After Chancellor Rachel Reeves reveals the budget for Government departments on 11 June, the Resolution Foundation said the poorest households in the UK could benefit the most.
This is due to £18bn per year in real terms going towards public services in 2028, which are used less by the wealthiest households.
Lower-income households gain more than richer Brits from services like school funding, childcare and adult social care, the think tank’s report finds.
It analysed the £320bn of daily spending to see which families gain more, and it found the poorest fifth gain £15,900 from public services, while the most well-off equivalent receive £10,400 worth of use of the services.
If free school meals were extended to all families where one parent or carer received Universal Credit, as opposed to one of Income Support, Income-based Jobseeker’s Allowance, Income-related Employment or Support Allowance, then lower-income families would be £370 better off in terms of cash equivalence. The richest would see a cash-equivalent boost by just £150 per year.
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This would also take 100,000 children out of poverty, according to the think tank.
As well as better services in local communities, a boost to spending on the NHS – which Resolution Foundation noted would be possible, in line with the Government’s 2.5% spending rise on defence – could be worth £260 to the poorest families.
One recent change announced in the Autumn Budget by the Labour Government, which has mostly helped lower earners, is the increase to the National Living Wage.
Since 1 April, the minimum wage for workers aged 21 and over has risen from £11.44 to £12.21 per hour, worth up to £1,400 extra per year for full-time employees.
Meanwhile, in the Spring Statement, Rachel Reeves said families would be £500 better off.
But the day after welfare cuts, and the forecast for growth by the Office for Budget Responsibility (OBR) was revised downwards to 1.8%, Resolution Foundation predicted living standards would fall in the next five years, with households able to take home £500 less than before.
However, a boost in public services could limit its impact.
‘Vital in-kind benefits’
Emily Fry, senior economist at the Resolution Foundation, said: “Britain’s outlook for real disposable incomes is bleak, especially for poorer households after the benefit cuts announced at the Spring Statement. But the wider picture is more positive when the £18bn boost to public services is included, as this will provide vital ‘in-kind’ benefits, particularly for poorer households.
“Lower-income families make greater use of services like schools, childcare and adult social care, and have seen the quality of those services decline over time.”
Fry added: “A focus on improving families’ experience of a range of downtrodden services in the Spending Review could help boost quality of life for lower-income families in a challenging living standards environment.”
