Child Poverty Action Group: Debt Advice Handbook online

The new edition of CPAG’s Debt Advice Handbook is free to access online, thanks to our partnership with @MoneyPensionsUK

You can view the new handbook from any computer or mobile device:

http://tinyurl.com/4ca4ycd3

CPAG Survey on Two Child Cap

SHARE YOUR EXPERIENCE

The Child Poverty Action Group (UK) – CPAG are carrying out research to understand the impact of the two child policy on children and family life prior to abolition of the policy in April.

This is so they can conduct further comparative research later in the year on the impact of getting rid of the policy.

It would really help them if you can spare a few minutes to answer some questions about your experience of the two child limit.

They want to hear from parents who are not receiving tax credits or universal credit for a child born after April 6 2017.

The survey should take less than 5 minutes to complete.

No information will be used that could identify anyone involved.

Take the survey here: https://f.mtr.cool/mvoinbqtdb

You can find more information about the Child Poverty Action Group here – https://f.mtr.cool/pambkzwiyp

If you can spare a few minutes we’d be really grateful

The Cost of a Child in Scotland 2025

CHILD POVERTY ACTION GROUP’S ANNUAL COST of a CHILD REPORT

CPAG’s annual Cost of a Child report looks at how much it costs families to provide a minimum socially acceptable standard of living for their children.

It is calculated using the Minimum Income Standard (MIS) research, carried out by the Centre for Research in Social Policy at Loughborough University for the Joseph Rowntree Foundation.

The cost of raising a child to age 18 is £250,000 for a couple and £290,000 for a lone parent.
An inadequate social security system means many families, including some working full time, do not have enough income to cover the cost of a minimum standard of living.
A lone parent with two children working full-time on the minimum wage can only cover 79 per cent of these costs, while a similar couple can only cover 90 per cent. The same families across the rest of the UK can cover 69 percent, and 82 percent, respectively.
An out-of-work lone parent with two children only has enough income to cover 55 per cent of costs (46 per cent for a couple). The same families across the rest of the UK can cover 44 percent, and 37 percent, respectively.
Scotland specific policies (most notably the Scottish child payment) help families but still many families are struggling to meet their minimum costs.

Cost_of_a_child_in_scotland_2025_FINAL Download

Are tax rises a price worth paying for improved public services?

With the UK and Scottish Budgets in mind, Holyrood.com asked a panel of experts if tax rises a price worth paying for improved public services. Here’s how four members of Tax Justice Scotland responded:

Yes. Abolishing the two-child limit was absolutely the right thing to do. It immediately lifts 350,000 children out of poverty, 20,000 of them here in Scotland.

“In a country as wealthy as the UK it would be utterly incomprehensible for a responsible government not to have acted. 60 per cent of these children are in working families, others have parents whose ability to work is constrained by disability, ill health and bereavement.

These parents pay taxes but now need support with the costs of bringing up the next generation. It is in our interests to pay what’s needed to ensure we have the public services and social security that protect us all when unexpected economic and health shocks hit. Tax is vital for investing in children, and we should all be proud to pay our fair share – for our children’s sake and for the long-term economic security of our country.

John Dickie, Director, Child Poverty Action Group (CPAG) in Scotland

It is uncontroversial and self-evident, I believe, to say that we all rely on good public services. Whether parents packing kids off to school, businesses moving goods around the country, or all of us maintaining our health, quality services are essential.

And if we are to deliver on our shared ambitions for our country – reducing child poverty, increasing educational attainment, tackling our wide health inequalities – then we need to raise resources to fund these services.

Tax is vital tool in reaching these goals. But precisely how we use tax is the crucial question. We are a wealthy country, and how that wealth is taxed must move to the centre of debates about taxation. Frustratingly, the recent UK Budget once again focused largely on the taxation of income. There needs to be a greater emphasis on the taxation of wealth, and in Scotland finally reforming council tax would be a great contribution to that debate.

Peter Kelly, Chief Executive, The Poverty Alliance

Absolutely, but tax fairness really matters too. Right now, people across Scotland are seeing local services vanish, public services – like the NHS – struggling, and folk trapped in poverty. Yet they know that wealth at the top is soaring.

We must see tax, when revenues are spent wisely, as an investment in a fairer and greener Scotland, healthier lives, and care and support when we need it most. It’s also a down-payment on a healthy, inclusive economy.

But it’s not just about how much tax is raised, it’s about who pays. Our tax system favours the very richest. The UK Government should do much more to make wealthier households pay a fairer share. In Scotland, we must better tax property wealth by replacing the outdated, unfair council tax and tax luxury pollution through a private jet tax. Public support is strong for the wealthiest paying more: what’s missing is political courage.

Jamie Livingstone, Head of Oxfam Scotland

Tax Justice Scotland works in solidarity with a growing global movement of people campaigning for far tax reforms. We are a partner of (but independent from) Tax Justice UK and the Tax Justice Network.

The work of Tax Justice Scotland is led by a steering group made up of a sub-set of its members who collaboratively work together to guide the campaign.

TOMORROW: SCOTLAND DEMANDS BETTER

TOMORROW, Saturday 25th October, Child Poverty Action Group – alongside other members of the End Child Poverty Coalition – will be joining charities, community organisations, faith groups, trade unions and many more in a march from Holyrood to the Meadows in Edinburgh (writes CPAG Scotland’s MARIA MARSHALL).

#ScotlandDemandsBetter has been organised to give organisations and individuals in Scotland an opportunity to make their voices heard and demand that politicians make the change needed so that every household in Scotland can thrive.

Signs we are on the right track…

In a lot of ways, we have seen progress to tackle child poverty in the past several years, at least here in Scotland.

The passing of the Child Poverty (Scotland) Act in 2017 was a watershed moment. Following the abandoning of child poverty targets by the UK Government in 2015, the Child Poverty (Scotland) Act ( unanimously backed by all of Holyrood’s parties) set targets for child poverty reduction and requirements such as a tackling child poverty delivery plan to be published by the Scottish Government every four years.

The result of this cross-government, cross-party effort in Scotland has been to sharpen the minds of those who hold the power and drive real and tangible progress for families.

Since then, we have seen the introduction and expansion of the Scottish child payment (SCP), first introduced in February 2021 and now worth £27.15 a week for every eligible child under 16.

This has made a real difference for many low income families.

Along with other members of End Child Poverty and the Scotland Demands Better movement we are now calling for immediate and sustained increases in its value so that it reaches £55 per week by the end of the next parliament. Investing further in the Scottish child payment is the most direct and cost-effective tool available to the Scottish government to further reduce child poverty.

SCP is one of a suite of policy interventions in the first two delivery plans including; Best Start Foods and Best Start grant (replacing Healthy Start and Sure Start in the UK), an expanded offer of 1,140 hours of funded early learning and childcare, increased focus on parental employability support and the expansion of universal free school meals in primary schools (despite subsequent backtracking on promises for universal provision for P6-7 pupils too…)

Of all the interventions taken, it is the increased investment in social security in Scotland that is behind the diverging trend confirmed in the latest child poverty statistics which saw child poverty in Scotland fall by four percentage points, while rising (once again) UK-wide. Steps in the right direction for sure.

We’ve come some way, but not far enough

So on the one hand, we have seen some real success. In December last year, research commissioned by CPAG on the costs of raising a child, found that the gap between costs and incomes for families in Scotland was narrower than the rest of the UK. However, this same research found that Scotland’s lowest-income families are still left with less than half the income they need for a minimum socially acceptable standard of living.

Despite showing that progress had been made, this year’s child poverty statistics also confirmed that over one in five children in Scotland are still growing up in poverty. For those children, for all children, we are demanding better.

We can shout about the progress made, but for families living on the sharp end of the cost of living crisis, this will ring hollow. Summer holidays this year too often brought more stress and anxiety for Scottish parents than opportunities to learn and play. Like Hope, parent and participant in the Changing Realities project, who wrote in July:

“Already it has been a bit stressful. The kids are constantly hungry and “bored” then hungry again. Which means more food shopping. I can’t afford summer clubs/camps (tennis, football, multi sports, water sports etc) as they are coming in at around £40 a day and some of them state you have to bring your own packed lunches … I also am embarrassed to take the kids to a food bank this year. So if my oldest boy is in I’ll get him to watch my youngest and tell them “I’m going shopping.”

Too many families are being denied the security and opportunity to thrive that we all deserve. But looking to the future, there should be reason to feel hope.

Standing at the crossroads

We now have two governments, UK and Scotland, who have made a commitment to tackling child poverty. Campaigners are anxiously awaiting the UK child poverty strategy due to be published this Autumn.

Next year’s elections in Scotland also provide an opportunity for all parties, MSPs and candidates to commit to building on the progress made and delivering a better future for all of Scotland’s children.

In theory, we are at the cusp of a real opportunity for making progress on tackling child poverty. But we can also risk losing our way…

Will we build on the progress made in Scotland to meet the 2030 targets? Will the UK Government pull the levers in their power such as scrapping the two-child limit and benefit cap to move us in the right direction together?

Or will we see a stalling in Scotland, resting on existing progress and unable to keep up with the rising costs squeezing low-income families? Will the UK strategy fail to tackle the true drivers of rising child poverty such as the slashing of social security support in the past 15 years?

Walking with hope

In May last year, parents from the Changing Realities project launched their own campaign ‘Hope Starts Here’ with the aim to change the narrative on the progress we need to see by shifting the focus on the potential that all children have.

One parent, Faith, expressed that: “I hope that my children will be able to have endless possibilities of what and who they want to become in the future when they grow up. There is a big world waiting out there for them.”

