By Christopher Jones, Advocacy Officer
The Government’s Autumn Budget sets out a wide range of fiscal and social policy measures intended to ‘cut the cost of living, cut waiting lists, and support economic stability’. But what are the implications of the Chancellor’s Budget for communities, public services, SMEs, VCSEs, and large organisations engaged in purpose-led work? Here, we break down the major measures, the potential benefits, and the areas where uncertainty remains.
Ending the Two-Child Benefit Cap: A Significant Shift for Social
Outcomes
One of the most notable announcements was the removal of the two-child benefit cap. Many organisations across the social sector have long highlighted this policy’s impact on childhood poverty and household resilience. The change is likely to increase welfare spending over the coming years but also has the potential to significantly reduce child poverty levels.
This shift will strengthen family wellbeing, improve children’s long-term life chances, and ultimately reduce pressure on local health, housing, education and Local Authority children’s services. Crucially, strained VCSE support and crisis services across all of these areas are likely to benefit from this policy and the resulting material increase in household income.
Extended Freeze on Income Tax Thresholds: Pressures on Households,
Staff, and Employers
The extended freeze on income tax thresholds to 2030/31, or ‘stealth tax’, represents a more complex policy to assess from a social value perspective. On the one hand, the measure will substantially raise revenue for the Government and has undoubtedly functioned as a mechanism to free up spending in other areas, allowing for policies such as the removal of the benefit cap and additional funding for devolved regions.
On the other hand, social value is fundamentally about impact on people, and, in spite of any potential for broader economic and social benefits in the longer-term, the most tangible and keenly felt impact of the freeze on people in the short-term will be one of additional financial strain.
Increased Funding for Mayors and Devolved Governments –
Opportunities for Localised Social Value
The Budget commits an additional £13bn to regional and devolved administrations. This presents meaningful opportunities for place-based investment, local economic development, and integrated social value approaches that reflect community priorities. This increase may also expand the role that SMEs and VCSEs can play in delivering social, economic, and environmental outcomes at regional level, provided commissioning environments are designed to enable broad participation.
NHS Staffing and Technology Investment – Potential for System-Wide Impact
Additional investment in NHS staffing and £300m for technology modernisation could significantly improve service efficiency, patient experience, and the workplace wellbeing of overburdened NHS staff, at a time where improvement across all three areas is badly needed. For public-sector members and suppliers in our network, this may create opportunities for innovation, partnership, and improved outcomes across health and care systems. Of course, technology-led change does also require effective implementation, skills support, and long-term planning to fully realise its social value benefits.
Changes to Fuel Duty, EV Mileage Charges, and Decarbonisation Incentives
The Budget includes future increases to fuel duty and the introduction of a mileage-based charge for electric and plug-in hybrid vehicles from 2028. While part of a wider transition to a sustainable fiscal model as transport decarbonises, these measures may raise operational costs for organisations relying on vehicle fleets, particularly SMEs and VCSEs. At the Institute for Social Value, we continue to advocate for supportive transition
frameworks to ensure small organisations can decarbonise affordably and continue to deliver social value in their communities.
Salary-Sacrifice Pension Reform
The introduction of National Insurance contributions on salary-sacrificed pensions above a threshold represents another area where the impact will vary across our membership. Larger employers may absorb administrative or financial implications more easily, while SMEs and VCSEs may face additional complexity. We will monitor how this policy evolves in practice and share guidance with members as more detail becomes available.
A Mixed Landscape for Social Value
The Autumn Budget contains several promising developments that have the potential to improve outcomes for families, communities, and public services, particularly the removal of the two-child benefit cap, increased welfare spending, and investment in the NHS. At the same time, some measures introduce new financial or administrative pressures, especially for SMEs and VCSEs already operating in challenging economic conditions. These organisations are essential to delivering social value across the UK; supporting their resilience must remain a national priority.
Our work in the coming months will continue to:
- Analyse the real-world impact of these measures as they develop
- Support members — large and small — in responding effectively
- Advocating for policy environments that enable social value creation
- Ensuring SME and VCSE voices remain central to national discussions
