Spending Review: Welcome Progress, But Big Gaps Remain

Last week’s Spending Review set the course for the government for the next few years, with implications for all communities across the country. It makes some welcome progress on the social and economic drivers of health – with new investment in affordable housing, pathways into good work for young people, and expanded free school meals to reduce child poverty. We are pleased with the government’s commitments in these areas.

But there are big gaps remaining, such as dedicated resources for enforcement of housing standards, a near complete absence of focus on mental health, little mention of advice services, and the looming impact of proposed welfare cuts. Without urgent investment in these areas, the positive announcements risk falling short, and the gaps will exacerbate rather than alleviate health inequalities.

What’s welcome?

Investment in affordable housing

In our submission to the Treasury, we urged the government to include specific investment in affordable, decent homes. Tackling poor housing conditions is critical to the government’s missions on health, the environment and economic growth. Poor housing costs 1.4bn annually and improving housing quality could generate almost £6bn in health benefits and NHS cost savings.  We therefore welcome the government’s announcement of major investment in affordable and social housing, with £39bn to be spent towards social and affordable homes and rents for those on lower incomes over the next decade.

Increased access to good work for young people

One in eight - almost 1 million - young people are now not in employment, education or training. People’s Health Trust recently launched a new programme in three cities in England – Good Work for Young People’s Mental Health. This aims to break the cycle of poor mental health and unemployment for young people, by embedding Individual Placement and Support (IPS) workers within trusted local mental health charities to support young people with mild to moderate mental health problems. We therefore welcome the government’s announcement of over £3.5 billion for employment support by 2028-29, including £1.2bn for training and upskilling.

Expanding free school meals to address child poverty

Families with children are disproportionately likely to live in poverty. Child poverty harms physical and mental health, dental health and educational attainment, diverts already stretched school resources and creates health problems in later life.  Alongside others, People’s Health Trust called on HM Treasury to expand Free School Meals to be available for all state school pupils living in households in receipt of Universal Credit. We are very pleased that the government has committed to this, so that any child in England whose parents receive Universal Credit will be able to claim free school meals from September 2026. We’re also pleased to see the government commit to expanding this further to early years and post-16 settings by the end of this Parliament.

What’s Missing?

Enforcement funding – critical, and still overlooked 

Investment in home building, in combination with the forthcoming Renters’ Rights Bill introducing the Decent Homes Standards for private tenants for the first time, could go a long way to improving housing conditions for the most marginalised and disadvantaged people in the country.   We have campaigned for government to ensure landlords meet legal obligations through well-resourced enforcement locally, including proactive inspections. Local councils will be crucial to successful implementation of the new laws, but they are under severe strain, including as a result of SEND reform. Without specific enforcement funding, the higher standards for rented properties and the faster action required of landlords that is promised in legislation won’t reach those living in cold, damp, or unsafe homes.

Mental health – no targeted response 

Mental health-specific investment was largely absent from the Spending Review. This is especially concerning given the exponential rise in demand for mental health support among young people - one in three of whom now report symptoms of common mental health disorders.

Advice access – a proven route to better health 

Timely free and independent advice when it is most needed is critical, and getting support can reduce anxiety and longer-term stress and improve health. There is also a large body of evidence that advice services are efficacious to health improvement if they are seen as integral to health systems. We called for investment in advice services in our submission but have yet to see any steps toward this - despite evidence showing every £1 spent saves £2.71 potentially saving up to £4 billion annually by avoiding court proceedings or emergency housing services.

 Welfare reforms – risks to health and security

We are concerned by the welfare reforms outlined in the Spending Review 2025 and recent statements from government. While the replacement of the Household Support Fund with a new Crisis and Resilience Fund is a positive shift, delivering multi-year, preventative support via local councils for essentials like food, fuel, housing and childcare, this welcome measure will not offset the impact of planned changes to disability benefits (proposing tighter eligibility rules for Personal Independence Payments (PIP) and reforms to Universal Credit’s health-related elements) on many people experiencing the sharpest health inequalities.

Next Steps

We need bold, joined-up action from across government to tackle the root causes of poor health, not just their symptoms. Mandating all government departmentsto focus on one or more of the social and economic determinants of health would be a no-cost action that can be taken immediately and would embed a preventative agenda across government. People’s Health Trust will continue to advocate with our network of 500 grassroots partners to make the case for action on advice, enforcement, mental health and welfare reforms.