Faith’s words encapsulate why members of the End Child Poverty coalition will be marching together to demand better for our children. All children should have endless possibilities of what and who they want to be when they grow up.

Better is possible. There is already ambition across the political spectrum to tackle child poverty. We now need to see the two-child limit and benefit cap scrapped at UK level, and in Scotland we need all parties to set out a clear path that will deliver year on year progress towards the 2030 targets, so that every child in Scotland can have the best possible start in life.

If you’re in Edinburgh on Saturday, please join us.

Spending Review: Charities urge Chancellor to abolish two-child limit

In advance of the Spending Review, Child Poverty Action Group have joined with other organisations to urge the chancellor to make a firm commitment that the two-child limit and the benefit cap will be abolished as part of the Autumn Budget.

Read our letter to the Chancellor:

Scottish policies “are working to shift the dial on child poverty”

Official statistics show child poverty falling
UK Government decisions ‘hold back further progress’

New statistics show that child poverty in Scotland has fallen, in contrast to the rest of the UK.

Annual statistics published yesterday show that compared with the previous year’s statistics, relative child poverty in 2023-24 reduced from 26% to 22% in Scotland while absolute child poverty fell from 23% to 17%. UK Poverty statistics published today show levels of relative child poverty at 31% and absolute child poverty at 26%.

Modelling published today suggests that UK Government policies are “holding back” Scotland’s progress. It estimates the UK Government could reduce relative child poverty by an additional 100,000 children in 2025-26 if it heeded Scottish Government calls to end the two child limit, replicate the Scottish Child Payment in Universal Credit, remove the benefit cap and introduce an essentials guarantee.

This model does not take into account the UK Government’s own impact assessment of its welfare cuts announced on Wednesday , which states that they will leave an additional 250,000 people, including 50,000 children, in poverty.

Social Justice Secretary Shirley-Anne Somerville said: “Eradicating child poverty is the Scottish Government’s top priority and we are committed to meeting the 2030 targets unanimously agreed by the Scottish Parliament.

“Our policies are having to work harder than ever to make a difference, against a backdrop of a continuing cost of living crisis, rising energy costs and UK Government decision making. However, we know these policies are working.

“Statistics published today show that, although we have not met the interim child poverty targets, the proportion of children living in relative poverty has reduced and year-on-year rates are now lower than they have been since 2014-15, while the proportion in absolute poverty has also fallen with the annual figure the lowest in 30 years.

“While JRF predict child poverty will rise in other parts of the UK by 2029, they highlight that policies such as our Scottish Child Payment, and our commitment to mitigate the two-child limit, ‘are behind Scotland bucking the trend’.

“But decisions taken by the UK Government are holding us back, and yesterday’s Spring statement will only make things worse. The DWP’s own figures show that proposed welfare cuts will drive 50,000 more children into poverty, which must call into question their commitment to tackling child poverty.

“I have already written to Work and Pensions Secretary Liz Kendall to seek reassurance about the purpose and direction of the UK Government’s Child Poverty Taskforce. The Taskforce’s credibility has been drastically undermined by the policies announced by the UKG in the past few days.”

Responding to yesterday’s official government statistics on child poverty John Dickie, Director of the Child Poverty Action Group (CPAG) in Scotland said: “These latest statistics show that Holyrood polices, especially the Scottish child payment, are working to shift the dial for children in Scotland in the face of poverty rising to record highs across the rest of the UK.

“It is obviously disappointing that progress falls short of the interim targets, but the statistics show that when government invests to support families then child poverty will fall.”

The latest figures show that in the single year 2023/24 22% of children were living in poverty against a target rate of less than 18%, but down from 26% in the previous year. The three-year average rate of child poverty between 2021 and 2024 was 23%, down from 24%.

Across the UK child poverty rose to a record high with 4.5 million (31%) now living in poverty. New analysis from Child Poverty Action Group (CPAG) shows child poverty will rise even higher under the current UK government – to 4.8m by the end of this parliament (2029/30) – unless it takes urgent action including scrapping the two-child limit in its forthcoming child poverty strategy and stepping back from benefit cuts.

The Child Poverty (Scotland) Act, passed in 2017 with the unanimous support of all the political parties, requires the Scottish government to ensure less than 10% of children are living in poverty by 2030/31.

Analysis published earlier this week by independent economists at the Fraser of Allander Institute concluded that “meeting the targets is still feasible but will require sizeable additional investment beyond what is currently proposed” and that “increases to the SCP (Scottish child payment) are the most effective tool available.”

The testimony of struggling parents backs up the picture painted by the new government data.

CPAG-Poverty-173-changing-realities Download

Lisa, a participant in Changing Realities, a participatory project documenting life on a low income, said: “The Scottish child payment has enabled me and my son to participate in more social and educational activities which normally we would have struggled to afford.

“It alleviates some of the financial pressure and gives me and my son more breathing space to enjoy life. The Scottish child payment has been a ‘game changer’ for me.”

Mr Dickie continued: “The message from the statistics, from the independent experts and from parents themselves is clear. The Scottish child payment is working to reduce poverty but a step change is needed in investment to meet child poverty targets.

“At the same time action is needed to boost earnings from work and reduce the housing and childcare costs that parents face.”

Commenting on the latest child poverty statistics, Mary Glasgow, chief executive of Children First said: “Failing to meet the interim target for reducing child poverty should be a wake-up call to everyone in Scotland. The slight decrease in child poverty doesn’t change the fact we are in the grip of a national childhood emergency.

“Behind these numbers are more than 200,000 children living in grinding poverty without the essentials who are going to bed hungry each night. Poverty has a devastating impact on children’s mental health, wellbeing, education and prospects that can last into adulthood.

“The First Minister says tackling child poverty is his number one priority. We urge him and his government to act now to invest in early help and support for families and to increase the Scottish Child Payment which is the most effective way to alleviate poverty. Children can’t wait.”

The latest child poverty statistics from the Scottish Government can be viewed here: Child poverty summary

Last year Children First worked with 1000 families struggling to make ends meet to provide financial wellbeing support.

If you are a parent or carer who is worried about money, call the Children First support line on 08000 28 22 33 or visit www.childrenfirst.org.uk/supportline to start a web chat.

Aberlour Chief Executive SallyAnn Kelly OBE said: “Aberlour acknowledges the slight reduction in child poverty however is disappointed that the figures remain significantly above the interim target, highlighting the need for stronger efforts to meet the 2030/31 goal. Too many children in Scotland still grow up in poverty.

“Scottish Government actions, particularly the Scottish Child Payment, are beginning to make a difference. However, with looming financial uncertainty due to UK-level benefit changes, more action is needed over the next five years to sustain progress.

“Despite challenges, the target remains achievable if the Scottish Government prioritises investment, leverages all policy tools, and collaborates with the UK Government where necessary. Increased investment in social security, particularly a significant rise in the Scottish Child Payment, is essential.

“However, social security alone won’t lift families out of poverty long-term. It must be combined with action on housing, employment, childcare, and addressing the public debt crisis. Immediate support is needed for those in greatest need, alongside long-term strategies to build community capacity and create sustainable routes out of poverty.

“Scotland must move from managing poverty to preventing it. The First Minister must uphold his commitment to ending child poverty as a top priority. We cannot fail Scotland’s children.”

Save the Children Scotland’s Fiona King said: “Today’s child poverty stats show that positive policy choices, including the Scottish Child Payment are making a difference, but not nearly enough is being done to give all children a decent start in life.“

Campaigners say it’s not too late to end the injustice of child poverty

Responding to today’s figures on poverty and inequality in Scotland, Poverty Alliance chief executive Peter Kelly said: “People in Scotland want a compassionate country beyond the injustice of child poverty. Today’s figures finally confirm what we all feared – we are not on course to build that better future.

“In Scotland we have clear, legal targets to reduce child poverty that the Scottish Parliament approved unanimously. But with the interim targets now missed, it is vital that our politicians do more to turn their words and commitments into the fundamental action we need.

“Child poverty is shameful. It highlights that our social security system and economy are failing to deliver what we all need to build a better life and a better future. By allowing such levels of poverty to persist we are denying children their rights and undermining the social foundation that they need to thrive, develop their talents, and achieve their potential.

“But it’s not too late. There are concrete, practical things that the Scottish Government can do now to meet our legal child poverty targets in 2031. They can increase the Scottish Child Payment to £40 a week. They can invest in flexible, accessible childcare. They can expand free school meals. They can strengthen the public services that we all rely on. And they can work to build a well-being economy with good jobs, secure hours, and real Living Wages.

“We have choices to make in our country, about how we unlock our country’s wealth to investment in the common future. We must invest in policies like the Scottish Child Payment to invest in our children’s future. Together, we can build a Scotland beyond the injustice of needless poverty.”

‘CATASTROPHIC’: Spring Statement welfare cuts will drive 250,000 more people into poverty

Chancellor ‘delivers security and national renewal in a new era of global change’

Chancellor vows to bring about “new era of security and national renewal” as she delivered a Spring Statement to kickstart economic growth, protect working people and keep Britain safe.
People to be on average £500 a year better off by the end of this parliament compared to under the previous government, putting more money in people’s pockets.
OBR forecast concludes government’s landmark planning reforms will result in a £6.8 billion boost to the economy and housebuilding at its highest level in over 40 years by 2029-30
Growth at the heart of Plan for Change as £13 billion of additional capital spend allocated alongside £2.2 billion defence funding boost next year.

THE Labour government said people will be on average £500 better off from 2029, relative to OBR’s autumn forecast, helping to deliver the Plan for Change as the Chancellor yesterday (Wednesday 26 March) announced a Spring Statement to grasp the opportunities in a changing world.

