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Was the budget a missed opportunity?


Patrick Mooney, News Editor


With the Chancellor of the Exchequer Philip Hammond repeatedly saying that the age of austerity is coming to an end, many of us were expecting further positive changes to Government policies to build upon the recent spate of good news for social housing. Perhaps the biggest litmus test was whether the Chancellor was going to sort out the benefit payments mess (known as Universal Credit) which is affecting huge numbers of people across the country, as well as their landlords in both the private and social rented sectors. The new benefits system has been beset with difficulties since its introduction, but its importance is demonstrated by the forecast that 8.5 million people will be in receipt of Universal Credit by 2023. That’s about 12 per cent of the entire population. In what was hailed as a generous concession, the Chancellor announced an extra £1 billion will be paid over five years to help existing claimants who are moving on to UC in the near future. A sort of transitional relief to cushion them from other planned benefit cuts. He also announced a £1,000 increase in the amount people on UC can earn before losing any benefits, at a cost to the Treasury of £1.7 billion a year. Hammond claimed the changes – which are reversing much (but not all) of the benefit cuts made in previous Budgets - would make 2.4 million working people and people with disabilities £630 a year better off. These are welcome, but they are not as generous as some of the other tax allowance changes he announced. Lifting the higher rate of tax up to £50,000 means the gap between rich and poor will grow wider. (This looked suspiciously like a pre-election tax giveaway!)


FURTHER SLIPPAGE He also said that UC is here to stay – something that will have disappointed a great many people, although the timetable for its full roll-out appears to have slipped once again – this time by a further six months to December 2023. Nothing was said about the increased use of food banks in areas where UC has already been rolled out and it remains to be seen if the extra cash will be enough to see off further backbench rebellions in the Commons. Intruigingly some research bodies like the Resolution Foundation have already pointed out that other planned cuts to benefits (announced in the 2015 Budget) are still due to take effect from next year, so what the Chancellor gave with one hand at the end of October he will probably be taking away from people on low incomes come next April! MPs from all parties want the proportion of claimants who are paid in full and on time to be significantly improved. They are also want the roll-out of UC paused so a full review of the system can be carried out and changes made, ensuring the Government’s flagship welfare policy becomes ‘fit for purpose.’ Elsewhere, the Budget contained a plethora of announcements many of them designed to give a further stimulus to the housing market. The abolition of Stamp Duty for all first-time buyers of shared ownership properties valued up to £500,000 was unexpected, as was his decision to back date it to the previous Budget. He also extended the Help to Buy scheme by a further two years to 2023, but this will only benefit first time buyers and housebuilders like Persimmon. Potentially the most significant step was making £500 million available for the Housing Infrastructure Fund, which the Chancellor says will enable a further 650,000 homes to be built. There was good news in the shape of new partnerships with nine housing associations to deliver 13,000 new homes and guarantees of up to £1 billion for smaller house-builders.


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BAD NEWS Sadly some of the gloss was removed by analysis from the Office for Budget Responsibility who estimated that the number of homes built as a result of the HRA borrowing cap being scrapped, will only amount to 9,000 new homes by 2023/24. Although they think councils will build an extra 20,000 homes over the next five years, they estimate that housebuilders and HAs will build fewer homes over the same period. Also on the down side, the Chancellor announced that lettings relief is to be limited to properties where the owner is in shared occupancy with the tenant. This will have a negative effect on the buy- to-let market and could prompt more private landlords to abandon the rental sector altogether. Where their tenants will go is anybody’s guess. It was regrettable that no new money was found to pay for the retro-fitting of water sprinkler systems in all residential tower blocks. This single move would greatly improve the safety of residents of high-rise blocks and complement the programme of removing flammable cladding. Council leaders were understandably disappointed that the Chancellor did not announce a temporary suspension of the Right to Buy, nor did he provide any new funds to tackle homelessness or the rising number of empty homes. Overall there were some welcome changes in housing and welfare policies but we still need a clear and coherent strategy for housing overall and one that can withstand Brexit and a possible change of Prime Minister and Chancellor. Above all we need the Government to demonstrate a proper understanding of why the housing market is broken and the commitment to fix it.


HOUSING MANAGEMENT & MAINTENANCE


11.18


PM’s tonic for social housing


UC hit by further delays


Combustible materials


cladding ban


Homeless deaths scandal


Calls for RTB changes


On the cover... The Courtyard, University of Hull


Patrick Mooney


Combining a robust design and excellent acoustic properties, aluminium windows from Senior Architectural Systems have been specified for several new projects in the student accommodation sector


4 | HMM November 2018 | www.housingmmonline.co.uk


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