Budget failed on addressing systemic challenges facing disabled people, Treasury is told

Labour’s first budget for 15 years has failed to do enough to address the “systemic challenges” faced by disabled people across society, user-led organisations have warned the Treasury.

The first budget speech of chancellor Rachel Reeves included no serious attempt to address the crises in accessible housing, adult social care and inclusive education – although there was some new funding – or the huge barriers in accessible transport.

Instead, there was a clear focus on “cracking down” on benefit fraud and investing in new schemes to push “inactive” disabled people into work.

Reeves mentioned the government’s fraud, error and debt bill, which the chancellor said would provide “direct access to bank accounts to recover debt”, strengthening the powers of the Department for Work and Pensions (DWP).

The budget report highlights how the bill will also introduce “new powers to check benefits are being paid correctly using data shared by banks and financial institutions”, which disabled campaigners have warned will see DWP ordering banks to “spy” on the accounts of benefit claimants.

Reeves also confirmed that next April’s annual increase in working-age benefits would be just 1.7 per cent, because of the low rate of inflation in September.

The only direct mention of disabled people in her speech was when she said ministers would deliver the cuts to out-of-work disability benefits planned by the last government, although her comments sparked huge confusion among activists, disabled people’s organisations, charities and the media (see separate story).

Despite the failure to place any focus on disability equality, Reeves did announce a £1 billion increase in spending on special educational needs (SEN), a real terms increase of six per cent; and £600 million extra in grant funding for social care, although it is not yet clear if this is solely for adult social care.

Her speech came just days after a report published by the government found that tens of thousands more disabled children could have their needs met in a mainstream setting rather than a special school, if there were major improvements to the SEN system (see separate story).

The budget report also reveals an £86 million increase in spending on the Disabled Facilities Grant (DFG), which will support “around 7,800” more adaptations to disabled people’s homes, although Reeves made no mention of this in her speech.

That figure suggests DFG spending – which currently helps to adapt about 50,000 homes a year – will rise by nearly 14 per cent in 2025-26.

The budget report makes clear that work and pensions ministers plan to set out their plans for reforming disability benefits early in 2025.

Reeves said the government would soon publish its Get Britain Working white paper, which she said would take “an integrated approach across health, education and welfare” to addressing the “root causes of inactivity”.

The budget report says the government is providing “record levels of capital investment in health” to help reduce NHS waiting-lists and “thereby supporting people into work”.

And it says the white paper will show how the government will “test new approaches and collect robust evidence on how to tackle the root causes of ill-health related inactivity”.

It will set up eight “trailblazer” areas across England and Wales that bring together health, employment and skills services to “improve the support available to those who are inactive due to ill health and help them return to work”.

This will include NHS England “health and growth accelerators” in at least three areas to “develop evidence of the impact of targeted action on the top health conditions driving economic inactivity”.

The government will also spend £115 million next year on a new supported employment programme, Connect to Work.

From 2026-27, the Connect to Work programme will support nearly 100,000 disabled people a year, with councils able to “tailor their delivery” of the scheme “in ways that meet their local needs”.

In total, the budget report says, the government will spend more than £800 million on disability employment support in 2025-26.

The budget report also says the government will spend £120 million in 2025-26 to support the purchase of new electric vans and support the manufacture of wheelchair-accessible electric vehicles.

In response to the budget, DPO Forum England – whose members include nearly 50 disabled people’s organisations, such as Greater Manchester Disabled People’s Panel, Inclusion London and Buckinghamshire Disability Service – has written to the Treasury to express its concern at the measures announced by Reeves.

It said the budget “fails to address the level of poverty experienced by disabled people” and that it saw the focus on getting the “economically inactive” back to work as “targeting vulnerable groups like the sick, disabled, and young people with mental health issues”.

It told the Treasury: “The increases in disability benefits, social care, and special educational needs funding are a drop in the ocean compared to the actual funding shortfalls, which are estimated to be much higher.”

The forum said the budget had failed to “adequately address” the “systemic challenges” around inclusive education, carers’ support, and the institutionalisation of disabled children.

And it said the budget “appears to further the troubling regression of disabled people’s rights, falling short of the support required to rectify these issues and build a genuinely inclusive society”.

Julia Modern, senior policy and campaigns manager at Inclusion London, said the budget was “a huge missed opportunity to reset the relationship with disabled people”.

She said: “The chancellor claims her budget shows ‘no return to austerity’; she really should have added ‘except for disabled people’.

“While we are pleased to see modest increases in some budgets for essential services like the NHS and an additional £600 million for local government-provided social care (a drop in the ocean compared to the scale of crisis in the £28 billion a year system), there is nothing in the budget to address the huge rates of poverty among disabled people.

“Instead, our social security is being eroded.”

Disability Rights UK (DR UK) said the budget represented “a failure to make real change”.

A DR UK spokesperson said: “Despite the minimal uplift in spending to fund our crumbling public services, the budget doesn’t give disabled people the confidence that the services we rely on every day will tangibly get better.

“At the end of the day, the biggest announcement was one our community had been expecting: more disabled and working-class people seeing their benefits cut whilst there will be no real difference in our local services.”

Gabrielle Johnson, communications and membership manager for National Survivor User Network, said there was frustration “at the ongoing neglect of appropriate social security for those most in need of state support” and the government’s decision to “reinforce harmful rhetoric” through measures in its fraud, error and debt bill.

They said the bill would give DWP “access to benefit recipients’ financial records without their consent, criminalising disabled people and creating fear and anxiety around penalisation”.

And they said the Get Britain Working white paper evoked “familiar and damaging messaging around the inherent value of human life as a tool to economic productivity”.

Johnson said: “Seriously ill and disabled people, including those with lived experience of mental ill-health, distress and trauma, deserve dignity, care and personalised support, but our government seems unable to meet even the very basic needs of those made vulnerable by the policies they continue to implement.”

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