What this Budget must deliver for a stronger social safety net
By Katie Taylor, Director of Policy, Research & Communities
27 October 2026
As the Chancellor prepares to deliver the Budget, this is an opportunity to set out what it must deliver to build a fairer and more effective social safety net, drawing on the experiences and expertise of the people we work alongside at Toynbee Hall.
I feel incredibly fortunate to work directly alongside community peer researchers at Toynbee Hall, learning from their experiences, perspectives and expertise on the issues we are working together to address. In particular, working alongside our group of Disabled peer researchers has given me invaluable insight into how the social security system works in practice, and the gap that too often exists between policy intentions and people’s lived realities.
At Toynbee Hall, we follow a rigorous participatory action research methodology, which puts people with direct experience of the issues we are seeking to address at the centre of the research and policy-development process, from shaping the questions and gathering evidence to developing recommendations for change. This is about more than listening to people’s experiences; it is about recognising their expertise and sharing power over the solutions.
As we approach the Budget, I wanted to bring together what we are hearing from the people we work alongside, the evidence emerging from our research and the experiences of our frontline services. The recommendations that follow include those developed by our Disabled peer researchers themselves, reflecting what they believe needs to change to build a fairer and more effective social safety net.
A new social contract must deliver lasting change
In his September Labour Party Conference Speech, Andy Burnham stated, “In 1945 we had the Beveridge Report. We need something similar now. A new social contract for the 21st century.”
Toynbee Hall was deeply involved in the development of the welfare state. Both William Beveridge, whose landmark report laid its foundations, and Clement Attlee, whose government implemented many of its recommendations, lived and worked at Toynbee Hall, where their experiences of poverty and inequality helped shape their thinking and subsequent reforms. Today, we still serve those who the social security system was set out to support through our welfare, debt and legal advice services and through our community work. Our services are a lifeline offering important support to 17,600 people in London and beyond in the last year.
This budget offers a vital opportunity to determine the depth and meaning of that social contract and evaluate how it could work to improve the lives of people across Britain. For the clients we serve, the cost-of-living crisis has not ended and the targeted support which the Chancellor has indicated may be included will bring relief to many who are unable to absorb economic shocks from events beyond their control, such as the US’ war with Iran. Reports citing government officials suggest that additional support through the Warm Home Discount and other short-term measures is under consideration. These will be welcome initiatives.
- What this Budget must deliver: Provide targeted support to protect low-income households from rising living costs and economic shocks, including through the Warm Home Discount.
Beyond short-term relief: rebuilding our safety net
However, a new social contract must go beyond providing temporary relief from economic shocks. It must involve long-term investment in repairing and strengthening our social safety net, tackling the structural causes of poverty and insecurity rather than simply responding to their consequences. A significant commitment from the Chancellor to increase council housebuilding would be a vital step in this direction, addressing one of the biggest drivers of poverty and financial insecurity while laying the foundations for a more secure and equitable future.
- What this Budget must deliver: Build on existing commitments by accelerating investment in council housebuilding, ensuring more genuinely affordable homes are delivered at scale.
Strengthening the safety net through investment in free, independent advice
Free, independent advice is a vital part of the social safety net, helping people resolve problems before they escalate into crisis. At Toynbee Hall, our advice services secured over £38.1 million in annual financial gains for clients, while 60% of debt advice clients surveyed said they could not have managed their problems without advice, and a further 15% said advice had prevented a serious decline in their mental health. Yet demand continues to outstrip capacity. AdviceUK’s 2026 research found that 63% of UK adults had experienced a problem that could require advice in the previous year, while nearly half (48%) of advice organisations surveyed had reduced their services. With an estimated 8.4 million people in the UK needing debt advice, the scale of unmet need underscores the importance of a properly resourced advice sector, capable of responding to growing demand and preventing financial difficulties from escalating into crisis.
- What this Budget must deliver: Secure, long-term funding for free, independent advice services and investment in the advice workforce to ensure people can access support before reaching crisis point.
Further disability benefit cuts would undermine progress
But for these types of positive investment to create good, the government cannot give with one hand and take away with the other. We are deeply concerned by potential changes to health and disability benefits which may be previewed in this budget. It has been reported that Ministers are considering scrapping Universal Credit Health Element and reducing or withdrawing Personal Independence Payments entitlements for under 25-year olds. While the government claims this approach would help young people by freeing up funding for much needed employment, education and health support, the reality is that pulling the financial rug out from under Disabled young people will create immense and immediate harms. Additionally, according to research on similar cuts in the past, taking away any sort of financial security they have will likely move them further away from the job market.
When the government established the Personal Independence Payment benefit, its stated aim was, “to contribute to the extra costs of overcoming the barriers faced by long-term disabled people to leading full and active lives.” However, our research shows that PIP is currently inadequate for many people to meet that objective, a fact which pushes Disabled people into poverty.
Toynbee Hall, Disability Rights UK, and the Commission on Social Security ran a survey over the summer which focused on whether PIP reflects the real costs and barriers Disabled people face, how people experience the assessment process and what changes are needed to make the system fairer, more accurate and more supportive. We found that only 16% of respondents stated the PIP covered all their additional costs. Just under a quarter (24%) said it covers very little or basically none of their additional costs. As one respondent noted “Being alive is beyond my budget.”
At Toynbee Hall, we’ve seen PIP’s inadequacy across our own thousands of debt and welfare advice clients. Among our client base, PIP is the second most commonly-claimed benefit with 3,082 clients receiving PIP in the last year. This group reported low income as the top reason for debt, with basic living expenses – council tax, rent and water—as the most common debt types and the average debt incurred reaching £16,100. This shows that being unable to afford the extra costs of disability has a tremendous knock-on effect on in other areas of your life. Similarly the Joseph Rowntree Foundation found that 50% of people receiving the health-related element of Universal Credit (LCWRA) are either unable to heat their home, behind on bills, or have low or very low food security.
The picture is no better for young people. The Institute for Fiscal Studies reported that young PIP recipients are disproportionately likely to have the most severe disabilities. Given that the Milburn Review interim report on young people and work identified social disadvantage as the driving factor for why so many young people are not in employment, education or training (NEET), it is illogical for the government to then amplify that social disadvantage by withdrawing vital financial entitlements.
The government is right to address the fundamental failings in education, healthcare and employment support that prevent young people, particularly young Disabled people, from accessing education and employment opportunities. However, putting the cart before the horse by removing vital financial support before effective alternatives are in place risks causing serious and lasting harm to thousands of young people. Reform must begin by removing the barriers they face, not by withdrawing the financial security they depend on.
What this Budget must deliver:
- Protect young people’s disability benefits from cuts based on arbitrary age thresholds.
- Retain a payment, exclusive of employment status, that begins to cover the costs Disabled people face as a result of living in an inaccessible society;
- Preserve the UC Health element and preserve the distinction between it (loss of earnings capacity) and PIP (extra costs of disability) to ensure both needs are properly met
- Ensure Disabled People’s Organisations are involved in making change to these systems.
