UK Spending Review 2025: A Step Forward, but Gaps Remain for Low-Income Communities

Photo by Norbert Levajsics on Unsplash

The UK government’s 2025 Spending Review outlines significant investments aimed at addressing pressing societal issues. There are many welcomed steps being put forward in this review but while initiatives like expanding free school meals, increasing social housing, and enhancing winter fuel payments are commendable, critical gaps persist, particularly in support for low-income communities. 

🌟Positive Developments 

Expansion of Free School Meals 

The extension of free school meals to all children in families receiving Universal Credit is a welcome move. This policy aims to alleviate food insecurity and support children’s learning and well-being. However, current eligibility criteria exclude many children in poverty, an estimated 900,000 children living in poverty are not eligible due to stringent income thresholds. While this is a very positive step if the government is serious about addressing the 4.5 million children in the UK who are growing up in poverty, things like scrapping the two-child limit would lift 35,000 children out of poverty overnight and continue to lift more out of poverty going forward. 

Investment in Affordable Housing 

The government’s commitment to invest £39 billion in social and affordable housing is a significant step toward addressing the housing crisis. This funding aims to support the construction of 1.5 million new homes by 2029.  

At Toynbee Hall, more than half of the clients we assist live in social housing, often in overcrowded or unsuitable conditions and struggling with rent arrears.  

This investment could provide stability for thousands facing insecure or unaffordable living conditions. By reducing housing costs, it can help prevent homelessness and ease financial pressure on low-income families. 

Enhanced Winter Fuel Payments 

The restoration of Winter Fuel Payments for pensioners is a positive development, providing financial relief during colder months. This measure aims to reduce fuel poverty and support vulnerable households. 

⚠️Areas of Concern 

Mental Health Services: A Missed Opportunity 

While the Spending Review allocates increased funding to the NHS, there is a pressing need to reform mental health services. Toynbee Hall’s “Emotional Support for Young People” research reveals that current services often fail to meet the needs of young people, particularly those from ethnic minority backgrounds. Many report waiting until they are at their lowest before accessing support, creating a harmful cycle. The government must invest in early, preventative, and culturally appropriate mental health services to address this gap. 

The £1 billion Crisis Fund 

The introduction of the £1 billion Crisis and Resilience Fund, replacing the Household Support Fund, is a positive step. This fund aims to assist low-income households facing short-term financial crises. 

This is positive but the success of this fund depends on how easy it is for people to access help. We’ve seen too often how “postcode lotteries” leave vulnerable families without support just because of where they live. We urge authorities to make access simple, transparent, and fair—because when people can’t get the support they need quickly, their debts spiral, and crises deepen. 

Toynbee’s Voice 

Our Director of Advice Services, Matt Dronfield appeared on LBC Radio this morning where he said

“There are some promising moves in this Spending Review — but the real test is whether it makes life better for the families we see every day, struggling with rent, food, and mental health. Promises only matter if they deliver real help, in the right place, at the right time”.

Echoing our thoughts here at Toynbee Hall that while there are positive steps being brought forward, the most important part is actually delivering on these promises. 

Conclusion 

The 2025 Spending Review presents a mixed picture. While there are commendable investments in areas like free school meals, affordable housing, and winter fuel payments, significant gaps remain, particularly in support for low-income communities. At Toynbee Hall, we advocate for policies that address these disparities and ensure that all individuals, regardless of income, have access to the support they need to thrive.