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Spending Review: 5 things anti-poverty campaigners want to see

Rishi Sunak’s announcement will lay out public spending plans for the next 12 months
08/07/2020. London, United Kingdom. Chancellor Rishi Sunak leaves 10 Downing Street to go to the House of Commons to make the Summer Budget Statement. Picture by Pippa Fowles / No 10 Downing Street.

Chancellor Rishi Sunak will lay out his plan for the next year of public spending tomorrow in his Spending Review, an emergency plan for the economy through and beyond the coronavirus pandemic.

Local authorities will have all eyes on the announcement as it will set out the money they have to work in providing services and support to their residents through the cold winter months and economic difficulties ahead.

The Big Issue’s Ride Out Recession Alliance has already been looking for ways to support people who are at risk of losing their jobs and their homes, so we asked some of the experts and organisations what they are hoping to see.

Here are five big asks for Sunak’s Spending Review:

Protection for jobs

The impact of Covid-19 on the jobs market has been profound. The unemployment rate hit 4.8 per cent at the Office for National Statistics’ last count in early November, meaning 1.62 million people are now out of work. That number is expected to climb as pubs, restaurants, venues and many other businesses remain shut down or have reduced numbers of customers. 

The furlough scheme may have been extended until March, but some organisations are looking for more protection.

The New Economics Foundation proposed their own Winter Plan for Jobs, Incomes and Communities this week, calling on the Chancellor to guarantee job support through the furlough scheme “for as long as, and wherever, there are sever social distancing restrictions in place”.

The think tank’s plan also call for the government to change the work landscape going forward by retraining and re-skilling people to take on a million new low-carbon jobs.

Tackle the housing crisis and homelessness

The Treasury has already announced an additional £151m will be made available to prevent homelessness and help rough sleepers in the next financial year, on top of the £103m that Sunak set aside at March’s Budget to take on the issue in 2021-22.

But campaigners are also calling for measures to tackle the housing crisis to stop people becoming homeless in the first place.

Giving councils the cash to build the social housing that the country desperately needs has always been top of Shelter’s wish list from the Treasury even before the pandemic. That need is even more urgent now.

Polly Neate, chief executive of the housing charity, said: “Only by investing in decent and affordable social homes, will we be able to end homelessness in all its forms for good.”

And the Nationwide Foundation wants to see the Chancellor give a little-used government project a brand-new “lease of life”. 

The Government’s Community Housing Fund gave £163m to community-led housing groups in 2018 to boost England’s housing supply. This funding was only intended to run until March 2020, however, and there has been no sign of a new influx of cash.

Gary Hartin, Nationwide Foundation programme manager, has urged Sunak to pour money into the fund, insisting it can provide homes and financial value for years to come. And a report by Capital Economics found that for every £1 invested in community-led housing, the public benefit £2.70 over the following decade.

Hartin said while the review is likely to focus on the coronavirus crisis the opportunity to invest in housing should not be overlooked. 

“Community-led housing is great value for money,” he said. “It helps reduce social security bills. It improves quality of life for residents. It even saves the NHS money by providing warm, dry and safe homes that don’t make people unwell.”

Meanwhile, RORA members Generation Rent want a grant scheme to be set up that will cover any rent arrears for tenants pushed into debt by the first wave of Covid-19. 

And after “a decade of cuts and underinvestment”, Centrepoint will be keeping a close eye on what Sunak offers to help the young people they support. The youth homelessness charity is calling for a £1bn investment into homelessness services to be ring-fenced so it can reach the people who need it most.

Keep the £20-per-week Universal Credit increase

The UK’s social security budget has shrunk under successive Conservative governments  but patching up those holes is key to improving the prospects of millions, according to experts. Great attention will be paid to what decisions the Chancellor will make on welfare support.

Campaigners including RORA member the Child Poverty Action Group have been united in their calls for the emergency increase in Universal Credit and Working Tax Credit of £20 per week to be made permanent. Dropping UC payments back to what they were before lockdown would mean an overnight income cut equivalent to £1,040 a year.

Reform the welfare system

Anti-poverty experts are calling for Sunak to scrap the benefit cap and two-child limit on welfare payments as well.

It would cost the Government £1.4 billion, the Child Poverty Action Group (CPAG) said, or less than 10 per cent of the recently announced boost in military spending, but would ease pressure on struggling households UK-wide.

Generation Rent also wants the benefit cap lifted to help families cover their everyday costs, with figures showing the number of households affected by the cap rose 93 per cent between February and May.

And others including the Zacchaeus 2000 Trust (Z2K) want the Chancellor to make sure no one is being excluded from Covid-19 cash support.

The Disability Benefits Consortium (DBC), formed of 100 organisations alongside Z2K, want that increase to be extended to people on benefits such as Employment and Support Allowance, Jobseekers Allowance and Income Support – the main benefits paid to disabled people.

Ella Abraham, Z2K’s policy and campaigns officer and campaigns co-chair of the DBC, said: “For disabled people and others on legacy benefits, being denied the £20 per week life line that those on Universal Credit have received has meant real hardship.

“The Government must take this opportunity in the upcoming Spending Review to act now, end this discriminatory two tier welfare state and ensure that the two million people on legacy benefits receive this vital extra support and are no longer left behind.”

The New Economics Foundation also wants to prevent people from falling into poverty. They are calling for a Universal Basic Income-style guaranteed living income of £227 a week as well as making the furlough scheme more flexible by removing the current “arbitrary deadline” set for the end of March.

Lift children and young people out of poverty

Keeping the £20 Universal Credit increase will stop 350,000 children falling into poverty in April, according to CPAG. But they believe Sunak can go further to improve the life chances of the 4.2 million children living in poverty in the UK.

The Government should increase child benefit by £10 a week, the charity said, to give families a small income boost during the pandemic and cut child poverty by 450,000.

And it is time to make free school meals available to all children whose families receive Universal Credit or Working Tax Credit, they added, while investing in education to reduce the attainment gap and improve the economy long-term.

Centrepoint wants Local Housing Allowance to increase in line with real rents across the country and for the planned change in housing benefit for vulnerable young people – which will increase the amount given to care leavers and homelessness-experienced young people – to be brought in before its current due date in 2023.

For these organisations and many like them, the need is clear for more spending to help the most vulnerable in society to help themselves out of poverty. How far the Government goes to address the problems will be seen when Sunak addresses the House of Commons, and the nation, with his decisions.