Resolution Foundation corrects Budget special welfare spending figure

The Resolution Foundation issued a correction on 5 December 2025 to its Budget special, which it said had "erroneously stated that new policy on welfare over the course of this Parliament had increased spending by '£0.7bn in 29-30'". The correct figure, the Foundation said, is a drop of £0.5 billion¹.

The correction was published in the same note that covered the Government's Child Poverty Strategy, published the same day, whose flagship policy the Foundation described as the lifting of the two-child limit announced in the Budget¹.

The Foundation also published analysis of the households affected by the two-child limit. It said most households subject to the limit, 59 per cent, already have at least one adult in work. Of the minority not in work, it said more than nine in ten, 91 per cent, either have a child under three or a disabled family member with additional care needs. Overall, it said, over 95 per cent of families benefiting from the two-child limit are either working, have a child under three, or have a disabled family member¹.

The same note reported that net migration fell to 204,000 in the year ending June 2025, down from 649,000 a year earlier, which it described as the lowest level since pandemic travel restrictions lifted. It said non-EU immigration fell by 394,000, or 37 per cent, with dependants accompanying visa holders down from 374,000 at the 2023 peak to 98,000. It added that improved methodology using actual administrative data had put net migration around 100,000 per year lower than previously thought¹.

The note also said that since 2008 job reallocation between firms had dropped by one-fifth, slowing growth, and that the ONS was due to publish new data on UK business dynamism on Monday 8 December 2025¹.

Why it matters for households

The correction changes the direction, not just the size, of the welfare figure attached to this Parliament. On the Foundation's revised number, welfare policy announced in the Budget reduces spending by £0.5 billion in 2029-30, rather than adding £0.7 billion, a swing of £1.2 billion against what was previously published¹. Anyone who read the original Budget special and took the £0.7 billion increase as the effect of welfare policy on the public finances has been given a different picture.

The two-child limit analysis concerns families already affected by the policy, which the Foundation says the Child Poverty Strategy will lift¹. Its figures indicate that work status alone does not describe most of these households: 59 per cent have at least one adult in work, and of those not in work, 91 per cent have a child under three or a disabled family member with additional care needs¹. The Foundation said the strategy did not include a milestone on whether the share of children below the relative poverty line rises or falls over the Parliament, but that the milestone is on track to be met "just"¹.

The migration figures are a separate matter of official statistics rather than benefit policy, but they bear on the population and labour force assumptions behind spending and tax forecasts. The Foundation attributes part of the fall to data quality, saying improved methodology has revised net migration down by around 100,000 a year¹.

What happens next

The ONS is due to publish new data on trends in UK business dynamism and productivity on Monday 8 December 2025, which the Foundation said could show whether recent years of higher interest rates, energy prices and minimum wages are shifting resources across the economy¹. The Foundation said it will publish further analysis of what the Child Poverty Strategy means for child poverty over the Parliament¹. No date has been reported for any revision to the official Budget documents themselves.

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