Nov 27th, 11:34
Blog 27th November 2017
In this week’s blog, I refer to: Budget 2017, Philip Hammond MP, Housing, Welfare, the National Health Service, Public Services in Wales, Service Charges, Long-term supported housing, funding supported housing and the local authority investment code.
Philip Hammond, the Chancellor of the Exchequer, unveiled his 2017 budget last Wednesday.
The underlying position of the United Kingdom economy is weak. This leaves the Chancellor wanting to increase expenditure to stimulate demand at a time when public debt is high, there is already a deficit, productivity is low, ‘Brexit’ is causing ‘uncertainty’ and projected growth in revenues is low.
As expected, housing was the focus of the budget with an additional £44billion for housing investment being announced. However, few details were announced and the objective of building 300,000 new homes a year has been deferred until the 2020s. Furthermore, with increasing constraints on the ability of the private sector to deliver new homes it is possible that increased funding for home ownership schemes will simply inflate house prices further.
There is also a limited scheme under which councils can apply to have the ‘borrowing cap’ raised to enable borrowing to fund new build that starts in 2019/20.
Some additional resources were made available for welfare with £1.5billion allocated to addressing some of the problems that have been identified with Universal Credit. However, no plans were announced to relax the ‘benefits freeze’ despite the increase in inflation.
The additional funding for the National Health Service is modest and falls short of the amount that has been requested by National Health Service managers. There was no mention of funding for adult social care, but this will presumably be addressed in the local government finance settlement that will be announced soon.
I have written a briefing paper that summarises the budget with reference to its implications for public services and provides some commentary. It includes the following sections:
"Thanks, Adrian: prompt and impressive analysis, as ever."
And a Housing Manager in a London Borough Council emailed me to say:
"Thank you – the Budget paper is very useful."
We have just published the December 2017 edition of the ‘AWICS Wales News’. It includes articles on:
One of the subjects that is covered in the newsletter is service charges with an article on service charges in Denbighshire County Council and an article on supported housing and how it is funded through rents and service charges. Our next seminar is on: ‘All You Want to Know about Service Charges in Social Housing in Wales’. It will refer to all recent developments.
We are also holding a session of ‘All You Want to Know about Service Charges in Social Housing in England.
In my briefing paper on the government’s recent policy statement and consultation paper on the funding of supported housing (that I published last week); I comment that long-term supported housing for working age people including exempt and specialist housing is dominated by private sector providers that often make significant capital investment in schemes that are then let to registered providers to manage. Costs tend to be higher in long-term supported housing than in other parts of the sector. However, the government is not proposing significant change in this part of the sector and its only comment on ‘value for money’ is a statement that it will seek greater cost control while driving up outcomes.
Later today I will be meeting with a private landlord who provides long-term supported accommodation for vulnerable groups in partnership with local charities and who wishes to register with the Homes & Communities Agency as a registered provider. I do not think this landlord will be alone in considering taking this step.
Successive governments have urged local authorities to become more commercial in their approach and to find new streams of income to replace funds lost through reductions in central government funding and restrictions on council tax increases. Many councils have responded by making investments to generate an income. However, the Department for Communities & Local Government has recently published a consultation on revisions to the Local Authority Investment Code. The effect of these proposals would be to make it near impossible for authorities to borrow to invest in income generating property investments outside their area. Another example of initiative and innovation in local government being stifled by the dead hand of Whitehall bureaucracy?
It is often said that there are no good jokes about local government, but I did come across one recently. It goes as follows:
A man telephones the Council and asks: ‘Can I have a skip outside my house?’ The Council officer replies: ‘Of course you can, you can skip or dance anywhere you like in the borough!’