Spending Review | Funding package will provide more certainty for councils

Spending Review | Funding package will provide more certainty for councils

Chancellor announces increase in spending power for local government and package to provide more certainty for councils about how local services will be funded next year, however beyond the £54m of new funding targeted at reducing homelessness and rough sleeping, there was little reference to housing. LABM garners upon to the Spending Review.

LGA welcomes £3.5bn funding package
Responding to the Government Spending Round, Cllr James Jamieson, Chairman of the Local Government Association, said: “We are delighted that the Spending Round has delivered a funding package of more than £3.5bn for our vital local services next year. 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.

“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 £1bn for social care and £700m 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 allow them to 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 £500m 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.

“It shows that the LGA is successfully making the case that investing in local government is good for the nation’s prosperity, economic growth and the overall health and wellbeing of the nation. With the freedom and funding to make local decisions, there is clear evidence that outcomes for the nation improve and the country gets better value for money.

“We are ready to work with the Government on how a forthcoming Queen’s Speech can spark the radical legislative programme that will reignite the devolution process so councils can continue to lead their local areas and improve the lives of their residents.”

£54m to tackle rough sleeping welcomed, but lack of long-term additional funding settlement for housing disappointing says CIH
Responding to the announcement of a one-year spending settlement by Chancellor Sajid Javid, CIH‘s Chief Executive Terrie Alafat commented: “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.

“We welcome the additional £54m the Chancellor announced to tackle rough sleeping. CIH has previously called for more money to help councils meet their legal obligations.

“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.

“On one area, however, the Chancellor was silent — and that was welfare.

“While the additional £40m for discretionary housing payments will be helpful, it will not make up for the effects of the freeze on local housing allowance, which continues to cause misery.

“A staggering 97% of private rents in England 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 £1bn 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.

“Given the huge problem facing councils in meeting social care needs the additional £1bn is welcome. There will also be a consultation on whether councils should be allowed to raise an extra £0.5bn, though this would put the onus on councils to increase council tax, and we are concerned that the areas that need this extra help the most may be those least able to meet that cost.

“Given the huge role housing plays in supporting effective care, we are disappointed the Chancellor failed to mention housing in this context. We still don’t have a sustainable plan for funding support services. This causes real problems for landlords and service providers and does not create an environment in which organisations will invest in new supported housing. But more importantly this chronic uncertainty should not be a feature of the lives of some of our most vulnerable fellow citizens.”

Housebuilding and a new retrofit strategy must form part of the Government’s ‘infrastructure revolution’, says the Federation of Master Builders (FMB)
Brian Berry, Chief Executive of the FMB, said: “The housing crisis is undermining the British economy. 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 £241m 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 concluded: “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 £400m 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. Today’s Spending Round set the scene for a positive outlook for builders, but we need more details about how more new homes will be delivered.”

Increased funding for police, social care and NHS welcomed, however more investment needed for housing
John Bruton, Executive Director – Finance at Stonewater, said: “In politically uncertain times, Stonewater welcomes the increased funding for the police, social care, education and NHS outlined in the Spending Review. While marking a significant increase in public spending and being billed as ‘an end to austerity’ by Chancellor Sajid Javid, there was little reference to housing beyond £54m of new funding targeted at reducing homelessness and rough sleeping.

“This is despite the National Housing Federation’s (NHF) submission to the Comprehensive Spending Review suggesting that, to deliver the 145,000 affordable homes the country needs each year, there needs to be an annual investment of approximately £12.8bn. Even with the current level of investment by the Government, which has recently seen an additional £1bn made available for its Homes England strategic partners, the levels still fall short of what’s needed to truly address the national housing crisis.

“Good-quality, affordable homes are the foundation for strong communities. It is well recognised that housing is directly linked to the positive outcomes for health, education, justice, welfare and other public services. At Stonewater, we are therefore pleased to hear that local councils will receive £1.5bn for social care next year, making the overall departmental spending on local authorities the largest increase in local government spending power since 2010.

“In addition to this, for many of our customers, Universal Credit has been an overwhelming concern. We hope the Chancellor’s decision to allocate £23m to fund a range of other measures, including support for vulnerable claimants and people with complex needs, as well as additional outreach activities, will help mitigate some of the issues.

“Ahead of the Spending Review and Brexit, Stonewater has been working hard to prepare for a range of scenarios. As a leading social housing provider, Stonewater, has an important role to play in tackling the housing crisis and while we have established good momentum in creating as many much-needed homes as possible, it is imperative that this is maintained.”

Government support for offsite manufacturing essential to ending housing crisis
Dave Sheridan, Executive Chairman of ilke Homes, said: “Delivering homes to the places that need them is priority number one, and this cannot be done without government investment. The Chancellor’s pledge to increase funding for Homes England is a welcome one, but to meet the Government’s targets of building 300,000 homes a year, collaboration between the public and private sector is crucial.

“Further investment into the modern methods of construction will be vital to delivering high-quality homes at speed. The previous government demonstrated their support for offsite manufacturing and the opportunities it poses in diversifying the supply chain and creating new jobs, easing the strain that the skills shortages has engendered. Gaining the support of this government will be fundamental to ending the housing crisis, and whilst increasing funding for Homes England is a good start, there is much more to be done.”

Header image ©chbaum/AdobeStock.

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