THE Chancellor of the Exchequer has missed a critical opportunity to help resolve the housing crisis and in so doing give the national economy a much-needed boost.
That’s according to housing and construction industry leaders expressing disappointment over Sajid Javid’s Spending Round presented to the House of Commons yesterday.
The announcement “turned the page” on austerity, according to the Chancellor, and provided the biggest increase in public spending for some 15 years, but housing was a notable gap in its presentation.
“We recognise this was an unusual spending review: it dealt with only one year, and with only a few exceptions it relates only to revenue, rather than capital spending,” said Terrie Alafat, chief executive of the Chartered Institute of Housing (CIH).
“We are disappointed the Government has not included housing in those areas, like health and education, getting a long-term additional funding settlement. We are facing a national housing crisis, and every day we do nothing about it, it’s getting worse. Having a safe and secure home with the right support is as important as having access to good schools and hospitals in building thriving families and sustainable communities.”
Alafat also noted another area of the Chancellor’s silence — and this was on welfare. [T]he freeze on local housing allowance continues to cause misery,” she added. “In some parts of the UK a staggering 97% of private rents are now simply unaffordable under benefit rules.
“This leaves thousands of families having to choose between paying their rent and feeding their children. It is a national shame that people face being made homeless and councils have to spend £1 billion a year on temporary accommodation because LHA is failing to do its job. Restoring LHA to cover the most affordable 30% of rents in this spending review would have brought the Government significant savings in the benefit bill, as well as giving some of our most vulnerable fellow-citizens a more secure environment in which to live.”
The Federation of Master Builders (FMB) also had a thing to say about housing, namely that housebuilding along with a new retrofit strategy for existing properties must form part of the Government’s ‘infrastructure revolution’.
“The housing crisis is undermining the British economy,” said Brian Berry, the FMB’s chief executive. “If we are to increase productivity and improve our competitive edge on the world stage, then building more new homes must form part of the Government’s campaign to upgrade our infrastructure.
“I welcome the announcement for £241 million to be spent on the regeneration of high streets, town centres and local economies via the Towns Fund, and additional support for Homes England, however this must be part of an overarching strategy for new build homes and social housing, which will be key to securing a prosperous post-Brexit Britain.
“What’s more, we need a retrofit strategy to ensure that our existing homes are fit for the future, and to alleviate the scourge of fuel poverty.”
Berry also warned there remains an urgent need to address the construction industry’s skills gap, adding: “An upgrade of our infrastructure, including building new world-class schools and hospitals, will require a strong construction industry.
“The skills shortage is highly concerning in this respect, with just under two-thirds of builders struggling to hire bricklayers and more than half of builders struggling to hire carpenters.
“The announcement for an additional £400 million to be pumped into further education is a welcome boost to giving colleges and employers the resources they need to train more apprentices, and make T Levels, which will become the vocational counterpart to A Levels, a success.
“[The] Spending Round set the scene for a positive outlook for builders, but we need more details about how more new homes will be delivered.”
In further reaction to the Chancellor’s Spending Round, Claire Ainsley, executive director of the Joseph Rowntree Foundation said: “Over three years on from the Brexit vote, people on low incomes remain restless for change; and need to see decisive action to improve living standards.
“The Chancellor set out bold ambitions and action on training and bus transport – but we need much more decisive action to turn back the rising tide of poverty.
“[The] funding commitments fall far short of what towns need to boost their economies and create good jobs, and they fall short of the additional cash promised by the Prime Minister. We urge the Government to commit to funding at the scale that will make a tangible impact in those communities. It cannot be right that large parts of our country are being locked out of economic opportunities.
“The Budget must contain action that will make these aspirations real. Half a million people have been swept into poverty in recent years and low-income voters are looking to all the political parties to turn that tide.”
Torsten Bell, chief executive of thinktank the Resolution Foundation, said: “The Chancellor has binned both austerity and his fiscal rules, bringing down the curtain on the era of public spending constraint in spectacular fashion by announcing the biggest increase in public service spending since 2004.
“The Chancellor has reversed a third of the public service spending cuts announced since 2010. But the legacy of austerity still looms over some departments and public services, with their budgets remaining down by over a half.
“By borrowing to pay for his extra spending and ignoring the recent deterioration in the UK’s economic and fiscal outlook, the Chancellor has effectively torn up his fiscal rules – promising to put something new in their place later in the year.”
Local government is “delighted” with the announced funding package of over £3.5 billion for “vital” local services.
“This is the biggest year-on-year real terms increase in spending power for local government in a decade and will allow councils to meet the rising cost and demand pressures they face in 2020/21,” said Councillor James Jamieson, chair of the Local Government Association (LGA), which represents councils in England and Wales.
“The LGA has worked hard to demonstrate to the Government the financial pressures facing councils next year. We are pleased it has responded to our calls and acted by providing desperately-needed new money next year, including £1 billion for social care and £700 million for children and young people with special educational needs.
“This will help councils as they strive to ensure older and disabled people can live the lives they want to lead, support our most vulnerable young people and continue to improve local areas.
“Confirmation that key grants will also continue next year provides much-needed stability for councils. The ability to levy an adult social care precept again next year helpfully gives them the potential to raise a further £500 million to help people in our communities who need care and support.
“Today’s Spending Round has provided councils with much of the certainty they need about how local services will be funded next year.”
Andy Burnham, the Mayor of Greater Manchester, was rather more cautious in his response. “Over the last decade, Greater Manchester Police have lost around 2000 officers and vital social care budgets have been stretched to breaking point. It shouldn’t have taken this long for the Government to recognise that its cuts to these essential services had gone way too far,” he said.
“It would seem that they have finally listened but as ever with this Government, we will be watching closely to see how much of this is genuine Government funding or if Ministers intend to put the burden on local council taxpayers once again.
“It is very disappointing, however, that the Chancellor has not listened to fire and rescue services across the country, which have also faced devastating cuts by Government over recent years. While ministers have heard the argument about police it must do the same for fire and rescue services.
“We welcome the Chancellor’s focus in his statement on investing in transport in the North, but repeated promises have still not turned in to detailed plans. The North needs bankable commitments, not warm words.
“With a General Election now clearly on the horizon it is time that all parties laid out firm plans to create the Powerhouse that North has been promised so many times.”