UK Government Spending Review – opportunity missed to support families most at risk of poverty

Today (25 November 2020) the Chancellor Rishi Sunak delivered the Government’s Spending Review for the coming year. This included a significant £280 billion package to support the UK in its recovery from the Coronavirus pandemic, detail on public sector pay, NHS funding and money for the devolved administrations. It is important to note that many announcements in the Spending Review apply only to England.

Key points:

  • Approximately £900 million further allocated for Northern Ireland to boost Covid-19 recovery.
  • Across the UK, the National Living Wage will increase by 2.2% to £8.91 an hour, with this rate extended to those aged 23 and over, rather than 25 and over as is currently the case.
  • 1 million public sector workers in England who earn below the median wage of £24,000 will get a pay rise of at least £250 next year however other public sector workers in England (excluding some NHS staff) will have their pay frozen.

The Chancellor recognised that, despite the Government’s interventions to support businesses and individuals, the UK is still facing significant economic challenges and future job losses.

Unemployment is expected to peak at 2.6 million in the middle of 2021, with the UK’s “economic emergency” having only just begun according to the Chancellor. This will be a worrying time for many families, with growing numbers at risk of being swept into poverty. In that context, it is also deeply disappointing that the Chancellor did not use the Spending Review as an opportunity to announce an extension to the £20 Universal Credit uplift. Many families now face the uncertainty and anxiety of losing this lifeline at the March. We would call on the Government to commit to keeping this uplift, and extend it to legacy benefits.

Similarly, while childcare is a devolved matter, it is still frustrating that childcare was not specifically included in the Spending Review, as childcare will play a vital role in the UK wide economic and societal recovery from Covid-19. We believe this is a missed opportunity for the Government to show the value of the childcare sector and we know from our research with parents and childcare providers how important investment is to ensure childcare is affordable to access and sustainable to deliver.

£300 million support package announced for Northern Ireland

Earlier this week, Finance Minister Conor Murphy announced a £300 million support package, including money for businesses and funding to support the most vulnerable. In recognition of the immense challenges facing businesses and individuals measures include:

  • A High Street Voucher Scheme to encourage people to visit and spend at their local retailers in the new year
  • Money for company directors who have received no support to date
  • One off heating payments for those on higher rate disability benefits and older people in receipt of pension credit
  • Funding to guarantee the ongoing provision of Free School Meals through food grants during school holidays
  • Extensions to the charities and social enterprise support funds.

Looking ahead, the Minister also announced that further consideration will be given to support with business rates in the new year – including for childcare providers – while money has been allocated for the new year should an extension of support for the childcare sector be approved.

Further detail on how funds will be allocated in anticipated but, in the meantime, further information is available here.

We are here to help

If you are unsure what support you are entitled to contact our Family Benefits Advice Service on 028 9267 8200.