners of all ages to access accredited advice training and qualification.
The Spending Review includes important investments aimed at reducing the cost of living, such as the expansion of the Warm Homes Plan, which could save families £600 per year on bills. We also welcome the re-expansion of eligibility for the Winter Fuel Allowance to all pensioners with taxable incomes of £35,000 or less in England and Wales for winter 2025/26—restoring support to approximately 9 million households. The Government confirmed a £39 billion investment in social and affordable housing over the next decade, which is very welcome.
The allocation of £842 million annually to transform the Household Support Fund into a new Crisis and Resilience Fund, providing multi-year support for councils to help the poorest households and prevent reliance on emergency food parcels is also an important development.
Finally, the Government will provide £950 million for the fourth round of the Local Authority Housing Fund, supporting councils to procure high-quality temporary accommodation. Alongside this, the Government will provide £100 million for the “transformation fund” to support early interventions tackling homelessness. This will better support clients of advice services who are homeless or in housing need.
However, we are concerned that the Governments’ goodwill, and welcome announcements on housing and poverty, are being undermined by the proposed cuts to disability benefits, which threaten to plunge tens of thousands of Britons into poverty. For our full reaction to these announcements, please see our open letter to the Secretary of State for Work and Pensions here. We are currently compiling our response to the Green Paper and are looking for members’ feedback on the proposals. If you would like to contribute case studies, data or perspectives on the reforms, please contact willem.vandeven@adviceuk.org.uk.
We welcome the Government’s investment in public services, energy security, and poverty reduction, including the expansion of Free School Meals, the Winter Fuel Allowance, and social housing. However, proposals to restrict disability benefits and the age cap on skills funding risk undermining this progress. We urge the Government to adopt a cross-departmental strategy for the advice sector, improve routes into the sector to mitigate staffing concerns, and protect those most at risk from poverty and financial exclusion. The sustainable investment in advice services is crucial in supporting the most vulnerable and represents a cost-saving opportunity for government.
