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Mind responds to Autumn Financial Statement

Thursday, 17 November 2022 Mind

The Chancellor of the Exchequer, Jeremy Hunt, has announced the UK government’s latest financial policies in an Autumn Statement, including the increase of benefits in line with inflation. Mind has been calling on the UK government to commit to this benefits uprating – and go beyond their commitments today – since previous government ministers suggested this may not happen.

The UK government also announced £3.3 billion in funding for the NHS each year over the next two years. Initial evaluations suggest this falls short of addressing the shortfall in NHS budgets caused by inflation, and may amount to a real-terms cut.

Other measures announced today included:

  • A review into the number of people out of work will be made by the Secretary of State for Work and Pensions.

  • The rollout of ‘Managed Migration’ of people from legacy benefits to Universal Credit has been delayed until 2028. 

  • The Energy Price Guarantee will continue for another 12 months, but increase from £2,500 to £3,000 on average.

  • There will be additional Cost of Living payments in next year fiscal year.

  • There will be £1 billion to further extend Household Support Fund over 2023-24.

  • An extra £2.3 billion for schools over the next two years – returning real-terms funding to 2010 levels.

Responding to the announcements, Sophie Corlett, Mind’s Interim CEO, said:

On increasing benefits in line with inflation:

“Today many of those on the lowest incomes will be breathing a sigh of relief, as the UK government confirms it will increase benefits in line with inflation. With food and energy prices having increased significantly, uprating benefits in line with inflation will, frankly, allow people to continue to survive. It’s good that common sense finally prevailed but concerning that not going forward with an inflation level increase was ever seriously considered. People on the lowest incomes should never have had to worry whether the UK government was going to support them through an economic crisis.

“The sad truth is that, despite this increase, millions of those on the lowest incomes will continue to struggle this winter, particularly as price rises have already occurred while this inflation level increase will not come into place until April. The UK government should seriously consider bringing forward this increase to as soon as possible.

“Even with this increase, benefit payment levels will remain fundamentally inadequate, just as they were even before the pandemic and rising costs. The UK government is currently providing the bare minimum of what is needed to support those on the lowest incomes. If the goal is an economically prosperous Britain, those on the lowest incomes need adequate financial support so that they can financially thrive.”

On other support for those on the lowest incomes:

“It is reassuring to see the continuation of cost-of-living payments in the new financial year, but people are already going without essentials and support payments need to fully cover rising costs. An announcement of permanent support that allows people to continue to afford the basics would be preferable to one-off payments for many, as we are frequently told by those on the lowest incomes it would provide them with some much-needed financial stability.

“It is also welcome that the UK government has given a near-inflation increase to the National Living Wage, but this nonetheless amounts to a real-terms cut to many peoples’ incomes. We remain concerned workers paid the minimum wage are not able to afford the essentials, as rates are still lower than the real Living Wage, particularly for young people who are paid at much lower rates.”

On a further delay to managed migration:

“We welcome the delay to the roll out of ‘managed migration’, the process the DWP is using to transfer people on ‘legacy benefits’ such as income related Employment and Support Allowance, Working Tax Credit and Jobseekers Allowance, across to the Universal Credit system. The decision made earlier this year to use people as guinea pigs for whether a system can potentially cause financial destitution was inhumane. We now need to see more work done to ensure that when the roll out does start again it does so with a guarantee that no-one's benefits are stopped until they have established a claim to Universal Credit.”

On a failure to announce additional funding for the mental health sector:

“While the intention to support the NHS with £3.3 billion each year over the next two years is welcome, because of inflation, the funding announcements today actually amount to a real-terms drop in funding for the NHS at the worst possible time. It’s important we get an explicit guarantee that funding will be used to bolster our mental health services, which are struggling immensely right now.

“What would have been ground-breaking today is for the Chancellor to stand up and make an explicit recognition that the cost-of-living crisis is impacting the mental health of millions of people across Britain right now, and that our mental health provision urgently needs investment. He knows this, having spent years working closely with the health sector.

“Now is not the time to be compromising on care. There are currently 1.8 million people on the waiting list for mental health services and another 8 million who could benefit from support but can't access it. The mental health sector didn't receive pandemic recovery money this year to tackle this backlog, and inflation means that while demand is going up, funding is going down. Despite the country facing a mental health crisis amidst the largest spike in living costs for generations, mental health services have been deprioritised – just as the nation needs them the most.

“It is not exaggeration to say our mental health system is on the brink of collapse, and the cost-of-living crisis has the potential to tip it over the edge. The Chancellor today needed to give mental health services not just the essential funding they need to function properly, but to go beyond that and prepare the mental health sector for a growth in people presenting with new and increasingly complex mental health issues.

“In light of this need, while we welcome the Chancellor’s announcement today of an independently verified workforce plan for the NHS, we are concerned this is unfunded. We would urge the Chancellor to back this with a multi-year funding settlement for training and education. Alongside tackling the workforce issues the NHS faces, we also need to see investment to address our dangerous and dilapidated mental health estate.

“We hope to see further announcements in this area in coming months – there could be serious consequences for the UK’s mental health system, and for us as a nation, if funding is not increased urgently.”

On a review into helping people back into work:

“We’re pleased to hear that the UK government plans to launch a review into how to best support people who are currently unable to get back to work. If the UK government is serious about tackling the mental health employment gap and ensuring everyone can be part of an economically prosperous Britain, the focus of this review should be on how to prevent people from falling out of work, and making sure appropriate support is available for people willing and able to return to work.

“The UK government could achieve this by committing to much-needed reforms to Statutory Sick Pay, or by implementing the Thriving at Work review recommendations in full. What the Government must avoid at all costs is pushing people into work when they are unwell, or into low-quality work that worsens their mental health."

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