Spring Statement and its impact on young Londoners

Chancellor Rachel Reeves made her Spring Statement yesterday, ahead of the Spending Review in June 2025. The package of measures aims to bring about a “new era of security and national renewal” to kickstart economic growth, protect working people and keep Britain safe. 

However, alongside the headline measures to increase defence spending and boost economic growth the Chancellor reconfirmed the wide-ranging cuts to welfare benefits, announced by the DWP Secretary of State last week.   

Impact on children and young people 

Of particular concern to the youth sector is the accompanying Department for Work and Pensions (DWP) analysis that the “combined effect of the package of welfare reforms will push tens of thousands of children deeper into poverty and make life harder for millions more”. An additional measure announced by the Chancellor was the freezing of health-related universal credit for new claimants until 2030 (alongside the halving of the benefit from April 2026 announced by the Welfare Secretary, Liz Kendall).   

Links to the Youth Guarantee 

The welfare reform package was set out in The Pathways to Work: Reforming Benefits and Support to Get Britain Working Green Paper. 

It was previously announced that a new Youth Guarantee would provide a guaranteed pathway into education, training, or help to find a job or apprenticeship or a job for all 18–21-year-olds, which we analysed in a previous article. Given that nearly 900,000 young people are not in work or education, we welcomed the Government setting out measures to address this through the Youth Guarantee. We also welcomed the explicit recognition that poor mental health is one of the greatest barriers to employment: 1 in 5 young people reported a mental health condition in 2023, the highest on record. 

However, the Green Paper is proposing to withhold the health element of Universal Credit to young people under 22, which includes mental health conditions. The intent is instead to reinvest savings “into work support and training opportunities through the Youth Guarantee”. The risks of removing these benefits, alongside the reform to Personal Independence Payments (Pip), are likely to be considerable for thousands of young people with physical and mental health issues – and most especially disabled young people. 

What we want for young people 

Young people are experiencing challenges about their future, with many navigating poor mental health. London’s voluntary youth sector supports hundreds of thousands of young people across every community, despite escalating financial pressures. Every young person deserves to be supported to lead healthy and fulfilled lives. We urge the Government to ensure that the aspirations being set out by young people in the National Youth Strategy consultation are not undermined for those affected by these welfare cuts.