THEY WON’T. From November 2026, 370,000 people who already get PIP will lose it and another 430, 000 who would qualify now no longer will. These people will lose £4500 a year each. And 150,000 carers who look after them will no longer receive their £83.30 a week Carer’s Allowance.

The OBR has also concluded that the government’s landmark planning reforms will result in UK housebuilding reaching its highest level in over 40 years, bringing the UK one step closer to its Plan for Change mission to build 1.5 million homes.

The government says economy will be 0.2% larger in 2029-30 because of the reforms – worth around £6.8 billion in today’s money – growing to 0.4% over the next ten years. This represents the biggest positive growth effect it has ever forecasted for a policy that comes at zero-cost to taxpayers. The reforms will secure over 170,000 new homes for hard working families and leave borrowing £3.4 billion lower in 2029-30.

The Chancellor also set out how the government is protecting national security and maximising the growth potential of the UK defence sector by confirming a £2.2 billion increase in the defence budget in 2025-26 while ensuring UK defence is on the cutting-edge of technology and innovation.

But growth is still not where it should be, so at this Spring Statement, this government has gone ‘further and faster’ to kickstart growth by training up to 60,000 young people to get Britain building again; increasing capital investment by £13 billion over this parliament; and fixing public services by tearing out waste from its roots.

Growth

Kickstarting economic growth is the number one mission of this government, putting more money in people’s pockets. The government has already made considerable progress; supporting a third runway at Heathrow; revitalising the Oxford Cambridge Growth Corridor, launching the National Wealth Fund and making the right choices on public investment to drive growth across the UK.

The actions of this government across the Autumn Budget and Spring Statement, if sustained, lead to a 0.6% rise in the level of real GDP by 2034-35, signalling the government’s growth plan is working.

The OBR concluded that the stability rule is met by £9.9 billion and the investment rule is met by £15.1 billion. Both rules are met two years early, meaning from 2027-28 the government is only borrowing for investment and net financial debt is falling.

The government is not satisfied with short-term growth figures, and is going further and faster today to improve this:

To go further and faster to get Britain building, the Chancellor has today announced a further £13 billion of capital investment over the Parliament to go further on growth, on top of the £100 billion uplift announced at Autumn Budget. This will deliver the projects needed to catalyse private investment, boost growth and drive forward the UK’s modern industrial strategy – unlocking the potential of the Oxford Cambridge Growth Corridor which could add up to £78 billion to the UK economy by 2035.
Taken together, this greater capital investment more than offsets the modest savings on day to day spending and means the total departmental spending will increase over the next five years, when compared with plans in the Autumn.
Over this Parliament, the government is funding a £625 million package to boost skills in the construction sector, which is expected to provide up to 60,000 more skilled construction workers to support the government’s plans to deliver 1.5 million homes in England over the parliament and progress vital infrastructure projects.
As part of this, the government is providing further support to scale up existing construction skills pathway over this Parliament through £100 million for 35,000 additional training places in construction-focused Skills Bootcamps, supporting trainees, ‘returners’, and existing employees to succeed in the sector. Building on the £40 million investment in the new Growth and Skills Levy at Autumn Budget 2024, the government is also providing a further £40 million to support up to 10,000 more young people to access new construction Foundation Apprenticeships, which will provide a key entry route into a thriving industry.
The government is ensuring there are enough skilled construction workers in the system, with £100 million to deliver 10 Technical Excellence Colleges specialised in construction across every region in England, and £165 million to increase funding for training providers delivering construction courses for 16-19-year-olds and adults.
The government is committed to supporting employers to unlock further investment in training to deliver more skilled construction workers, and is providing £100 million, alongside a £32 million contribution from the Construction Industry Training Board to deliver up to 40,000 industry placements in construction each year.
Supported by the construction skills package, the government confirmed this week that there will be a £2 billion injection of new grant funding to deliver up to 18,000 new social and affordable homes. The new funding will only support developments on sites that will deliver in this Parliament, getting spades in the ground quickly to build homes in places such as Manchester and Liverpool.

Defence

The world is changing before our eyes, reshaped by global instability, including Russian aggression in Ukraine. Europe is facing a once-in-a-generation moment for its collective security, with conflicts overseas undermining security and prosperity at home.

A month ago, the PM announced the biggest sustained increase in defence spending since the Cold War as a result of the changing global picture, now reaching 2.5% of GDP by April 2027, and with an ambition to reach 3% in the next Parliament subject to economic and fiscal conditions.

We are going further and faster to protect our national security and maximise the economic growth potential of the UK defence sector:

Increasing the defence budget by £2.2 billion in 2025-26, taking additional spending on defence to over £5 billion since the Autumn Budget.
This raises spending on defence to 2.36% next year and will be invested in fitting Royal Navy ships with Directed Energy Weapons five years earlier than planned, providing better homes for military families and modernising His Majesty’s Naval Base Portsmouth.
Setting a minimum 10 percent ringfence for equipment spending on emerging technologies like drones and autonomous systems, dual-use technology, and AI-powered capabilities, so that British troops have the tools they need to fight and win in modern warfare.
Getting this new tech into the hands of our armed forces quicker by cutting away bureaucracy, with a new UK Defence Innovation unit within the Ministry of Defence spearheading efforts to identify promising technology and ensure these get to the frontline at speed, while also bolstering the UK tech sector and crowding in private investment.
Creating bespoke procurement processes for different types of military equipment, learning lessons from our rapid support for Ukraine to drive faster timescale targets for operationalising new tanks, aircraft and other essential tools for modern warfare.
This government is determined to transform the defence sector into an engine for growth by focusing this investment on where it boosts the productive capacity of the economy such as investment in innovation and novel technologies. As a result of the increase in defence spending to 2.5%, the government estimates this could lead to around 0.3% higher GDP in the long run, equivalent to around £11 billion of GDP in today’s money.
The government’s investment in defence will also support its number one mission to deliver economic growth. UK citizens will be protected from threats at home whilst creating a stable environment in which businesses can thrive, and supporting highly skilled jobs and apprenticeships across the whole of the UK.

Reform

The government is determined to make the public sector more productive and to improve services for working people. But the changing world means we need to go further and faster to ensure we can deliver the public services that working people care most about.

The government has shown its commitment to taking the difficult decisions required to drive efficiencies and reform the state – including announcing that the world’s largest quango, NHS England, will be brought back into the Department for Health and Social Care, reducing bureaucratic inefficiencies and duplication; and driving out wasteful government spend through cancelling thousands of government credit cards.

Getting more people into jobs is also central to the government’s growth mission. This broken welfare system that is letting people down by asking them to prove what they can’t do, rather than focusing on what they could do with the right support – trapping people due to fear of trying work, lack of support and poor financial incentives.

The social security system will always protect those who can never work, that is why this government is proposing an additional premium that will safeguard their incomes. And will end reassessments for people with the most severe, life-long conditions to give them dignity and security.

Helping more people into work is a central aim of these reforms and which is why the government is tackling incentives to be inactive by abolishing the WCA, rebalancing Universal Credit, and investing more into employment support.

We will always support those with long term health conditions through the Personal Independence Payment, which will remain an important non-means tested benefit for disabled people and people with long term health conditions. But these reforms will make the system more targeted and sustainable to ensure the safety net is there for those who need it most.

The OBR have now set out their final assessment of costings and confirmed this welfare package will reduce welfare spending by £4.8 billion in 2029-/30.

The government will modernise the Civil Service into a more productive and agile organisation that can effectively deliver the Plan for Change, underpinned by a digital revolution, while cancelling thousands of government procurement cards.

Today, the Chancellor has gone further:

The Chancellor has confirmed the creation of a £3.25 billion Transformation Fund to support the fundamental reform of public services, seize the opportunities of digital technology and Artificial Intelligence (AI), and transform frontline delivery to release savings for taxpayers over the long-term.
The Fund will invest in vital public services and accelerate the modernisation of the state by taking the next step to reform the children’s social care system through an additional £25 million for the fostering system. This will include funding the recruitment of a further 400 new fostering households, providing children with stability and addressing cost pressures on local government.
The fund will also support the managing offenders in the community, by providing £8 million for new technology so probation officers can focus on reducing reoffending, rather than filling out forms.
In addition, it will provide £42 million for three pioneering DSIT-led Frontier AI Exemplars. These Exemplars will test and deploy AI applications to make government operations more efficient and effective and improve outcomes for citizens by reducing unnecessary bureaucracy.
To create an agile and productive state we are also providing £150 million for government employee exit schemes. This will support a leaner and more efficient Civil Service, helping to reduce administration costs by 15% by the end of the decade.
The Chancellor also announced a package of measures to close the tax gap, raising £1 billion per year by 2029-30. The UK tax gap was estimated to be around £40 billion in 2022-23.
The Spring Statement earmarks around £80 million in new money for third party debt collectors to bring in £1.3 billion over the next five years – a return of around £16 for every pound spent for UK public services and investment projects. HMRC will also receive £4 million in new funding to pilot a new test and learn programme with the private sector to improve the tax collection agency’s approach to recouping older unpaid tax debt. Ministers will decide whether to proceed with a larger exercise later this year based on the results of this test.
An additional 600 staff will also be recruited into HMRC’s debt management teams. This means that for every £1 spent on these staff, over £13 of debt is expected to be recovered. The staff will work with the private sector to make collecting tax debt more efficient including through automating admin processes.
The Spring Statement also announces £100 million in new funding for HMRC to recruit a further 500 compliance officers from April 2025. This will raise £241 million in unpaid tax over the next five years.
Late payment penalties for VAT and Making Tax Digital for income tax Self Assessment will increase to incentivise taxpayers to pay on time. This will be from 2% to 3% at 15 days, 2% to 3% at 30 days, and 4% to 10% from day 31. This will take effect from April 2025.
As announced in the autumn, Making Tax Digital for income tax Self Assessment will be extended to sole traders and landlords with income over £20,000. The Spring Statement confirms that this additional group will join Making Tax Digital from April 2028. This will build on the existing plan which will see sole traders and landlords with income above £50,000 joining from April 2026, and those with income above £30,000 joining from April 2027. Around 4 million businesses have an income below the £20,000 threshold.

