Government urged not to cut Universal Credit for young care leavers

The Chair of the Education Committee has called on Ministers to guarantee that care leavers under 22 will not face cuts to Universal Credit, after the Government said that “no decisions have been made” on potential changes.

The warning follows the Department for Education’s (DfE’s) formal response to the Committee’s recent cross-party report on the children’s social care sector, published on 17 October.

In the report, MPs urged the Government to exclude care leavers from any reduction in Universal Credit support for under-22s. In its response, the DfE said: “No decisions have been made yet, and the Government will consider consultation feedback before implementing any changes.”

The Department added that any savings from removing the entitlement to the health element of Universal Credit for under-22s would instead be used to fund the Government’s new Youth Guarantee scheme.

The Government also responded to the Committee’s recommendation that it should consult MPs before introducing any cap on the profits of private providers of children’s social care. The Department said the Secretary of State “will need to be in a position to assess the levels of profits being made by providers so that she can determine whether it is necessary to introduce a profit cap. We will also take account of the state of the market more generally.”

It continued: “The Bill also requires the Secretary of State to consult before making regulations… We can commit to consulting specifically with the Committee as part of this process.”

The Government agreed with a recommendation to explore co-located mental health services between local authority children’s social care teams and NHS Child and Adolescent Mental Health Services (CAMHS), saying there was potential to pilot this approach once outcomes from its South-East Regional Care Co-operative model had been assessed.

Although the Committee called for a national fostering strategy, the Department did not explicitly commit to this. However, it said that £15 million will be invested to support foster carers in 2025–26, and that it may develop a national foster care register after assessing the costs and benefits.

On kinship care, the DfE said it would not equalise financial support with foster care allowances, but will pilot a new Kinship Allowance from autumn 2025, supporting up to 5,000 children in selected local authorities.

The response also addressed the Government’s ongoing Timms Review into reforms to Personal Independence Payments (PIP). The DfE agreed that “it will be vital to consult with young people” during the process.

However, several of the Committee’s recommendations were rejected, including calls for a National Care Offer, a national workforce strategy, a national sufficiency strategy to secure enough placements for children in care, and a review of provision for disabled children.

The Committee also reiterated recommendations from the Independent Review of Children’s Social Care, such as developing universal standards for all children’s homes and introducing an opt-out model for independent advocacy — both of which have not been adopted by Government.

Education Committee Chair Helen Hayes MP (pictured) said: “A central theme of our report was that the Government must do all it can to support young care leavers, whose prospects are sadly far worse than their peers. Any cut in the financial support they get would be unthinkable. Ministers should offer a cast iron guarantee that it will not cut Universal Credit to under 22s who have been in care.”

She added: “Elsewhere in this response, we welcome the fact that, through the Timms Review, the Government has said it will properly consult with young people on any potential reforms to PIP.

“We would also look forward to working with the Secretary of State, should they explore options for a profit cap on private providers. Many witnesses to our inquiry were adamant that excess profits are being made in the sector, to the detriment of local authorities and the taxpayer.

“Whilst there are some positive actions discussed in this response, my colleagues and I will keep pushing the Government for bigger ideas that will move the dial and help revive the children’s social care sector after its long struggle with stagnant funding and rising levels of need.”