Spring Statement 2023: extended childcare and benefits rise

Spring Statement 2023

The Chancellor, Jeremy Hunt, has announced his ‘budget for growth’. The Spring Statement contains many pledges on benefits, the cost of living and childcare. Our Policy and Campaigns Manager, Mark Gale, helps to unpick what the announcements mean and why many young women will feel the measures don’t go far enough.

The measures announced in the Spring Statement bring important changes to benefits, and childcare as well as extending support around the cost of living. The chancellor has said he wants to support people into work.

This is important because many young women tell us they face huge challenges in finding and sustaining work. From a lack of affordable and flexible childcare to being paid less than male colleagues or being expected to tolerate bullying, discrimination and sexual harassment, it is not always easy being a young woman looking for or in work. What do the announcements made by the Chancellor today mean for young women and do they do enough to help them overcome the many challenges they face?

Extra support for childcare

One of the most important announcements came in the form of additional childcare support. If you are receiving Universal Credit, the maximum amount you will receive in childcare support will go up

from £646 to £950 per month for one child and
from £1,100 to £1,630 for 2 or more children.

Crucially, the costs will now be covered upfront – you won’t have to pay these yourself and then claim them back.

Being unable to afford childcare costs upfront was one of the biggest barriers young women told us about in our report, Childcare: What young women want, and it is an issue we have campaigned on, so this is hugely welcome. However, there is still a limit of 85% of childcare costs that can be covered by this payment meaning many young women will still find it difficult to meet these costs, particularly if they have younger children.

Additionally, it was announced that parents of all children aged over 9 months, where all adults are working at least 16 hours a week will soon be able to receive up to 30 hours a week of free childcare. This will be introduced in stages so from:

April 2024, parents with children over 2 years old will be able to receive 15 hours free childcare per week.
September 2024, parents will be able to claim 15 hours free childcare per week for any children aged over 9 months, and
September 2025, parents will be able to receive up to 30 hours free childcare per week for all children aged over 9 months.

The Chancellor also announced increased funding to nurseries that offer 15 and 30 free childcare hours. This could mean nurseries are better able to cover their costs which may halt the worrying trend in the numbers of nurseries that have had to close.

Young Women’s Trust has been clear that the childcare system needs urgent reform. It must be affordable for young women who are disproportionately on low incomes. It must be flexible enough to allow the thousands of young women working irregular hours or who are insecure work to access the childcare they need. And it must be sufficiently backed by government investment to ensure that nursery teachers and staff, who are overwhelmingly likely to be women, are paid a fair wage.

It’s still not clear that the amount of funding the government is providing to nurseries will achieve this, and we’re also worried about the news that nursery workers may be expected to look after 5 children each instead of 4 – which could lead to safety problems as well as more strain on already overstretched staff.

Those young women with school-age children will know the problems of trying to work around school hours. So we were also pleased to hear the Chancellor announce funding and support for schools and local authorities to provide enough wraparound care for every school child from 8am to 6pm. This is expected to be in place from September 2026 – so it’s still a while off but will be welcome when it comes.

Changes to benefits and pensions

As previously announced, the basic allowances of Universal Credit have been increased in-line with rising prices. This means that the rates will be as follows:

Single person under 25 – rising from £262.31 to £292.11
Single person 25 or over – rising from £334.91 to £368.74
Couple under 25 – rising from £416.45 to £458.51
Couple where one or both is 25 or over – rising from £525.72 to £578.82

But the low starting point and the predictions that prices might rise further may mean thousands of people remain unable to afford basic essentials. And the lower rate for younger people means that many young women between 18 and 24 may continue to struggle. This budget is a missed opportunity for the government to introduce a benefits floor to prevent anyone ever receiving less than what is needed to cover essential costs.

Changes to Work Capability Assessments rules

Young women receiving additional benefits because of a disability or long-term health condition will be interested in the new rules around Work Capability Assessments. This will be replaced by a new assessment that asks people with long-term health conditions what sort of work they think they could do. People with long-term conditions will face more requirements in terms of job seeking. They will, however, be able to keep more of their benefits as they move into work. This could help make the move into work easier, but there is a concern that the new system could be used to pressure people into work that that offers insufficient support.

When combined with the increases in the administrative earnings threshold, the above changes are a particular concern. Unless you increase your hours and earnings under Universal Credit to the equivalent of least 18 hours a week, you will now be required to intensify your job search to increase the hours you work or move to a better paid job. This has been billed by the government as a supportive measure, but we are deeply concerned that thousands of young women will be at greater risk of being sanctioned.

Unless there is a greater availability of well-paid part-time work and flexible and affordable childcare, many young women will find it difficult to access opportunities. In those cases, sanctions are an inappropriate response to a broken jobs market. This will be something Young Women’s Trust will continue to monitor and, as always we will be guided by how young women experience the impact of this policy as it is rolled out.

Help with the cost of living

Some help is also being extended forenergy costs which could help young women struggling with the cost of living. 54% of young women told us that they are struggling to make their cash last till the end of the month and 2 in 5 said their financial situation had got worse over the last year.

The decision by the government to extend the cap on energy prices will make it easier for young women to manage their way through the current crisis. Furthermore, if you pay for gas and electricity on a pre-pay meter, you will no longer be charged more than direct debit customers, meaning you could save up to £45 a year.

There were many welcome announcements from the Chancellor. However, it is still not clear whether some of the measures go far enough to give young women the support they need. This is why we at Young Women’s Trust will continue to speak to young women to understand how they are affected by the Chancellor’s announcements and to work with them to campaign for the additional changes they need to see.

Help with your money

Spring Statement 2023: Key points at a glance | BBC News

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