FEA congratulates government for change in benefits policy which will lift half a million children out of poverty

In an unenviable fiscal position, the government has made bold choices to prioritise children and young people. We welcome real-term increases in education and health spending, and the concrete steps taken to alleviate the cost-of-living crisis. But the challenging economic environment is clear: the education sector, and wider society, will need to prepare for a period without much financial flexibility. Collaboration and partnership between government and public, third and private sector will be crucial to navigating these choppy waters.

Ending the two-child benefits cap – a victory for children and families

This Budget should be remembered for its landmark decision to lift the two-child benefits cap. At the FEA, we and our youth steering group, alongside dozens of other campaigners have consistently called for the removal of this as a means of providing immediate relief to families in poverty. We congratulate the government for taking this bold and vital step towards a fairer education system.

The two-child limit has played a major role in rising child poverty. Between 2010–11 and 2022–23, the relative child poverty rate increased from 27% to 30%, driven almost entirely by a surge among families with three or more children. Removing the cap was a moral imperative.

According to the Institute for Fiscal Studies, reversing the policy will lift 540,000 children above the absolute poverty line, reducing child absolute poverty by 4 percentage points from 30% to 26%. The Resolution Foundation estimates that 490,000 children will benefit from this change.

The benefits go beyond finances. Poverty is linked to higher stress levels and insecurity, which research shows negatively impacts child development. Removing this policy is a vital step toward a fairer education system and closing attainment gaps between children from low-income households and their peers.

Today’s announcement marks a historic victory for children and families - and a triumph for the organisations that fought tirelessly for change. This outcome shows what is possible when evidence and advocacy come together.

The 16-19 Student Premium – a missed opportunity

We are disappointed that today’s Budget did not introduce a 16–19 Student Premium, which the FEA has called for alongside organisations such as Get Further and the Education Policy Institute. This measure would have provided targeted support for disadvantaged students at a critical stage in their education, helping to close attainment gaps and improve progression into higher education and employment.

Post-16 education is a pivotal moment for young people. We support the £1.5bn committed to the Youth Guarantee and funding to enable SMEs to provide apprenticeship training free of charge. However, additional targeted investment for those from low-income backgrounds is needed to stop them falling further behind, improving their life chances and furthering social mobility. A Student Premium would have been a powerful way to address these inequalities. We will keep working with FEA members to urge the government to revisit the case for a 16–19 Student Premium in the next fiscal cycle.

Support for Schools

Alongside real-term budget increases, we welcome the £5m in new funding to increase book supplies in secondary schools to support the National Year of Reading. Access to books is an essential part of a good education for all children and we are pleased to see steps towards this being a universal offer.

We note the caution expressed by the Office of Budget Responsibility (OBR) about the lack of detail on the management of financial deficits accrued by local authorities dealing with increasing SEND demand. It is positive to see the longer-term plan for councils’ SEND costs to be met entirely by Department for Education budgets. But with forecasts that these deficits could be as high as £14bn by 2028-29, we urge the government to quickly take steps to address this. This should involve engagement with local authorities, schools and trusts, alongside broader strategies to address the root causes of increasing costs.

The Budget’s reversal of the two-child limit is a powerful reminder that collaboration drives systemic change. At the FEA our focus now turns to the next steps to support families’ needs, working with our member organisations to deliver solutions from neighbourhood to national level, ensuring every child has the chance to thrive.