Looking Forward

This Spring Statement builds on the Autumn Budget and the decisions taken since required to deliver stability to the British economy and kickstart economic growth.

The government will set out its plans for spending and key public sector reforms at the Spending Review which will conclude on 11 June 2025.

This will not be a business-as-usual Spending Review. The government has fundamentally reformed the process to make it zero-based, collaborative, and data-led, in order to ensure a laser-like focus on the biggest opportunities to rewire the state and deliver the Plan for Change.

At the Spending Review, the Budget in the autumn and across the Parliament, the government will continue to prioritise growing the economy to deliver change.

RESPONSES:

UK spending cuts ‘risk harm to most vulnerable’

Finance Secretary responds to Spring Statement

Spending cuts announced by the Chancellor risk harming some of the most vulnerable people in society, Finance Secretary Shona Robison has said.

Responding to the Spring Statement, Ms Robison said: “Today’s statement from the Chancellor will see austerity cuts being imposed on some of the most vulnerable people in our society. The UK Government appears to be trying to balance its books on the backs of disabled people.

“Not content with these cuts, the UK Government is still expected to short-change Scotland’s public services on additional employer National Insurance costs to the tune of hundreds of millions of pounds. This will be felt in public services that people rely on up and down the country – services such as our NHS, GPs, dentists, social care providers, and universities.

“The UK Government’s choice to increase defence investment is welcome, but its choices to shortchange public services and deliver austerity cuts to some of the most vulnerable are deplorable.”

TRUSSELL:

Trussell responds to ‘catastrophic’ Spring Statement

Cara Hilton, Senior Policy Manager at Trussell in Scotland, said: “Today’s announcement has incredibly worrying implications for disabled people in Scotland.

“The insistence by the Treasury on driving through record cuts to disabled people’s social security to balance the books is both shocking and appalling. People at food banks are telling us they are terrified how they’ll survive.

“These brutal cuts to already precarious incomes won’t help more disabled people find work, but they will risk forcing more people to skip meals and turn to food banks to get by.

“Cuts come at a cost. Driving up hunger and hardship means more spending on already struggling public services, with increased hospital and GP visits a very likely outcome of these actions.

“Disabled people are already three times more likely to face hunger, and over three quarters of people in receipt of Universal Credit and disability benefits are already struggling to afford the essentials like food. This will only get worse.

“These cruel cuts are out of touch with what voters want from this government. The government says people voted for change in Westminster, but we know that seven in ten voters across political parties agree the social security for disabled people should at least be enough to cover essential living costs. This is a change for the worse, and it is disabled people who will pay the price.”

David, 46, has a bone disease and is terrified by the prospect of cuts to his disability benefits. He has recently been forced to turn to a Trussell food bank for support.

He said: “I am terrified now that the Chancellor has confirmed that my disability benefits will be cut. The bone tumours in my hips cause me pain everyday and force me to use crutches, and in the cold weather my symptoms worsen but I already can’t afford to put the heating on.

” I don’t know how I’ll survive. It’s not my fault I’m disabled, and I shouldn’t be punished for it.

“Life costs more if you’re disabled. Things like specialist equipment and travel to healthcare appointments all add up. PIP – which the government is brutally cutting – is there to account for these extra costs. It is not a luxury, and I shouldn’t need to use a food bank or turn to charities like Trussell for support.

“Cutting my benefits won’t get me back to work – it will just push me deeper into poverty.”

JOSEPH ROWNTREE FOUNDATION

“The Chancellor said today that she would not do anything to put household finances in danger Yet the government’s own assessment shows their cuts to health related benefits risk pushing 250,000 people into poverty, including 50,000 children.

“Their assessment also found:

800,000 will lose PIP according to the OBR
3m will lose money from changes to the main health element of UC, £500 a year for existing claimants, and £3000 for new claimants
£500m will come out of the carers benefits bill as 150,000 lose carers allowance or UC care element.

“The Chancellor said the world has changed, and today’s announcements places the burden of that changing world on the shoulders of those least able to bear the load. These cuts will harm people, deepening the hardship they already face.”

CHILD POVERTY ACTION GROUP:

Responding to today’s Spring Statement, chief executive of Child Poverty Action Group Alison Garnham said: “Stealth social security cuts bring neither stability nor security to struggling families and will push child poverty even higher.

“Growth and better living standards are not achieved by taking money from families with the least.

“Government must invest in social security support – not cut it – for the most vulnerable, or risk being remembered as the Labour administration under whose watch child poverty continued to rise.”

CARERS UK:

STUC:

INDEPENDENT ALLIANCE MPs:

KIM JOHNSON MP:

OCTOPUS ENERGY:

Greg Jackson, CEO of Octopus Energy, said: “It’s good to see the focus on planning and other reforms that can unlock investment to help make Britain more productive and drive growth.

“We were also pleased to see the receipts from the Government’s sale of Bulb to Octopus funding 36,000 homes for armed forces families. It’s a sign of how business and Government can work together for the good of the country.”

FRONT PAGES:

MOMENTUM:

NEW ECONOMICS FOUNDATION:

JEREMY CORBYN:

PRIME MINISTER KEIR STARMER:

THE NATIONAL:

TRADES UNION CONGRESS (TUC):

Responding to today’s (Wednesday) Spring Statement, TUC General Secretary Paul Nowak said: “Labour inherited a toxic economic legacy from the Conservatives. But at the Budget the Chancellor took the right call to invest in repairing our public services and infrastructure.

“To rebuild Britain this approach must continue long-term. In the face of strong global headwinds, we need to keep building stronger foundations at home. That must include protecting the most vulnerable.

“As the last 14 years have shown us – you cannot cut your way to growth. UK taxes are low as a share of GDP. Those with the broadest shoulders must continue to contribute more through a fairer tax system.

“And the Tories’ botched Brexit deal must be improved to boost growth and trade.”

On the government’s social security reforms, Paul said: “Ministers need to rethink their plans. Decisions that affect millions of people’s lives must be made with care – not as a last-minute response to changed fiscal forecasts.

“These changes mean many disabled people – whether they are in work or not – will be pushed into hardship.

“And removing support could even make it harder for some people to stay in their jobs.

“Disabled people need timely access to high quality healthcare, and accessible jobs – particularly in the towns and communities where there are fewest opportunities.”

On the public sector workforce, Paul added: “Public sector workers are key deliverers of national renewal.

“But after 14 years of Tory chaos and ruin, many feel burnt out and demoralised.

“It’s vital the government invests in these workers and recognises the key role they play in improving the services we all rely on.

“Any approach to transforming our public services must include clear workforce plans for every part of our public sector, developed in partnership with staff and unions.”

On the OBR’s growth forecasts, Paul said: “It is time to review both the role of the OBR and how it models the long-term impacts of public investment. Short-term changes in forecasts should not be driving long-term government decision-making.”

UNITE THE UNION:

UK FINANCE:

David Postings, Chief Executive Officer, UK Finance said: “The chancellor’s Spring Statement focused on stability and growth in the UK. We welcome the government’s continued commitment to growing the economy and the financial services sector is committed to playing its part in support.

“Building on recent positive regulatory reform plans, we now look forward to the upcoming Industrial Strategy, which will be key to unlocking further investment and delivering growth through various sectors, including financial services.”

MENTAL HEALTH FOUNDATION:

LLOYDS BANKING GROUP:

Charlie Nunn, Chief Executive Officer, Lloyds Banking Group said: “A safe and lasting home is the foundation for good lives and livelihoods, and we welcome this boost to building much-needed social and affordable homes.

“As the UK’s biggest commercial supporter of social housing, we’re working across the private, public and community sectors to help increase provision of good quality, genuinely affordable housing for those in need.”

UNITE HOSPITALITY:

DAILY MIRROR:

POVERTY ALLIANCE:

Responding to the Spring Statement, Poverty Alliance chief executive Peter Kelly said: “People in the UK voted for change at the last election because they were desperate for a government that delivers a just and compassionate country. Today’s announcements undermine that ambition.

“It is completely unjust to, once again, balance the books on the backs of the those on the lowest incomes. Today’s statement layered additional cuts to our social security system on top of those announced last week. That will have a devastating impact for households across the country.

“The Government’s own analysis shows that these changes will push at least 250,000 people, including 50,000 children into poverty, undermining the forthcoming child poverty strategy before it’s even published.

“These cuts will push people into debt and destitution. They will continue the need for food banks. They will stop people heating their homes, or charging essential medical and support equipment.

“People know that there is no justification for these cuts. It does not have to be like this. The Chancellor could scrap her self-imposed fiscal rules or use our taxation system to raise the revenue needed for the better future we all want to see.

“The UK Government is re-running a failed experiment – austerity will not deliver economic growth. And it certainly won’t deliver a just and compassionate society.”

SCOTTISH HUMAN RIGHTS COMMISSION:

Deep concern about impact of UK Government’s Spring Statement

The Scottish Human Rights Commission (SHRC) is deeply concerned about the impact of announcements on the future of the UK welfare system in the UK Government’s Spring Statement, especially for disabled people and their families and communities.

