Autumn Statement 2023

The Autumn Statement from the Chancellor last week raised significant concerns among VCSE organisations as inequality, poverty, and austerity remain unaddressed. Citizen's Advice (CA) has noted its highest demand for debt and finance support in October 2023 since before 2020, with a pressing need for assistance across households dealing with rent, council tax, water, and energy bills. Morgan Wild, Head of Policy at CA, anticipates a record-breaking month of demand in December and urges the Government to address the cost-of-living crisis in response to their latest data brief. CA assisted over 1000 people facing homelessness in October and urged the Government to lift the freeze on the Local Housing Allowance (LHA). Whilst the Chancellor did announce plans to raise LHA back to the 30th percentile in 2024, it won't take effect until April, causing worries about winter rent payments. The rate will be re-frozen in 2025-2026, leaving a long-term growing need for support in the face of rising rents and inflation.  

The increase in benefits, aligned with the September inflation rates, is overshadowed by concerns over the upcoming work capability assessment changes in 2025, which are anticipated to leave many disabled people and those with long-term health issues financially strained and in immediate need of support. Approximately 370,000 people with disabilities and chronic health conditions are expected to lose eligibility for benefits worth an additional £5,000 a year. This has prompted widespread criticism from disability charities and campaigners who view it as a missed opportunity to address the challenges faced by disabled people to access suitable work, without corresponding with real opportunities for increased income. CA expressed concern over the growing inequality gap between disabled and non-disabled clients, noting a reversal in trends where disabled people and those with long-term health issues, once a minority in food bank and homelessness referrals, are now the majority. Its anticipated that upcoming benefit sanctions will further push the lowest income households within this group into poverty and destitution.  

The Chancellor has also failed to introduce targeted support for those struggling with paying their energy bills, as the January price cap increase is anticipated to raise average bills by £94. The VCSE sector in Manchester will continue to provide support through winter including food banks and warm spaces, but the growing mismatch between low income households' budgets and incomes, exacerbated by a lack of Government compensation, has turned the situation into a crisis beyond the capacity of the voluntary sector to fully address.