Rachel Reeves’s first budget emphasised raising taxes to help the NHS, as the health service tries to cope with huge waiting lists and an ageing population. Funding the NHS was a top priority but people in other sectors – from universities to social care – feel the budget was a missed opportunity to tackle impending crises or introduce desperately needed reforms in their areas.
Social care
Experts have long warned that it will be difficult to fix the NHS without addressing the crisis in social care, where councils in England and Wales are struggling with meagre budgets and staff shortages. Local authorities got a £600m injection of funding for social care, which the Local Government Association said would would help “meet some – but not all – of the significant pressures in adult and children’s social care and homelessness support”.
But there was nothing from the government on any wider reform of the system, which is likely to be needed in the longer term. The Health Foundation thinktank said: “While we welcome the additional £600m for social care and the reforms to carers allowance, the continued silence on wider social care reform is disappointing.”
The sector will also be hit hard by the government’s rise in employer national insurance contributions, with the Liberal Democrats calling for social care to be exempted from the increase.
Child poverty
One of the biggest asks from Labour MPs since taking office has been overturning the UK-wide two-child benefit limit, which contributes to child poverty. Reeves made no mention of any ambition to scrap it in her budget speech, despite privately wanting to make the change. Campaigners would have liked to see a larger Gordon Brown-style focus on lifting children out of poverty. Her speech barely made any mention of child poverty, apart from in a brief paragraph on the impact of reducing the level of overpayments that can be taken from universal credit. In its response to the budget, the SNP called for the Labour government to take “emergency action” to tackle child poverty, with the Resolution Foundation thinktank warning that an additional 63,000 children will be hit by the two-child benefit cap by April.
A letter to the Guardian from the former Labour leader and independent MP Jeremy Corbyn, along with the Green party co-leaders Adrian Ramsay and Carla Denyer, Plaid Cymru MPs and others called on Thursday for the government to do more lift the two-child benefit cap, reverse the winter fuel allowance withdrawal, introduce wealth taxes, and bring in a new green deal. “Labour is raising defence expenditure to 2.5% of GDP while telling us there is no money to lift 250,000 children out of poverty. This is a lie. There is plenty of money – it’s just in the wrong hands,” they said.
Mental health
Mental health charities operating in England and Wales were disappointed with the budget. Dr Sarah Hughes, the chief executive of Mind, said it had “not delivered the changes needed to help create a mentally healthier nation”. Although the budget outlined funding for mental health crisis centres, the charity had been pushing for more help to stop people reaching crisis point, pointing out that mental health accounts for 20% of all ill health but only gets 10% of NHS spend. The sector is also concerned about cuts to sickness benefit since rising costs have risen partly by worsening ill mental health. Details of potential changes to the benefits are yet to be set out.
Universities
Before the budget, there were widely briefed stories that the government planned to allow an increase in tuition fees or reform of the system in England. This did not materialise but implicit in the figures was that they would be permitted to rise with inflation from next year. That will be some relief to university chancellors but at the same time institutions will have to swallow higher bills for national insurance contributions. It appears that wider reforms will have to wait despite the sector being on “Sue’s shit list” – a purported risk register drawn up by the former chief of staff Sue Gray before the election highlighting possible crises in the first months of a Labour government. Universities are concerned about their funding situation, with inflation having run high and tuition fees frozen for so long, and there have long been warnings that individual institutions could go bankrupt.
Housing hardship
Some charities had been calling for local housing allowance across the UK – which sets housing benefit levels – to be unfrozen but the chancellor did not oblige. The Joseph Rowntree Foundation said private renters would “feel let down by the choice to keep local housing allowance frozen, and that means that it will become further out of step with local rent levels, which have soared in recent years”.
The Women’s Budget Group thinktank said: “Reintroducing the freeze on local housing allowance is deeply disappointing for the hundreds of thousands of families struggling in temporary housing or facing eviction. The cost of private renting has been increasing, eating up more and more of women’s incomes – with the gender housing affordability gap widening in the last year. The average rent for a one-bedroom property in England is now taking up 47% of a woman’s median earnings, up from 36% last year, compared to 34% and 26% for men respectively.”