Plans to cut the health element of Universal Credit will have a direct effect on the human rights of those disabled people in Scotland who are unable to work. Although payments to support people with the additional costs of disability are devolved in Scotland, the UK Government’s proposals will have negative consequences for the Scottish Budget.

Severe economic hardship

Earlier this month, the UN Committee on Economic, Social and Cultural Rights, which holds governments around the world to account for their record on human rights, warned that changes to the UK welfare system introduced since 2012 have “eroded the rights to social security and to an adequate standard of living, disproportionally affecting persons with disabilities, low-income families and workers in precarious employment” and warned that these changes have resulted in “severe economic hardship”.

Last year, the UN Committee on the Rights of Persons with Disabilities reiterated its position that the UK welfare system is leading to ‘grave and systematic’ violations of disabled people’s rights. Over the past week many disabled people, Disabled People’s Organisations and civil society organisations have expressed shock and fear about what further changes to the system could mean for people.

Professor Angela O’Hagan, Chair of the SHRC, says: “With these announcements, the UK Government is not only disregarding the expert findings and recommendations of human rights bodies, but actively pursuing regressive changes that further deteriorate the rights of disabled people in Scotland.

“Indeed, these steps may potentially represent a breach of the UK’s obligations under international human rights law, particularly its duty to progressively realise the rights to social security, an adequate standard of living, and non-discrimination.

“Social security, an adequate standard of living, and non-discrimination are not optional benefits — they are binding human rights that the UK is required to respect, protect, and fulfil for everyone.

“These proposals fly in the face of both the letter and the spirit of the UK’s human rights obligations.”

VOLUNTEER SCOTLAND:

We share the concerns voiced by many third sector organisations regarding the Chancellor’s Spring Statement on Wednesday (writes Volunteer Sotland’s SARAH LATTO).

The significant cuts to health-related benefits have the potential to push more people into financial difficulty. This would create significant additional demand for third sector services and the volunteers that support them.

This comes at a time when the third sector is facing unprecedented pressures, and volunteer participation is in significant decline. Given the reported challenges many organisations are experiencing in recruiting new volunteers, this could add considerable pressure to existing volunteers who give their time to support people in crisis. This is not sustainable and could contribute to a further decline in volunteer participation.

Last week we published research showing that weekly participation in formal volunteering can lead to wellbeing benefits worth an estimated £1000 per person per year.

This same research also found that the effect of volunteering on mental wellbeing for people with a disability or long-term health condition was seven times larger than for people without.

Despite these clear benefits, we are concerned that the announced reduction in welfare spend will prevent many people in receipt of benefits from pursuing volunteering.

Our ongoing research regarding the impact of the cost of living crisis on volunteering suggests that the capacity of many people to volunteer is increasingly diminished.

This is because of competing demands on their time and rising stress or anxiety regarding their finances. The planned changes to welfare spend will likely exacerbate this situation further, meaning many people in receipt of health-related benefits may feel unable to participate in an activity that is likely to improve their health and wellbeing.

As a result, we join many voices from the third sector in urging the Chancellor to rethink her plans around welfare spend.

FRASER OF ALLANDER INSTITUTE:

Spring Statement reaction: a second fiscal event of the year after all

The Chancellor may have tried to portray it otherwise, but her words in the Commons and the length of the scorecard of measures published by the OBR betray a different story: this really was a fiscal event, and a significant one at that.

It was also one where the forecasting process was nowhere as smooth as we hoped it might be given how much hay the Chancellor made out of strengthening the role of the OBR in the Autumn. Instead, we have seen a number of measures either uncertified or included only on a provisional basis, and with no time to evaluate their supply-side effects.

Given how long these measures have been speculated about, the last-minute tweaks and the scramble to announce further welfare reforms to make the sums add up to the £5bn in savings are pretty disheartening. It also makes us wonder about the reasons for announcing the headline amounts last week, before ultimate certification by the OBR.

It is not credible that the Chancellor or the Work and Pensions Secretary were not aware of the OBR’s concerns at the time of the announcement, and so we are left to wonder why figures that weren’t final were bandied about beforehand instead of being left for the appropriate fiscal event.

The underlying picture deteriorated significantly, and so spending cuts have filled the gap

As widely predicted, the Chancellor would have seen her fiscal rules broken had she not made significantly policy decisions, which collectively cut current spending by nearly £9 billion a year by 2029-30.

Chart: How the Chancellor restored her headroom

Source: OBR

Debt servicing costs are the main reason for the deterioration. Higher market interest rates raised the cost of servicing government by just over £10 billion by the end of the decade, more than wiping the starting headroom. Faced with this, and after staking her credibility on complying with the fiscal rules, the Chancellor decided to mostly lean on the spending side of the ledger to essentially get back to where she started.

This means a heavily backloaded set of policy decisions, with spending cuts coming from 2027-28 onwards. Changes to incapacity and disability benefits mostly affect spending from then on, by £1.8 billion in that year and rising to £4.6 billion by 2029-30.

Changes to the path of day-to-day departmental spending also rise to over £5 billion by 2029-30, although some of that is offset by specific investment programmes such as employment support, DWP delivery and HMRC compliance. On net, current departmental spending has been cut by £3.6 billion by 2029-30 relative to plans.

There have also been some increasing in the tax take. Much of it is from compliance activity and tax debt collection, although there are also additional council tax increases allowed in England and increases to passport and visa fees. Receipts are higher by £2.3 billion by 2029-30 because of measures.

But the Chancellor has had to run just to stand still. She is just as close to missing her fiscal rule as she was in October, and that leaves her exposed to any weaknesses or market movements between now and the Autumn. Things may well turn out for the better – but that is far from guaranteed, and it’s as close to a 50-50 bet as it gets.

Chart: Headroom against the main fiscal target since 2010

Source: OBR

What do the announcements mean for the Scottish Budget?

In the very short-term, there is a small amount of additional funding (£28 million) for the Scottish Government in 2025-26 due to a small increase in departmental spending at UK Government level.

Towards the end of the forecast, however, the picture is significantly more challenging in terms of what it means for Holyrood’s finances. The cuts in departmental budgets announced by the UK Government – even after accounting for some consequentials from employment support programmes and DWP delivery of welfare reforms – mean significant reductions in funding for the Scottish Government relative to what was previously included in the forecasts. Of particular significance are the £200 million and £435 million cuts in implied funding for the Scottish Budget in 2028-29 and 2029-30.

The current forecast points to the PIP reforms reducing the block grant adjustment for social security devolution by increasing amounts, from £177 million in 2027-28 to £455 million in 2029-30. This is in line with what we discussed in recent blogs.

Put together, and in the absence of any other changes, the Scottish Budget would be around £900 million worse off on the current side in 2029-30 than previously projected. On the other hand, some additional capital spending on areas which are devolved in Scotland – so aside from the defence spending increases – are expected to raise the Scottish Government’s capital budget by nearly £250 million by 2029-30 relative to current plans.

Chart: Effects of the Spring Statement measures on the Scottish Budget

Source: OBR

There’s still much we don’t know about the welfare reforms

One key policy change from last week’s Green Paper that the OBR have not been able to cost is the removal of the Work Capability Assessment (WCA) that currently determines whether a person is eligible for the Universal Credit (UC) health element. The UK Government have proposed that the PIP assessment will be used instead.

The OBR note the absence of key policy detail, including how entitlement will operate in Scotland where PIP is being phased out. They do state that they expect the policy to have a “material” fiscal impact, both on spending on UC but this could be offset by an increase in people claiming PIP. The labour market response of this (as with most of the other Green Paper policies) is also yet to be analysed by the OBR.

These changes will directly impact on people in Scotland as UC is a reserved policy, but as already noted, how this will happen given that PIP will soon not exist in Scotland, is unknown. The number of people impacted could be significant. The Scottish Government could mitigate this impact through its own social security top up powers but, as with the recently announced mitigation of the two-child limit in UC, would need to be able to find the money to do so from within its own budget.

But distributional analysis shows significant numbers of people will be worse off

Alongside the Spring Statement documents, the UK Government also update their distributional analysis (the differential impact of policies on poorer, middle, and higher income households). The impact of the Spring Statement, the policies from the Spring Statement are added to the policies from the Autumn Statement, making it difficult to isolate the impact of the Spring Statement, although the regressive nature of the welfare measures is clear to see: those in the lower half of the income distribution are facing most of the cuts.

Separately, the UK Government has produced a statement on the impact of the health and disability reforms.

This makes for sobering reading. The impact of changes to the eligibility for PIP will affect 800,000 people who will no longer be eligible for the Daily Living component. They note a further 150,000 people will not receive Carer’s Allowance of the UC Carer element as a result. These numbers are for England and Wales only given that disability benefits are devolved.

These results, on their own, will increase the number of working age people in poverty by 250,000 and 50,000 children. The UK Government are careful to say that these estimates do not account for any employment impact of those who lose benefits subsequently moving into work, and we will need to wait for the OBR to judge on the strength of these employment effects to understand the potential for offsetting of these numbers.

The reduction and or freezing of the UC health element will affect Scottish claimants as well as those in England and Wales. 2.25 million people who are current claimants will be affected by the freeze and 730,000 new claimants will receive the new lower rate and freeze. A further 50,000 working age people will be in poverty as a result of these changes.

There is as yet no analysis of the impact of the abolition of the Work Capability Assessment in UC, and the only impact that is shown is the reversal of a 2023 change to the descriptors in the Work Capability Assessment, which will not apply given the decision to abolish it.

