Still waiting for the end of austerity

Originally posted on September 4 on my blog for Inside Housing.

Austerity may be over, according to the chancellor, but it remains to be seen what that really means for the spending programmes that matter most to housing.

What Sajid Javid meant by that boast in Wednesday’s Spending Round speech was that all departmental budgets will be increased at least in line with inflation in 2020/21.

But it soon became clear – if it wasn’t already – that housing is not one of the so-called ‘people’s priorities’ of crime, education and health and so does not qualify for any headline-grabbing investment.

The only housing-related announcement in the speech itself was a £54m increase in funding for homelessness and rough sleeping to £422m in 2020/21, which Mr Javid said amounted to a 13% real terms increase.

That’s just as well because both the speech and background document were completely silent on what the government intends to do about one of the biggest drivers for homelessness.

The four-year freeze in working-age benefits including Local Housing Allowance (LHA) comes to an end in April 2020 but this Spending Round brought no confirmation of increases to come, let alone a reversal of the previous cuts.

Instead, the only announcement on housing benefit in the Spending Round is an extra £40m in funding for Discretionary Housing Payments, the all-purpose sticking plaster to mitigate the effect of the cuts, in areas with affordability pressures in the private rented sector. Why would you need more DHPs if you plan to reverse the freeze?

Research published by Crisis this week as part of its Cover the Cost campaign said that it would cost £3.3 billion over three years to restore LHA rates to cover the cheapest third of private rents, including £820m in 2020/21, but that this would deliver net benefits of £2.1 billion in recued homelessness and poverty.

But any decision on that looks like it has been left until the Budget next year, when much of the Chancellor’s room for manoeuvure has already been taken by announcements made today.

The silence on the LHA only adds to the uncertainty reflected in the response by a government spokesperson to the Crisis report that ‘there are no current plans to maintain the benefit freeze after March 2020’ and that specific decision on uprating will be made in due course.

The only other announcement on housing in the speech and the thinnest background documents to a spending or Budget statements that I can remember is an extra £24m for the Building Safety Programme.

That’s on top of the existing £600m funding for removal of ACM cladding in the private and social sectors but this money is for funding the government’s response to the Hackitt review, not further remediation work.

Unlike with previous Budgets, there was no accompanying report from the Office for Budget Responsibility to fill in the blanks left by the speech and background documents.

The Spending Round leaves capital budgets for 2020/21 the same as those set in the 2015 Spending Review but with additional funding to support commitments on healthcare, policing and prisons.

An announcement on ‘ambitious plans for future capital spending’ will follow later in the Autumn and include publication of a National Infrastucture Strategy.

In his speech, Mr Javid promised ‘nothing less than an infrastructure revolution’, but don’t hold your breath about housing counting as infrastructure.

In summary, this Spending Round tells us little we didn’t already know about housing’s place in the overall pecking order and nothing about the balance the government intends to strike between social housing and home ownership.

But perhaps it was unrealistic to expect anything beyond today’s thin gruel with an election in the offing and Brexit dominating everything.

The rhetoric may (again) all be about austerity being over but for anyone waiting for a home, struggling to pay their rent or stuck in temporary accommodation the reality will have to wait.

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