27 November 2025

One of the central themes in Rachel Reeves’ Budget this week was growth. She noted, economic growth remains “the best means to improve wages, create jobs, and support public services.”

As part of this focus, the Chancellor announced a £1.5 billion investment to tackle unemployment, centred on the new Youth Guarantee and the Growth and Skills Levy. These measures aim to address persistently high numbers of people not in education, employment or training (NEET). Under the Youth Guarantee, first introduced in September, 18- to 21-year-olds who have been on Universal Credit for 18 months without working or studying will be offered paid work placements.

This builds on commitments made in the Spending Review, including the Pathways to Work Guarantee. This initiative will ensure that disabled people and those with health conditions who are claiming out-of-work benefits can access specialist work coaches and tailored support, such as the expanded Connect to Work programme across England and Wales.

At Hestia, we welcome these developments. Initiatives that support people into employment can have a profound impact on confidence, purpose, and overall wellbeing. Our London Mental Health Index found that two-thirds of unemployed Londoners (67%) reported that being out of work negatively affected their mental health.

Our own Employment services reflect this understanding. Through our Individual Placement and Support (IPS) programme, we help people experiencing mental health challenges to find and sustain meaningful work. Last year alone, we supported 1,178 people across London into employment. Likewise, our online mentoring programme for 18–24-year-olds is designed to help young people build the skills and resilience they need to achieve their ambitions.

We also welcome the government’s commitment to adjust how earnings are treated for Housing Benefit and Universal Credit claimants in supported housing and temporary accommodation, ensuring people are not discouraged from increasing their working hours.

However, it was disappointing to see mental health largely absent from the Chancellor’s speech. While new neighbourhood health centres may improve local access to care, we cannot ignore the reality that mental health services remain the ‘Cinderella’ of the NHS: chronically underfunded, overstretched, and with unacceptably long waiting lists. Investment in mental health must be prioritised if we are serious about improving lives and supporting sustainable economic growth.

Crucially, we cannot improve mental health without addressing the social conditions that underpin it. Every day, at our network of crisis cafés and hubs across London, we see the pressures people are carrying, including:

• Housing instability: homelessness, unsafe accommodation, and the threat of eviction
• Financial strain: debt, benefit delays, unemployment, and food insecurity
• Relationship difficulties: domestic abuse, family breakdown, and caring responsibilities
• Isolation: limited social support, particularly among migrants and older adults

Without meaningful action on mental health, and on the social determinants that shape it, the Government risks undermining the very growth it seeks to achieve. Supporting people’s wellbeing is not an optional extra; it is essential to building a healthier, more resilient, and more productive society.

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