We’ll have to wait until the OBR has been able to look at the whole policy package in aggregate before we understand the full scale of the impact both on the UK and Scotland. But it is clear from what we know so far that this is a package of measures that will raise poverty across the UK.

How does departmental spending look in historical context?

In October, the Chancellor announced significant increases in departmental spending. But we and others also noticed how frontloaded some of those announcements were.

This has been made even more so by the changes at this forecast to the latter years of the projections. Day-to-day departmental spending per person is now forecast to grow by a strong 3.4% in real terms in 2025-26, slowing to 1.5% in 2026-27 and remaining at 0.6% a year for the rest of the decade.

We’ll leave others to decide on words to characterise this path of spending. We’ll instead note that this leaves spending per person only 8% higher than it was in 2007-08. And as a share of national income – a better measure of affordability and of the Government’s prioritisation of the country’s resources – there is a slight increase in spending in the short-term. But day-to-day departmental spending then falls back by 0.4 percentage points by the end of the decade relative to its peak of 16.1 per cent of GDP in 2025-26 and 2026-27.

Chart: Resource departmental spending per person in real terms and as a share of GDP since 2007-08

Source: OBR, FAI analysis

A Budget to ‘fix the foundations’ and deliver change for Scotland?

Chancellor ‘takes long-term decisions to restore stability, rebuild Britain and protect working people across Scotland’

No change to working people’s payslips as employee national insurance and VAT stay the same, but businesses and the wealthiest asked to pay their fair share.
Record £47.7 billion for the Scottish Government in 2025/26 includes £3.4 billion through the Barnett formula.
Funding for Green Freeports, City and Growth Deals, GB Energy and hydrogen projects to fire up growth and deliver good jobs across Scotland.

The Chancellor has ‘delivered a Budget to fix the foundations to deliver on the promise of change after a decade and a half of stagnation’. She set out plans to rebuild Britain, while ensuring working people across Scotland don’t face higher taxes in their payslips.

The UK Government was handed a challenging inheritance; £22 billion of unfunded in-year spending pressures, debt at its highest since the 1960s, an unrealistic forecast for departmental spending, and stagnating living standards.

This Budget takes ‘difficult decisions’ to restore economic and fiscal stability, so that the UK Government can invest in Scotland’s future and lay the foundations for economic growth across the UK as its number one mission.

The Chancellor announced that the Scottish Government will be provided with a £47.7 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes a £3.4 billion top-up through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.

Secretary of State for Scotland Ian Murray said: “This is a historic budget for Scotland that chooses investment over decline and delivers on the promise that there would be no return to austerity.

“It is the largest budget settlement for the Scottish Government in the history of devolution, including an additional £1.5 billion this financial year and an additional £3.4 billion next year through the Barnett formula. That money must reach frontline services, to bring down NHS waiting lists and lift attainment in our schools.

“It will also bring a new era of growth for Scotland and the whole UK, confirming nearly £890 million of direct investment into Freeports, Investment Zones, the Argyll and Bute Growth Deal, and other important local projects across Scotland’s communities, as well as £125 million next year for GB Energy and support for green hydrogen projects in Cromarty and Whitelee.

“The increase in the minimum wage will also mean a pay rise for hundreds of thousands of workers in Scotland, with the biggest increase for young workers ever. This is on top of our employment rights bill which will deliver the biggest upgrade in workers’ rights in a generation. The triple lock means an increase in the state pension by £470 next year, on top of £900 this year for a million Scottish pensioners.

“The budget protects working people in Scotland, delivers more money than ever before for Scottish public services and means an end to the era of austerity.”

Protecting working people and living standards

While fixing the inheritance requires tough decisions, the Chancellor has committed to protecting the living standards of working people. The decisions taken by the Chancellor to rebuild public finances enable the UK Government to deliver on its pledge to not increase National Insurance or VAT on working people in Scotland, meaning they will not see higher taxes in their payslip.

The National Living Wage will increase from £11.44 to £12.21 an hour from April 2025. The 6.7% increase – worth £1,400 a year for a full-time worker – is a significant move towards delivering a genuine living wage.
The National Minimum Wage for 18 to 20-year-olds will also see a record rise from £8.60 to £10 an hour.
Working people will benefit from these increases, with there estimated to be over 100,000 minimum wage workers in Scotland in 2023.
The Chancellor has made the decision to protect working people in Scotland from being dragged into higher tax brackets by confirming that the freeze on National Insurance Contributions thresholds will be lifted from 2028-29 onwards, rising in line with inflation so they can keep more of their hard-earned wages.
The Chancellor is also protecting motorists by freezing fuel duty for one year – a tax cut worth £3 billion, with the temporary 5p cut extended to 22 March 2026. This will benefit an estimated 3.2 million people in Scotland, saving the average car driver £59, vans £126 and Heavy Goods Vehicles £1,079 next year.
To support Scottish pubs and smaller brewers in Scotland, the UK Government is cutting duty on qualifying draught products by 1p, which represent approximately 3 in 5 alcoholic drinks sold in pubs. This measure reduces duty bills by over £70 million a year, cutting duty on an average strength pint in a pub by a penny. The relief available to small producers will be updated to help smaller brewers and cidermakers.
Over 1 million Scottish pensioners will benefit from a 4.1% increase to their new or basic State Pension in April 2025. This is an additional £470 a year for those on the new State Pension and an additional £360 a year for those on the basic State Pension.
Households eligible for Pension Credit will get £465 a year more for single pensioners and up to £710 a year more for couples due to a 4.1% increase in the Pension Credit Standard Minimum Guarantee, benefitting 125,000 pensioners in Scotland.
Around 1.7 million families in Scotland will see their working-age benefits uprated in line with inflation – a £150 gain on average in 2025-26.
Reducing the maximum level of debt repayments that can be deducted from a household’s Universal Credit payment each month from 25% to 15% will benefit a Scottish family by over £420 a year on average.

Rebuilding Britain

This UK Government will not make a return to austerity and will instead boost investment to rebuild Britain and lay the foundations for growth in Scotland. This includes £130 million of targeted funding for the Scottish Government, of which £120 million is in capital investment.

The Budget delivers on the first step to establish Great British Energy by providing £125 million next year to set up the institution at its new home in Aberdeen – helping to develop new clean energy projects in Scotland and across the UK.
The UK Government will deliver £122 million for City and Growth Deals, including the continuation of its contribution to the Argyll and Bute Growth Deal which delivers £25 million of investment in the region over 10 years. This Deal will be supported by a rigorous value for money assessment as part of the review of the business cases for projects within it, to ensure best value is being delivered.
The Budget gives certainty to local leaders and investors, confirming funding for the Investment Zones and Freeports programmes across the UK – including Scotland’s Green Freeports.
The Chancellor committed the UK Government to working closely with the Scottish Government on the Industrial Strategy, 10-year infrastructure strategy and the National Wealth Fund – to ensure the benefits of these are felt UK-wide and as part of the relationship reset between governments. These will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries.
To support economic growth and promote Scottish culture, products and services through diplomatic and trade networks, the UK Government is allocating £750,000 for the Scotland Office in 2025/26 to champion Brand Scotland as was committed in the manifesto.
We are supporting Scotland’s world-renowned Scotch Whisky industry by providing up to £5 million for HMRC to reduce the fees charged by the Spirit Drinks Verification Scheme and by ending mandatory duty stamps for spirits on 1 May 2025.
Two electrolytic hydrogen projects in Scotland have been selected for UK Government revenue support through the first Hydrogen Allocation Round: Cromarty Green Hydrogen Project and Whitelee Green Hydrogen. Both projects will bring in significant international investment and create good quality, local jobs.
An extension of the Innovation Accelerators programme will support the high-potential innovation cluster in the Glasgow City Region.
A corporate tax roadmap will provide businesses with the stability and certainty they need to make long-term investment decisions and support our growth mission. It confirms our competitive offer, with the lowest Corporate Tax rate in the G7 and generous support for investment and innovation.
The UK Government will also proceed with implementing the 45%/40% rates of the theatre, orchestra, museum and galleries tax relief from 1 April 2025 to provide certainty to businesses in Scotland’s thriving cultural sector.

Repairing public finances

The Chancellor has made clear that, whilst protecting working people with measures to reduce the cost of living, there would be difficult decisions required. The Budget will ask businesses and the wealthiest to pay their fair share while making taxes fairer. This will go directly towards fixing the foundations of the UK economy.

