Meera Saravanan, IF student researcher, looks at the Spring Statement from a young person’s perspective.
The Spring Statement
Earlier this week, the Chancellor delivered the Spring Statement. For young people, the impact is undeniable: while positive steps have been taken – such as commitments to invest in apprenticeship opportunities and social housing – many of the other challenges young people face remain unaddressed. With welfare cuts on the horizon, and job market uncertainty growing, the statement leaves many unanswered questions about the future prospects of children and young people.
Employment and earnings
The Chancellor reiterated that there will be an increase in the National Living Wage beginning in April 2025. This is a win for millions of workers across the UK over the age of 21 years. However, the rise sits alongside the imposition of higher Employers National Insurance contributions. IF has long argued that increasing employer national insurance acts as a tax on young people’s jobs for the following reasons: organisations were not given any notice so the tax rise has eaten into surpluses; profits and projected growth; organisations have become more cautious over new hires; organisations may be delaying pay rises; and some organisations may even cut their workforce numbers.
The Chancellor also announced that the National Minimum Wage for 18–20 year-olds will rise to £10.00 an hour. While welcome, the different pay rate by age highlight the ongoing pay disparity among young workers and older workers. While the government aims to align wage rates over time, the current system continues to undervalue the contributions of the youngest members of society.
Housing
Also announced, is a £2bn investment into affordable housing. This funding is set to support the construction of 18,000 affordable and social homes. In addition, the government has pledged £600m over four years to train 60,000 new construction workers to “provide opportunities for young people.” The government appears to have twigged that following Brexit the nation does not have the construction workers the country needs to build the 1.5 million homes promised over this parliament.
A key part of this strategy is the additional allocation of £100 million to fund 35,000 construction focused skills’ bootcamps. To further support young people, an additional £40 million will fund up to 10,000 new places in construction Foundation Apprenticeships, with this arguably providing a foundation for those looking to enter the workforce. Furthermore, £100 million will be used to establish 10 new Technical Excellence Colleges in every region of England. This signals a step towards providing young people with more opportunities; however, it is clear that further efforts are needed across other sectors to address the challenges in gaining employment and developing skills. Expanding training programmes across industries could better equip young people for the workforce and also reduce the number of those who are not in education, employment or training.
Welfare support
The changes to Universal Credit (UC) will have a significant impact on those facing health challenges. From April 2026, while some claimants will see an increase in their Universal Credit standard allowance, those with health conditions or disabilities are set to be hit the hardest. The health element, which supports those unable to work due to illness or disability, will be cut for new claimants, dropping from £97 per week to just £50 per week by 2026. For existing claimants, the health element will be frozen at the current rate, providing no relief in terms of inflation. In addition, it was announced that there are plans to delay access to the UC health top-up until claimants reach the age of 22. Although the Government promises more opportunities for young people, these cuts will likely worsen the financial strain many face as they transition to adulthood. The impact of such cuts has been examined, with an estimated 50,000 children pushed into poverty as a result. The cuts only increase the financial hardship of the most vulnerable, and it is children who will bear the brunt of these changes.
Improving public service efficiency
The government’s announcement of a £3.25 billion Transformation Fund is a significant step towards improving public services, with a focus on harnessing digital technology and Artificial Intelligence to improve efficiency and reduce costs. A key area of investment will be the reform of the children’s social care system, with £25 million allocated to support the fostering sector. This funding will be used to recruit 400 new foster homes, aiming to provide greater stability for children in care while easing the financial pressures faced by local authorities. This initiative is beneficial for children and young people in care as it offers them a better chance of finding stable, supportive environments that can improve their overall well-being and future prospects.
Missed opportunities?
Overall, the Spring Statement contained some positive initiatives, however, it falls short in offering support for education and training across the board. The National Education Union has voiced concerns about continued funding cuts, which will likely deepen the pressure on already underfunded educational institutions. The lack of focus placed upon education initiatives is likely to be detrimental in the long term. Apprenticeships can be transformative for young people, but without proper planning, resource allocation and government oversight, the programmes may fail to deliver the benefits they promise.
Rising living costs, uncertain job prospects, and reduced welfare support leave many young people struggling to make ends meet. At present, the future continues to look uncertain for the younger generation. Ultimately, this Spring Statement highlights that there is a political choice to focus on austerity-like measures, rather than transformative investments that could address the needs of young people today.
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