Source · Select Committees · Work and Pensions Committee
Recommendation 1
1
Accepted
Increased health-related welfare spending coincides with falls in non-health, non-pensioner welfare spending.
Conclusion
We agree that recent increases in spending on health-related welfare, as well as future spending projections, are concerning, but at the same time, we cannot ignore the fact that spending on non-health related, non-pensioner welfare has fallen, especially given the possibility that the increase in the first might be partly the result of the reduction in the second. (Conclusion, Paragraph 25)
Government Response Summary
The government committed to an above-inflation increase in the Universal Credit standard allowance, legislated through the Universal Credit Act (September 2025), and a reduction in the UC health element for new claimants from April 2026, with standard allowance rates to be kept under review.
Government Response
Accepted
HM Government
Accepted
The Universal Credit Act, which received Royal Assent on 3 September 2025, legislated for the first ever sustained, above inflation increase to the standard allowance, benefitting millions of people. This change, along with a reduction in the UC health element for new claimants, addresses perverse incentives in the UC system and better encourages those who can work to enter or return to employment. An updated Impact Assessment for the Bill was published in July 2025. The new, lower UC health element will take effect on 6 April 2026. We will keep standard allowance rates under review.