The rate of Employers’ National Insurance will increase by 1.2 percentage points, to 15%. The Secondary Threshold – the level at which employers start paying national insurance on each employee’s salary – will reduce from £9,100 per year to £5,000 per year.
The smallest businesses will be protected as the Employment Allowance will increase to £10,500 from £5,000, allowing Scottish firms to employ four National Living Wage workers full time without paying employer national insurance on their wages.
Capital Gains Tax will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate.
To encourage entrepreneurs to invest in their businesses Business Asset Disposal Relief (BADR) will remain at 10% this year, before rising to 14% on 6 April 2025 and 18% from 6 April 2026-27.
The lifetime limit of BADR will be maintained at £1 million. The lifetime limit of Investors’ Relief will be reduced from £10 million to £1 million.
The OBR say changes to CGT raise over £2.5 billion a year and the UK will continue to have the lowest CGT rate of any European G7 country.
Inheritance Tax thresholds will be fixed at their current levels for a further two years until April 2030. More than 90% of estates each year will be outside of its scope. From April 2027 inherited pensions will be subject to Inheritance Tax. This removes a distortion which has led to pensions being used as a tax planning vehicle to transfer wealth rather than their original purpose to fund retirement.
From April 2026, agricultural property relief and business property relief will be reformed. The highest rate of relief will continue at 100% for the first £1 million of combined business and agricultural assets, fully protecting the majority of businesses and farms. It will reduce to 50% after the first £1 million. Reforms will affect the wealthiest 2,000 estates each year. Inheritance Tax reforms in total are predicted by the OBR to raise £2 billion to support stability.
From 2026-27 Air Passenger Duty (APD) for short and long-haul flights will increase by 13% to the nearest pound, a partial adjustment to account for previous high inflation. For economy passengers, this means a maximum £2 extra per short haul flight and tickets for children under the age of 16 remain exempt from APD. APD for larger private jets will be increased by a further 50%. Passengers carried on flights leaving from airports in the Scottish Highlands and Islands region are exempt from APD.
The rate of the Energy Profits Levy will increase to 38% from 1 November 2024 and the levy will now expire one year later than planned, on 31 March 2030. The 29% investment allowance will be removed.
To provide long-term certainty and to support a stable energy transition, the UK Government will make no additional changes to tax relief available within the EPL and a consultation will be published in early 2025 on a successor regime that can respond to price shocks. Money raised from changes to the EPL will support the transition to clean energy, enhance energy security and provide sustainable jobs for the future.

The Budget also announced a package of measures that disincentivise activities that cause ill health, by:

Renewing the tobacco duty escalator which increases all tobacco duty rates by RPI+2% plus an above escalator increase to hand rolling tobacco (totalling RPI+12%). 
Introducing a new vaping duty at a flat rate of 22p/ml from October 2026, accompanied by a further one-off increase in tobacco duty to maintain financial incentive to choose vaping over smoking.
To help tackle obesity and other harms caused by high sugar intake, the Soft Drinks Industry Levy will increase to account for inflation since it was last updated in 2018, and the duty will rise in line with inflation every year going forward.
The UK Government will also uprate alcohol duty in line with RPI on 1 February 2025, except for most drinks in pubs.

The UK Government has set out the next steps to deliver its tax manifesto commitments in the July Statement. Having consulted on the final policy details where appropriate, this Budget delivers the UK Government’s manifesto commitments to raise revenue to pay for First Steps, with reforms that are underpinned by fairness, and tackle tax avoidance by:

A new residence-based regime will replace the current non-dom regime from April 2025 and will be designed to attract investment and talent to the UK.
Offshore trusts will no longer be able to be used to shelter assets from Inheritance Tax, and there will be transitional arrangement in place for people who have made plans based on current rules.
The planned 50% reduction for foreign income in the first year of the new regime will be removed.
Reforms to the non-dom regime will raise a total of £12.7 billion according to the OBR.
The tax treatment of carried interest will be reformed by first increasing the Capital Gains Tax rates on carried interest to 32% and then, from April 2026, moving to a revised regime – with bespoke rules to reflect the characteristics of the reward.

The Chancellor also ‘doubled down’ on fiscal responsibility through two new fiscal rules that put the public finances on a sustainable path and prioritise investment to support long-term growth, and new principles of stability. Spending Reviews will be held every two years, setting plans for at least three years to ensure public services are always planned and improve value for money.

One major fiscal event per year will give families and businesses stability and certainty on tax and spending changes, while giving the Scottish Government greater clarity for in its own budget-setting. A Fiscal Lock will also ensure no future government can sideline the OBR again.

Budget marks ‘step in right direction’

Scotland’s Finance Secretary responds to Budget

Finance Secretary Shona Robison has welcomed additional funding in the Autumn Budget, but said the Scottish Government will still face “enormous cost pressures” despite the measures.

The Finance Secretary said: “We called for increased investment in public services, infrastructure and tackling poverty. This budget is a step in the right direction, but still leaves us facing enormous cost pressures going forwards. The additional funding for this financial year has already been factored into our spending plans.

“By changing her fiscal rules and increasing investment in infrastructure, the Chancellor has met a core ask of the Scottish Government. But after 14 years of austerity, it’s going to take more than one year to rebuild and recover – we will need to see continued investment over the coming years to reset and reform public services.

“Indeed, there is a risk that by providing more funding for public services while increasing employer national insurance contributions, the UK Government is giving with one hand while taking away with the other.

“We estimate that the employer national insurance change could add up to £500 million in costs for the public sector unless it is fully reimbursed – and there is a danger that we won’t get that certainty until after the Scottish budget process for 2025/26 has concluded.

“With the lingering effects of the cost of living crisis still hitting family finances, it is disappointing that there was no mention of abolishing the two-child limit, which evidence shows would be one of the most cost-effective ways to reduce child poverty. Neither was there mention of funding for the Winter Fuel Payment.

“As ever, the devil is in the detail, and we will now take the time to assess the full implications of today’s statement. I will be announcing further details as part of the Scottish Budget on 4 December.”

Child Poverty Action Group: Chancellor misses golden chance to scrap two child limit

16 000 more children will now be pulled into poverty by time new UK child poverty taskforce reports in spring
“Good news on universal credit deductions, but no bold action on child poverty”
Barnett consequentials must now be prioritised to fund action on child poverty in Scotland

Responding to the UK Chancellor’s Budget, John Dickie, Director of the Child Poverty Action Group (CPAG) in Scotland, said; “The Chancellor brought good news on universal credit deductions, but this was not a Budget of bold action on child poverty. She missed a golden chance to scrap the two-child limit, a policy that will pull 16,000 extra children into poverty by the time the government’s child poverty taskforce reports in spring.

We welcome the new UK government’s ambition on child poverty but this budget played for time, time that children and families can’t afford. The UK spending review next spring will have to deliver much more to make a significant difference for children in poverty.”

Mr Dickie continued: “Here in Scotland and looking ahead to the Scottish budget it is vital that wider Barnett consequentials are now used to fund the action needed to deliver on the First Minister’s number one priority of ending child poverty.

“That must include funding a real terms increase to the Scottish child payment, expanding childcare provision, delivering on free school meal promises and increasing the supply of affordable family housing.”

POVERTY ALLIANCE:

Responding to today’s UK Budget, Poverty Alliance chief executive Peter Kelly said: “People across the UK believe in a nation based on justice and compassion. Today’s Budget was an opportunity for the Chancellor to turn those values into action, and to rebuild trust in government. Despite some welcome changes, there is still some way to go.

“Boosting the minimum wage is welcome, because for decades workers have been getting less and less from our growing economy. This increase will go some way to making up the gap, particularly for younger workers. But we need to remember that today’s Budget will still leave the legal minimum wages far lower than the real Living Wage rate – the only wage rate that is solely based on the cost of living – of £12.60 per hour, or £13.85 per hour in London.

“We know that too many people on Universal Credit find themselves pushed into destitution when they are chased for debt by public bodies, so it’s good that the maximum amount of benefit that can be taken from them has been reduced. But the Chancellor could have gone further, by strengthening our social security with a boost to Universal Credit that would guarantee that households can afford life’s essentials.

“She could have made it clear that every child matters, by scrapping the unjust and ineffective two-child limit, and ditching the unfair benefit cap which stops households getting all the support they are entitled to.

“There was a welcome focus on the importance of our public services to our shared prosperity and wellbeing. But the Chancellor could have done more to use our country’s wealth to tackle poverty and invest in a better society. Even with today’s changes, people who earn money from selling shares and business assets will pay Capital Gains Tax at a lower rate than workers pay in Income Tax. That’s just wrong.

“Freezing fuel duty and keeping the previous cuts in place will cost the Exchequer billions of pounds a year. It’s bad value for money, benefits the wealthiest in society most, and does little to make the transition to the green economy. The money would have been better invested in affordable, accessible, and sustainable public transport for all.

“It’s right that big companies pay their fair share towards building a strong society, but the Chancellor must urgently consider how increases to employer National Insurance will hit charities and community groups.

“The support and advice provided by these organisations is vital for people who have been pushed into poverty, but too many are already struggling through a lack of fair funding, and this NI increase could push many over the edge.

“That would be a disaster for our communities, and leave more low-income households facing destitution and despair.”

TUC: Labour’s investment budget has begun process of “repairing and rebuilding Britain”

Union body says budget is a vital first step towards the growth, jobs and living standards working people desperately need

Commenting on Wednesday’s budget statement from the Chancellor Rachel Reeves, TUC General Secretary Paul Nowak said: “The Chancellor was dealt a terrible hand by the last Conservative government – a toxic legacy of economic chaos, falling living standards and broken public services.

“But with today’s budget the Chancellor has acted decisively to deliver an economy that works for working people.

“The government’s investment plans are a vital first step towards repairing and rebuilding Britain – securing the stronger growth, higher wages and decent public services that the country desperately needs.

“Tax rises will ensure much-needed funds for our NHS, schools and the rest of our crumbling public services, with those who have the broadest shoulders paying a fairer share. The Chancellor was right to prioritise hospitals and classrooms over private jets.

“There is still a lot more work to do to clean up 14 years of Tory mess and economic decline. – including better supporting and strengthening our social security system. But this budget sets us on an urgently needed path towards national renewal.”

Shelter Scotland has responded to the UK budget set out this afternoon by Chancellor Rachel Reeves.

The housing and homelessness charity urged the Scottish Government to commit to investing any new capital funding into delivering the social homes needed to end the housing emergency.

However, it also expressed disappointment at the continuation of the two-child limit and ongoing freeze to Local Housing Allowance.

Shelter Scotland Director, Alison Watson, said: “Having declared a housing emergency it’s clear that the Scottish Government must back words with actions.

