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‘Pitiful’ Spending Review branded ‘a missed opportunity’ by charities

Charities have called for more support despite £394bn spending plans from the Comprehensive Spending Review

The lack of support for support for some of the UK’s most vulnerable people in the Government Spending Review has been described as “pitiful” by anti-poverty campaigners and a “missed opportunity” to reform housing.

While the Chancellor promised billions for house-building funds, job support schemes, local councils and environmental projects, there was a notable absence of increased help for those on benefits, many of whom don’t “have enough income to get by, let alone thrive,” said one charity leader.

Thomas Lawson, chief executive of anti-poverty charity Turn2US, blasted the “absence of any new policies” around social security and said the review does not go far enough to help the many thousands of people who are struggling to stay afloat; and will push more low-income households across the country into the grip of poverty.”

The Chancellor revealed that the UK will borrow £394bn in his Spending Review to counteract the economic impact of the coronavirus pandemic.

“The coronavirus pandemic is not yet over and the economic emergency has only just begun,” said Mr Sunak, announcing the plans. “Our immediate priority is to protect people’s lives and livelihoods.

“But today’s Spending Review also delivers stronger public services, pays for new hospitals, better schools and safer streets. And it delivers a once in a generation investment in infrastructure – creating jobs, growing the economy, increasing pride in the places we call home.”

Other spending promises include:

  • £254 million towards ending rough sleeping
  • A £7.1bn National Housebuilding Fund on top of the already announced £11.5bn Affordable Homes Programme
  • A 2.2 per cent increase to the national living wage, to £8.91, and a promised increase to the national minimum wage
  • A pay rise for NHS doctors and nurses, but a pay freeze for other public sector workers such as policeman, teachers and more
  • A guaranteed pay rise of at least £250 for 2.1m public sector workers who earn less than the median wage of £24,000
  • A new Levelling Up Fund worth £4 billion for England and £0.8 billion for Scotland, Wales and Northern Ireland. The fund will be available for local infrastructure projects and support economic recovery. 
  • A new infrastructure bank to catalyse private investment in projects across the UK
  • A £2.9bn Restart Scheme for “intensive and tailored support” to help people find jobs
  • £12bn in 2021/22 to help the UK reach net zero carbon emissions by 2050, including £92m to help plant 30,000 hectares of trees, capturing carbon & boosting biodiversity

Members of The Big Issue’s Ride Out Recession Alliance (RORA) had called for the £20 Universal Credit increase to be extended beyond April 2021. Sunak promised to return to the issue in the spring following questioning by Shadow Chancellor Anneliese Dodds.

Ella Abraham, Zacchaeus 2000 Trust’s policy and campaigns officer and campaigns co-chair of the Disability Benefits Consortium told The Big Issue that more needs to be done to let people living with a disability access the increase to Universal Credit.

“The Chancellor’s 37p a week ‘rise’ for those on legacy benefits is pitiful,” she said. “Over two million people, the majority of whom are disabled, continue to be refused the vital financial lifeline of £20 per week that those on Universal Credit have seen. And we know that those who haven’t had it have had to choose between heating, eating and medical treatment. That will be even worse this winter.

“We will be redoubling our efforts to persuade the Government to end this discriminatory two-tier welfare state and make sure everyone has the money they need to live on.”

The Chancellor has not risen to the challenge facing the nation

The Joseph Rowntree Foundation’s director Helen Barnard also called on the Chancellor to make the £20 Universal Credit increase permanent in “the strongest possible terms”.

She said: “There is no conceivable scenario in which this support will not be needed, and inaction risks a sharp rise in poverty.”

Overall, Barnard’s assessment of the Spending Review was that it fails to address the dire realities many people are facing. She added: “Behind the figures there are real families wondering how they will get through this winter and beyond.

“The Chancellor has not risen to the challenge facing the nation. In the here and now families need to know how they will pay for food, childcare and keep a roof over their heads.”

Polly Neate, chief executive of Shelter said the Spending Review “offered barely any hope for struggling families.”

“The Chancellor talked about the importance of home, but with no new money or urgency to build the social homes that so many are desperate for.

“Nor was there any reassurance that the welfare safety net will be there for people in their time of need. In fact, a red flag hidden in the small print suggests the government will freeze housing benefit next year, amounting to a real-term cut for families battling to keep up with rent.

“This was a missed opportunity to tackle our out-of-control housing emergency. You cannot defeat rising poverty or homelessness with courage alone.”

Our broken benefits system has left renters footing the bill for coronavirus

There were few announcements to boost renters either. Generation Rent director Alicia Kennedy said: “Rishi Sunak predicted today that unemployment would rise to 2.6 million, but did nothing to make the welfare system fairer for those reliant on it.

“Our broken benefits system has left renters footing the bill for coronavirus. To support renters who have lost income due to the economic shock of the pandemic, the Government must increase Local Housing Allowance to cover average rent, scrap the benefit cap, and make grants available for those who have built up unmanageable debt during the first wave.”

Sunak — who delivered a one-year Spending Review after scrapping plans for a three-year review due to Covid-19 uncertainty —  laid out a gloomy forecast for the economy and unemployment in the coming months and years.

You cannot defeat rising poverty or homelessness with courage alone

The economy has contracted by 11.3 per cent due to the impact of the Covid-19 pandemic, according to Office for Budget Responsibility, and is not expected to recover until the fourth quarter of 2022.

The OBR also forecasts that unemployment will peak at 7.5 per cent next year, meaning that 2.6 million people will be out of work.

Thomas Lawson of Turn2Us added: “There is an absence of any new policies to improve our inadequate social security system and enable people to have enough income to get by, let alone thrive. For a society that believes in compassion and fairness, the lack of commitment to maintaining the vital £20 uplift to Universal Credit will make it impossible for so many of us to get back on our feet.

“Our own research into people’s financial resilience shows how one in three of us have had to rely on credit since the pandemic took hold. We urge the government to prevent a rising tide of destitution.”

RORA member Nationwide Foundation’s calls for a renewed focus on the Community Housing Fund were also not heard by Sunak. Before the Spending Review, the foundation pointed out that for every £1 invested in community-led housing, the public benefit £2.70 over the following decade. 

Chief executive Leigh Pearce: “We are disappointed at the government’s decision not to renew the Community Housing Fund. As it stands, there are over 10,000 community-led homes that are awaiting funding, ready to be built in cities, towns and villages across England; many of which are in areas that the Levelling Up Fund is likely to want to reach.

“We’d call on the Government to include community-led housing so that groups across England can continue to build homes in the places they’re needed, at prices people can truly afford.”