The government’s Spring Statement on 26th March 2025 has outlined key economic measures that will shape public spending and policy in the coming years.
Some changes will take effect gradually, while others will have an immediate impact on charities and the communities they support. Our Charity Insurance team highlights the key points that could impact charities across the UK.
Changes to Welfare and Benefits
The Chancellor announced a significant package of welfare reforms, with nearly £5 billion in cuts to disability-related benefits by 2030. Key measures include:
- A 50% reduction in the health element of Universal Credit for new claimants, which will be frozen until 2030 rather than rising with inflation
- An increase in the Universal Credit standard allowance, rising from £92 per week in 2025/26 to £106 by 2029/30
- Tighter eligibility criteria for Personal Independence Payments (PIP), with new assessments expected to reduce the number of eligible claimants significantly
- Stricter work capability assessments and increased checks on savings and other eligibility factors
- £1 billion investment in employment support, including £400 million for Jobcentres to address economic inactivity
These are the most significant welfare changes since 2019. While the government aims to reduce fraud and welfare spending, these cuts could create financial hardship, particularly for people with disabilities and low-income households, which could result in increased demand for charitable support.
Disability advocacy charity, Scope, has warned that without PIP, up to 700,000 disabled people could be pushed into poverty. Government figures also suggest that an additional 250,000 people, including 50,000 children, could fall into poverty.
As financial pressures on individuals grow, charities providing welfare assistance, food aid, and disability support may see heightened demand at a time when resources are already stretched.
New approach to regulation
The government plans to reduce regulatory burdens by 25%, primarily for businesses. However, charities regulated by organisations like the Charity Commission and the Care Quality Commission (CQC) may also see compliance changes. Ensuring regulators have sufficient resources will be crucial in supporting charities through any transitions.
Ensuring regulators are properly resourced will be vital to maintaining oversight and supporting charities through any transitions.
Restructuring of NHS and Public Services
A major announcement in the Statement is the planned abolition of NHS England within two years. The government will transfer its responsibilities to the Department of Health and Social Care (DHSC), citing cost savings and efficiency gains.
Other public sector changes include:
- Day-to-day government spending will grow by just 1.2% per year in real terms until 2029/30
- A 5% cut to administrative budgets across departments by 2030
- A £3.25 billion transformation fund to support voluntary redundancies, AI and digital improvements, and reforms in probation and foster care systems
These changes could lead to funding uncertainties for charities working alongside the NHS and other public services.
Many charities work closely with public bodies on grants, contracts, and policy initiatives. With departmental spending constrained and NHS restructuring underway, some charities may experience delays or reductions in funding. Maintaining strong relationships and open communication with public sector partners will be crucial.
Looking Ahead
The Spring Statement lays the groundwork for the upcoming Spending Review in June 2025, which will determine departmental budgets for the next three years. Further tax and policy adjustments are also expected in the Autumn Budget.
Charities should keep a close eye on these developments, as they will shape future funding opportunities and sector-wide challenges.
This article is for informational purposes only and should not be considered legal advice.
About WRS
At WRS Insurance Brokers, we are specialists in Charity Insurance and Social Enterprise Insurance , and our team is passionate about the charitable sector. As a business with a strong social conscience, we’re passionate about helping support the work of organisations that make a difference.
WRS is proudly part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.