Chancellor says she will ‘keep a close eye’ on mileage rates for public sector workers

Speaking in Parliament, Rachel Reeves confirmed she was examining the issue of mileage rates set by HM Revenue and Customs, which have remained unchanged for 15 years.

Raising the issue, the MP Oldham West, Chadderton and Royton, Jim McMahon explained that Gemma, a social worker in his constituency, travels around 400 miles a month for her job, meaning that she foots the bill “just to do her job and care for other people”.

“The 45p a mile rate, set 15 years ago, is nowhere near the true cost of running a vehicle today, which was recently assessed at 67p a mile—and that was before fuel costs rocketed in the last week,” McMahon said.

“Gemma and the millions of working people like her will welcome the Chancellor’s statement today, but can this work be expedited, given the cost of living crisis?”

Responding, Reeves said the Treasury had a “standard policy of keeping all taxes under review ahead of fiscal events…but this is an area I will be keeping a very close interest in.”

Mileage rates are used to reimburse employees who use their personal vehicles for work. Campaigners argue that the current rates no longer reflect the real cost of motoring, after increases in fuel prices, insurance and other expenses over the past decade and a half.

Organisations across social work have been campaigning for several years for a review of the rates and has lobbied MPs and ministers.

Unison has previously worked with the RAC Foundation to examine the scale of the problem and model what mileage rates would look like if they had kept pace with inflation; while BASW has long campaigned on the issue. In 2023, the foundation estimated that frontline workers who use their cars for work were out of pocket by an average of £6,000 a year.

According to UNISON, around one in five frontline public service workers is required to drive as part of their job. Those travelling long distances can incur significant personal costs, with the union’s data suggesting the financial burden falls particularly heavily on lower-paid staff, including those working in social care.

The union has called on the chancellor to ask HMRC to conduct a formal review of mileage rates so that they reflect the actual costs of using a car for work, and to introduce quarterly reviews in future.

Following Reeves’s comments in Parliament, UNISON assistant general secretary Jon Richards said: “Frozen mileage rates have shifted a heavy financial burden to workers for simply going about their jobs.

“Out of date rates are effectively a clumsy stealth tax caused by political inaction, at a time when workers are struggling with soaring cost of living pressures.

“People on the frontline in essential public services who have to use their own cars for work are thousands of pounds out of pocket.

“An increase in the rate is long overdue and urgently needed, so workers aren’t subsidising employers from their own pockets.

“It’s good the chancellor is listening and has taken the issue on board.”

Professional bodies representing social workers have also raised concerns about the impact of current mileage rates on practitioners who rely on their own vehicles to carry out visits.

Andrew Reece, strategic lead for England and Wales at the British Association of Social Workers, said: “BASW has long campaigned for a mileage rate that reflects the reality of frontline practice, especially for those working in rural areas in England and Wales. Increasing a rate that has remained unchanged since 2011 is a long-overdue step, as social workers rely on their own vehicles to reach vulnerable families and attend urgent safeguarding meetings.

“While pay has stagnated, the cost to social workers for subsidising essential visits has soared due to fuel and maintenance rises. We hope any forthcoming changes finally recognise the professional and financial pressures faced by social workers delivering critical support in our communities.”

Separate research by BASW has also highlighted wider concerns about the financial and workload pressures facing social workers.

A February 2026 survey conducted by BASW’s London branch gathered responses from 90 social workers in the capital and suggested many practitioners regularly undertake unpaid overtime and cover work-related costs themselves.

The largest group of respondents (20%) reported working an additional four to five hours each week beyond their contracted hours, while 11% said they worked more than 15 extra hours weekly. Based on the most common additional hours reported, BASW estimated that this could equate to around 20 million hours of unpaid work annually if applied across the social work workforce in England.

Although 63% of employers formally offer time off in lieu (TOIL), only 17% of respondents said they were always able to take that time back.

The survey also suggested that work frequently extends beyond standard hours. Forty per cent of respondents said they were regularly expected to work in the evening and 18% reported regular weekend working. In addition, 43% said they had to work during their annual leave either regularly or occasionally.

Respondents also reported limited financial support for home working arrangements, with 84% saying they had received no funding for a work chair or desk and 65% receiving no support for a computer screen. A majority (83%) said they paid all of their own travel costs to and from work.