Post-Budget briefing

Prior to today’s Budget we surveyed parents about the cost of living and found only 28 per cent thought the government was doing well at supporting families like theirs with rising costs. The measures announced today are welcome but are nowhere near enough to meet the scale of the challenge faced by the families we work with, and will leave many families with children feeling overwhelmed and overlooked.   

Cost of living 

While energy prices are clearly a key concern for households, the £100 household energy payment announced today presents a number of issues for families on low incomes. First, it is inadequate to meet the pressures they are facing – especially after years of price increases that have played a part in eroding any previous financial resilience. Second, the £100 household energy payment does not account for family size – meaning a family of five receives the same support as a single person household despite facing higher energy costs. Support for families during Covid and previous cost of living payments have consistently failed to reflect the reality that families with children have higher costs, and it is disappointing not to see this issue rectified. Three, support is spread too thinly and not well targeted towards families on the lowest incomes. In the case of the household energy payment, council tax bands are not a good proxy for determining which families face the highest proportional costs. Bands were set in 1991 and there is large variation of household types within them. The government already has a good understanding of families’ financial circumstances through the social security system, and should use this knowledge, as it does for the warm home discount, to reach families in most need. 

Changes to gas standing charges, and in time electricity standing charges, could be beneficial to low-income families. It will be important to scrutinise the detail of mitigations for families that need to spend more, for example those with young children or disabled members that require additional heating.

Aside from this there are few measures to directly support struggling families. Changing tariffs on certain food products is again an untargeted measure, which while accounting for family size will not make a significant difference to household budgets. Directing funding through the social security system would have done more to support families struggling to meet their food costs.

Temporary accommodation 

We welcome the Chancellor’s reference to the unacceptably high number of children living in temporary accommodation. It is vital that there is more urgent support to translate the PM’s and Chancellor’s commitment on this issue into action to help families with children who live in temporary accommodation. The benefit cap traps families in insecure accommodation and the local housing allowance rate makes it very challenging for families to live in a decent home. 

Carer’s allowance 

The introduction of a taper on excess earnings for carer’s allowance is very welcome, giving carers greater flexibility and security to work without fear of losing out financially. This has been a longstanding injustice for carers and many have faced massive overpayment debts due to this unfair policy and maladministration. However, the pace of implementation which delays changes until 2030-31 risks perpetuating stress and hardship for thousands of hardworking carers. 

Social security reform and child poverty

The Chancellor promised that there would be no crude cuts to social security. The government’s own child poverty strategy, published less than a year ago, identified that austerity social security cuts were a key driver of the high levels of child poverty in the UK. There are still 3.7 million children in the UK living in poverty. If child poverty is to reduce further in this parliament and beyond, not only is it vital that there are not cuts to support for family incomes, but there must be a continued effort to reverse the damage caused by the lack of support for families by investing in our social security system.