Helen Undy, Chief Executive, Money and Mental Health Policy Institute

Today's budget - what it means for people with money and mental health problems

15 March 2023

Sometimes the budget feels like it’s all about the macro-economic headlines, with little change that would influence ‘ordinary’ working households day-to-day. Today’s budget was not one of those. With people with mental health problems three times as likely to be in financial difficulty, here’s my speedy roundup of what today’s announcements may actually mean for the personal budgets of those most likely to be struggling. And crucially, to the support available when the numbers just don’t add up.

Money coming in

With Citizens Advice recently reporting that more than half of their clients now have ‘negative budgets’ (more essential expenditure than they can pay for with their usual income), effective support through the cost of living crisis needs to look at boosting incomes as well as reducing expenditure.

As was heavily trailed, today’s budget had a major focus on getting more people into employment, including those with mental health conditions and disabilities who make up an increasing proportion of those who are classed as ‘economically inactive’. In both the rhetoric and the policy content a hard line was drawn between those out of work due to a health condition or disability and those that it’s implied do not have a ‘good enough’ reason – with carrots reserved firmly for the former group, and the ‘stick’ used as the main driver of employment in the former group.

Bring out the carrots

A few of the welcome measures included to support people with mental health problems and physical disabilities into employment include:

  • A new Universal Support Programme worth up to £4k per person to help people into work. Initial details state that the system will match people in England and Wales who want to work with existing job vacancies, and ensure they are supported to enter and stay in work by funding the necessary training and workplace support.
  • £400m of employment support for people with mental health problems or musculoskeletal conditions. This includes an expansion of the effective Individual Placement and Support programme, which provides tailored employment support for people with severe mental health problems to secure and retain employment. We called for more funding for this programme in our recent policy paper on economic inactivity, so that was a welcome announcement, though the funding provided looks relatively small so far. It also includes a commitment to make digital health services like apps quicker and easier to access, including for mental health problems, starting with £75m of funding next year. It’s essential that this includes a focus on evidencing the effectiveness of digital interventions and advocating for evidence-based options.
  • A new ‘work well programme’, piloting integrated work and health hubs in England, linking Jobcentres, health services and other local organisations to provide wraparound health support for jobseekers, benefits claimants and those at risk of falling out of work because of their health condition. We have frequently called for more integrated health, employment and financial support for people with mental health problems, and this certainly sounds like a promising move.
  • And, heavily trailed, abolishing the ever-unpopular Work Capability Assessment (WCA) and removing the link between ability to work and benefit entitlements.


This last change is very significant. Trust in the Department for Work and Pensions (DWP) from people with mental health problems and disabilities is understandably low, after decades of continual change, low and frequently cut benefit levels, assessments that fail to take accurate account of mental health problems and a benefits system that we frequently hear has a negative impact on people’s mental health. 

The WCA has, in some ways rightfully, become a bit of a totem of DWP’s unpopularity, and scrapping it is the kind of radical shift that’s needed to rebuild trust. It’s also a very ineffective system at effectively targeting support and incentivising people into work. However, while we celebrate the death of the Wicked Witch of the East, it’s not clear whether the Wicked Witch of the West is going to be much better.

Whatever replaces the WCA, lessons must be learned about how to ensure assessments are accessible, accurate, and don’t themselves cause psychological harm. And if the existing Personal Independence Payment (PIP) assessment is the preferred route, care must be taken to ensure that those who were previously found unable to work, but who do not qualify for PIP, are not left high and dry.

As we so often end up saying, the devil will be in the details on this one, but I’m glad that the opportunity is now there to meaningfully try to get this right.

New and bigger sticks

For those who are not deemed to be out of work as a result of disability or health conditions, the focus is more heavily on sanctions and benefits conditionality as a driver of higher employment. The Chancellor talked about sanctions being applied ‘more rigorously’ and conditionality and associated sanctions now being stepped up for those working 18 hours per week or less, rather than the previous threshold of 15 hours.

With a dividing line drawn in the sand between those who are supported and those who are sanctioned, it becomes all the more important that assessments accurately understand the needs of people with mental health problems, which they have historically failed to do. That’s both so that those who are out of work as a result of their mental health are found eligible for the support that they need, and also so that those who may be living with mental health problems even if they aren’t their main driver of economic inactivity, aren’t left with a sanctions regime that they are unable to comply with. That includes, for example, inaccessible work-search requirements, or a system so complex and adversarial that it causes psychological harm. We’re encouraged to see moves in the White Paper to pilot specialist, condition-specific assessors, something we have been calling for over a number of years, and that could make a particular difference to those with so-called ‘hidden’ conditions like mental health problems.

Money out

The other half of any budgeting exercise is reducing expenditure – and this is particularly important for many people with mental health problems who often face increased costs and challenges with financial management.

One of the biggest changes in the budget is an expansion of the 30 hours of free childcare offer to children aged 9 months to two years by September 2026. This is an enormous reduction in household expenses for families with young children, and has the potential to make a significant difference to gender equality by supporting more women to be able to afford to return to work. Women with mental health problems are more likely to find it a burden to keep up with bills and credit commitments than men, so tailored employment support for people with mental health problems coupled with an intervention on childcare costs that will particularly benefit women is a welcome package that could help to address two areas of inequality.

Another big announcement that we have campaigned on is the extension of support with energy bills for another three months. This will make a big difference to many households – as will the move to equalize costs for those on prepayment meters and direct debits. These aren’t measures that will make a big difference in the long-term as energy prices reduce, but over the next few months they will certainly make a notable difference.

Help when it all goes wrong

Finally, sometimes the money coming in just doesn’t equal the money going out, and we know that access to community support services particularly focused on debt, money advice and mental health can be essential. I’m pleased to see over £100m pledged to charities working to tackle the effects of the cost of living crisis, and £10m specifically on suicide prevention which we unfortunately know is even more vital in periods of economic downturn.

The balance

Overall, this budget has more to commend it than most recently. The focus on employment support for people with mental health problems is welcome, as is the financial support with energy bills and childcare costs. However, the focus on back to work support is still too focused on sanctions, and big questions remain about what will replace the WCA. As a sector though, the door is now more open than it has been for some time to influence what the disability benefits system looks like – and you can expect more analysis from us as soon as we’ve gone through the Disability White Paper in detail.