Contact us
News

Spring Budget: further cuts to public spending announced

Key items in the budget today

We bring you elements relevant to our sector announced in the Spring Budget today, Wednesday 26 March including:

  • Universal Credit freezes and what areas of public services the government will be focusing on that will impact our sector
  • The Chancellor’s statements of when more detail on welfare reform would be heard.

Said Surrey Care Association CEO, Nicola NcLeish: “As expected, this Budget prioritises cuts to public spending rather than providing the necessary financial support to struggling sectors of the economy. Unfortunately, it represents another missed opportunity for the government to properly fund vital services like social care, which are the foundation of our communities.”

The Chancellor Rachel Reeves set the scene within today’s Office for Budget Responsibility (OBR) growth estimate reducing to 1% from 2%.

Universal Credit Health cut by 50%

Significantly for our sector, implications for users of service support will be felt through the Chancellor also announcing today that Universal Credit Health will now be cut by 50% and frozen for any claimants who are new.

This is additional to welfare reforms announced by government last week on an overhaul of benefits and supporting people back into work, outlined in its Green paper Reforming Benefits and Support to Get Britain Working.

Further details on welfare reforms – June 2025

Today, the Chancellor also said that further details on these welfare reforms will be outlined in the Spending Review report to be delivered at the beginning of June.

Transformation Fund for public services does not include adult social care

The Chancellor announced a ‘Transformation Fund’ of £3.25 bn to assist public services but the focus of this was on AI tools, technology improvements for the Ministry of Justice and investments to support children in foster care.

Civil Service cuts

Predicted cuts to civil service and previously announced axing of NHSE was also detailed: ‘Driving forward vital reforms to ensure NHS productivity to improve patient care.’ With the Chancellor saying that these cuts would “significantly reduce the costs of running government” by 15%, or £2bn, by the end of the decade.’

Please make your voice heard

Said Nicola: “Now more than ever, as a sector we need to share evidence of what the decisions of the past months will mean to us as Surrey businesses in 2025.

Please take 5 minutes of your time to complete our anonymous finance survey so that we can share the aggregated data with decision makers in the Council, the NHS and with elected politicians and the Government.’

We will of course continue to keep our members updated and will be keenly awaiting more detail in the Spending Review announcements in June.