Chancellor Jeremy Hunt today delivered his Spring Budget, and – apart from an extension of the Domestic Energy Price Guarantee for another three months which will come as some relief to many people – there was little about housing.
The only directly housing-related material was the announcement that the government “will provide a package worth over £30 million to increase the capacity of the Office for Veterans’ Affairs, support veterans with injuries returning from their service and increase the availability of veteran housing”.
The sector has been quick to react to the budget. Rick Henderson, CEO at Homeless Link, said: “We are pleased the government has recognised the key role charities play in providing vital local services across the country. We wait to see how it will be managed, but the £100m for third sector organisations at risk is welcome and will help some organisations desperately struggling to make ends meet due to the pressures of long-term inflation.
“But rough sleeping has risen by 26% in the last year, while hundreds* of homelessness services are on the brink of shutting down and multiple local councils have announced plans to cut local homelessness budgets. At the same time, non-domestic energy bills are due to rise even further from April.
“The chancellor had an opportunity today to make sure people experiencing homelessness have safe support and accommodation to turn to, but he didn’t take it. Without a full inflationary uplift for homelessness support, hundreds of services could still shut down altogether, despite the extra funding announced today. Not only will this leave people experiencing homelessness with nowhere to turn for accommodation and support, but those already housed may face the trauma of returning to the streets.”
Commenting on the lack of support for renters in today’s Budget, Alicia Kennedy, Director of Generation Rent, said: “The cost of living crisis has hit private renters the hardest, with 50% being asked to pay more rent – on top of other bills going up. Evictions for rent arrears are at their highest level on record.
“The millions of people who rely on the benefits system to cover their rent are being squeezed more and more, with Local Housing Allowance frozen since 2020 but rents having risen in that time by 8% nationally.
“The chancellor had an opportunity today to provide some respite by relinking Local Housing Allowance to market rents. But this inaction means we will see more people get into debt and face homelessness.”
Cllr James Jamieson, Chairman of the Local Government Association, which represents more than 350 councils across England and Wales, said: “It is good that the chancellor has acted on council calls for funding and measures to widen employment support, improve local roads, protect swimming pools from rising costs and funding for vital regeneration efforts. Lower borrowing rates for councils will also provide a boost for vital council housebuilding projects.
“A third round of levelling up funding will give councils the opportunity to forge ahead with ambitious plans to transform their communities and unlock potential for more local growth. However, we remain clear that levelling up should be locally led by evidence of where crucial investment needs to go to, not based on costly competitive bids between areas.
“Given this is a ‘back-to-work’ Budget, it is disappointing there is no further investment in adult social care, public health and children’s services, which all play a vital role in supporting economic growth and helping people back into work, alongside boosting people’s health and wellbeing.
“We are pleased the government has acted on our calls for investment in early years education and childcare. Councils have a duty to ensure sufficiency of local provision and so will need to be given a key role in making sure they succeed. Delivering on today’s announcements will also require significant investment into the workforce and early years’ facilities.
“Every local economy is different, and people can find themselves ‘economically inactive’ for different reasons. With control over fragmented and disjointed national employment and skills funding and schemes, councils could build on their track record of helping get people back into the workplace – including those who are furthest from the jobs market – and plugging growing skills gaps.
“We want to work with government on a long-term funding plan which ensures councils have adequate resources to deliver local services for our communities. Alongside sustainable long-term investment in local services, bringing power and resources closer to people is also key to improving lives and building inclusive growth across the country, and many more places are ambitious to follow in the footsteps of the devolution trailblazers which are a positive step towards more local decision making.”
Rachelle Earwaker, Senior Economist at the Joseph Rowntree Foundation, said: “The chancellor has made some steps towards tackling some of the issues which have affected families on low incomes over recent years, but we have to be clear – the difficult years are far from over. It will take a much more fundamental shift for our economic and political system to provide the good jobs, social security system and homes that we all need.”
“Inflation may have stopped escalating, but with food prices rising at over 16 per cent this year and 2021-23 seeing the largest successive two year inflation increase since 1979-81, many families are seeing no evidence of the chancellor’s reasons for optimism. Prices have not started to come down, nor does optimism offer comfort to the 7.2m families unable to afford essentials.
“The glaring omission from the speech of any action to tackle the housing crisis, despite the OBR forecasting a drop in housebuilding in the coming years and higher mortgage rates and soaring rents putting pressure on households, is short-sighted and means the chancellor is ignoring a growing and serious economic challenge.”
Lee Bloomfield, chief executive of Manningham Housing Association, said: “Shortly after the chancellor sat down, the independent Office for Budget Responsibility announced that living standards are expected to drop by 6 per cent in the current financial year and next – the largest fall since records began in the 1950s.
“With inflation predicted to stay relatively high by modern standards for the rest of this year and with personal taxation allowances not going up in April, this Budget provides little comfort for those on the lowest incomes.
“After the disastrous Budget last autumn, Jeremy Hunt had little money left to give away.
“However, it is notable that the only permanent tax cut he announced – costing £1 billion a year – was scrapping the lifetime allowance on tax-free pension contributions which only helps those on very high incomes.
“The extension of the freeze on energy bills for another three months is welcome but bills will not come down despite the wholesale gas price falling significantly.
“There was little on levelling up, nothing on building more affordable homes and, other than floating the idea of creating an investment zone in West Yorkshire, no new funds for Bradford despite previous promises of help, particularly around transport infrastructure.
“It is difficult to see what there was to cheer for the communities Manningham Housing Association is proud to serve.”
In a statement, the National Housing Federation said: “People on the lowest incomes in this country are being hit hardest by the rising cost of living and a worsening housing crisis. We are pleased to see that today’s Budget recognises the critical need for families to have further support with rising energy bills after April.
“However, even with the Energy Price Guarantee in place, energy costs have doubled in the past year, and it is predicted this could force 7.5 million households into fuel poverty. We urge the government to consider a social tariff for those on the lowest incomes in the longer term.
“We have some of the oldest homes in Europe and many towns and cities across the country are in need of serious investment. The £750m of regeneration funding is welcome, but more investment could be targeted at improving the quality and energy efficiency of the country’s homes, which would contribute to both energy security and achieving our net zero goals, as well as helping to level up left behind communities.
“We also look forward to hearing more detail about the proposed Investment Zones, and we want to work with the government to ensure that building affordable homes is central to creating prosperous communities.
“Following the devolution deals with Greater Manchester and the West Midlands, we look forward to working closely with these areas to ensure we are building the affordable homes that are needed for local communities. We also welcome further funding towards homes for veterans, which will help housing associations provide specialist homes and support.”
Chartered Institute of Housing (CIH) chief executive, Gavin Smart said: “We’re pleased to see the government taking action to support people with high energy bills, by bringing charges for pre-payment meters in line with direct debit customers and extending the current Energy Price Guarantee at the current rate for a further three months. CIH called for this as part of the End Fuel Poverty Coalition. We would however have liked to have seen more support for energy efficiency measures, helping to tackle some of the root causes of current energy pressures.
“Housing was notable by its absence. We are disappointed that the Chancellor did not use this opportunity to restore local housing allowance to the 30th percentile, as we and others had called for. The decision to leave rates frozen at 2020 levels means the affordability gap for private renters will continue to grow, resulting in increased evictions and homelessness. We would urge government to urgently look again at this, particularly given its commitments on homelessness prevention.
“We note that various changes were announced on welfare. We await the details in this in the forthcoming White Paper and will provide further briefing for members on Budget announcements over the coming days.”