“It is vital that any capital funding which becomes available as a result of the Chancellor’s investment plans is in turn used by Scottish Ministers to deliver social homes here, but we also need to see growth in the capital budget over a sustained period to support continued investment.

“Delivering more social homes remains the single most effective way to tackle the housing emergency in Scotland, and only the Scottish Government can decide how much of its budget it commits to that endeavour.

“However, we can’t ignore the role that austerity has played in exacerbating Scotland’s housing emergency.

“The freeze on local housing allowance and the two-child limit has forced thousands into poverty; they will continue to do so as it seems the Chancellor has chosen to keep them in place.”

COSLA:

ONE PARENT FAMILIES SCOTLAND:

Scotch Whisky industry says UK government has broken commitment to ‘back Scotch producers to the hilt’

Chancellor increases discrimination of Scotch Whisky and other spirits in on-trade

The Scotch Whisky Association (SWA) says the Chancellor’s decision to further increase duty on Scotch Whisky has broken the Prime Minister’s commitment to ‘back Scotch producers to the hilt.’

In her first Budget, Chancellor Rachel Reeves announced an RPI inflation increase to alcohol duty, but cut duty on draught products in the on-trade by 1.7%. Scotch Whisky and other spirits are excluded from this tax relief.

The SWA had called on the new Chancellor to take the opportunity to reverse the damage done by the 10.1% increase in August 2023. Instead, the damage done to the industry and to government revenue has been compounded by further increasing the tax burden on the sector, which is already the highest in the G7.

Spirits revenue fell by hundreds of millions of pounds as a result of the 10.1% duty increase last year, and the industry has warned that this further tax hike will not deliver the revenue ministers have been promised but will hurt businesses, the hospitality sector and hard-pressed consumers.

Commenting on the Budget, Chief Executive of the SWA Mark Kent said: “This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.

“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose. It will damage the Scotch Whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.

“She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70% of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.

“The disastrous 10.1% duty hike last year has now been compounded. This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.

“We urge all MPs who support Scotch Whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”

Rain Newton-Smith, CBI Chief Executive, said: “The Chancellor had difficult choices to make to deliver stability for the economy and public finances. A more balanced approach to our fiscal rules which prioritises capital investment should help to unlock private sector investment in our infrastructure and net zero transition over the long-term.

“This is a tough Budget for business. While the Corporation Tax Roadmap will help create much needed stability, the hike in National Insurance Contributions alongside other increases to the employer cost base will increase the burden on business and hit the ability to invest and ultimately make it more expensive to hire people or give pay rises.

“Only the private sector can provide the scale of investment required to deliver the government’s growth agenda.

“To achieve this shared mission of growing our economy sustainably, it’s vital that the government doubles down on its partnership with business to unlock the investment that is needed to drive opportunity around the UK.”

FSB: Employment allowance rise welcome from Chancellor in tax-raising Budget

The Federation of Small Businesses responds to the Chancellor’s Budget statement

Responding to the Chancellor’s Budget statement, Policy Chair of the Federation of Small Businesses (FSB), Tina McKenzie, said: “Increasing the employment allowance for small businesses by a record amount is a very welcome move and we’re pleased the Chancellor has heard us loud and clear.

“More than doubling it, from £5,000 to £10,500, will shield the smallest employers from the jobs tax, therefore is a pro-jobs prioritisation in a tough Budget.

“The decision to protect small businesses from an inflationary hike in business rates – by freezing the small business multiplier – will help small firms with premises across all sectors. Meanwhile, extending business rates relief, albeit at a lower level, for small firms in retail, hospitality and leisure will mitigate a potential cliff-edge tax hike for those in some of the toughest sectors.

“The true test of today’s Budget will be whether small businesses can grow and end the economic stagnation the UK has been stuck in.

“Larger small, and medium-sized, businesses will struggle with the rises on employer national insurance on top of the large costs from the Government’s employment law plans. We’ve been very clear in our warning of the difficulty SMEs will be confronted with in meeting all of these changes at once – and the potential impact on jobs, wages and prices.

“The Budget documents include plans for a small business strategy command paper, which is a welcome signal that ministers appreciate the central role that small businesses play in driving growth and we look forward to working with the Government closely on that.

“Investment in infrastructure is key to future growth, and the Chancellor’s announcement of additional funding for rail projects and fixing potholes is therefore encouraging. Many small firms, meanwhile, will be relieved at the decision not to raise fuel duty. The commitment to prioritise small housebuilders when it comes to housing investment is also welcome.

“Building a business involves a significant element of risk and personal, as well as financial, investment. But for the economy to grow, we need more people to be incentivised to take that leap and, in turn, create jobs, opportunities and prosperity in all communities across the country.

“The right decision has been taken to retain entrepreneurs’ relief (now branded Business Asset Disposal Relief) up to £1million, which is something we have campaigned hard for. Although the level of relief will gradually reduce over time, resulting in more tax being paid in the future on business sales, we’re pleased to see a differential has been kept.

“Against a challenging backdrop, today’s Budget shows a clear direction in business policy now for the whole of this Parliament to target support at small businesses, rather than big corporates – prioritising everyday entrepreneurs working in local communities in all parts of the country.”

UK Budget fails “3 Key Tests for Scotland”, say Alba Party

Scottish Government must now fund universal entitlement to pensioners winter fuel payment

“To gain pass marks the new UK Labour Government had three key tests to meet in Scotland: it had to reverse its plan to cut the universal winter fuel payment; it had to save Grangemouth; and it had to fund a plan to save North Sea Oil and Gas jobs – on all three counts Labour has failed Scotland.”

This was said today by Acting Alba Party leader Kenny MacAskill reacting to Chancellor Rachel Reeves’ budget.

Alba Party say that the UK Government had three key tests to meet to deliver for Scotland. Former First Minister Alex Salmond helped launch a campaign to save the winter fuel payment last month.

Close to one million pensioners in Scotland are set to lose out on between £200-£300 this winter. Acting Alba Party leader Kenny MacAskill has been a leading voice in the campaign to save the Grangemouth Oil Refinery from closure.

Mr MacAskill has today hit out at the UK Government after Labour promised in the General Election to save Scotland’s only refinery that is set for closure next year but has failed to provide funding to save the refinery in today’s budget.

MacAskill has now called on the Scottish Government to use extra Barnett consequential funding to fully mitigate the cut to the winter fuel payment.

Alba Party have also hit out as successive UK Government’s have promised investment in Carbon Capture Technology in the North East of Scotland. Alba say the technology is vital to secure the future of the North Sea Oil and Gas industry and to help Scotland play its part in protecting the environment. Today’s UK Budget confirmed £22billion of investment in carbon capture projects in England – but snubbed the Acorn project on the Buchan coast.

Commenting Acting Alba Party leader Kenny MacAskill said: ““Today’s UK Budget is a continuity budget that proves that regardless of whether we have a UK Tory Government or a UK Labour Government, Scotland will always lose.

“ Close to a million Scottish pensioners are to be kept in the cold this winter, the UK Government has chosen to stand by and allow Scotland’s key industrial asset to close, and Labour have betrayed the North East of Scotland.

“ Nothing for Scotland’s pensioners, nothing for Grangemouth and nothing for Carbon Capture and the North Sea. It is now vital that the Scottish Government steps up to the plate and uses any additional funding consequentials it receives to fully mitigate the cut to the winter fuel payment.”

Budget is a ‘Missed Opportunity’

The budget is a missed opportunity to bring about the transformative change this country needs, said Westminster’s group of independent MPs.

A statement from the Independent Alliance:

LOCAL GOVERNMENT INFORMATION UNIT:

Dr Jonathan Carr-West, Chief Executive, LGIU, said: “The Chancellor billed this as an historically consequential budget of hard choices. That’s certainly true in many areas with £40bn of tax rises announced and significant changes to the government’s debt rules.

“For local government, however, it is a budget of choices deferred. It could have been worse – there’s an additional £1.3bn in funding including money for social care and additional funding for housing and special educational needs: the very areas that are driving many councils to bankruptcy.

“But this extra funding is not even half the gap that councils currently face.

“The longer-tem change that the sector desperately needs is all deferred for now. We are waiting on the Local Government Finance Settlement, on the Devolution White Paper and on a broader redistribution of funding through a multi-year settlement from 2026-27.

“There were some welcome highlights: retaining 100% of right to buy receipts and integrated settlements for Greater Manchester and the West Midlands and possibly for other places in future.

“Is this a start? Yes. Is it enough? Not by a long shot. At least not yet. There’s a positive direction of travel set out, but there’s a long way to go and the pressure on council finances means there’s a real risk that some councils will not be able to hang on long enough to get there.”

Why scrapping the household benefit cap is vital for families, children and survivors of abuse

CHILD POVERTY ACTION GROUP BRIEFING

123,0000 households are affected by the household benefit cap. The vast majority – 71 per cent – are lone parents with children.

The benefit cap limits the total amount a part-time, low-earning or out-of-work household can receive in benefits, trapping families in deep poverty. It is having a disproportionate impact on survivors of domestic abuse and on children, as this new briefing with Shelter and Women’s Aid shows.

The benefit cap makes it almost impossible to afford private rents. Recent research found that there were only enough affordable homes across the country to house one in six capped families. Increasingly even social rents (typically 30 per cent of market rents) are becoming unaffordable. In 78 local authority areas in England, average council and/or housing association rents are unaffordable for capped families.

The benefit cap is therefore contributing to homelessness, as families are trapped in refuges and other forms of temporary accommodation and are unable to move on to secure and affordable homes.

The cap is not effective and it is harming those who are already vulnerable. We are calling for the cap to be scrapped.

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