Blog 26th October 2020

Oct 26th 2020, 13:26

Blog 26th October 2020

In this blog I consider Marcus Rashford’s campaign to extend free school meals, the financial crisis in local government, housing association finance, how to register a new housing association and webinars.

Marcus Rashford’s campaign to extend the free school meals scheme to school holidays appears to be gaining traction as well as attracting headlines. The campaign has gained support across the political spectrum and the housing and local government sectors. However, the government continues to refuse to provide funding while several local authorities have taken it upon themselves to extend the scheme locally and many charities are providing food banks and other support.

The ‘Guardian’ reports that at least 78 councils would be activating half-term food schemes, either by offering food vouchers or providing extra financial and logistical support to local food banks and charities.

County Buildings in Stafford where the County Council is based,

Staffordshire County Council (where I was Assistant County Treasurer in the 1990s) has decided to provide additional support to 18,000 children during half term. Councillor Mark Sutton (Conservative), the cabinet member for children and young people, told the ‘Guardian’ that:

“We know that times are hard for many families at the moment, with increased pressures on household budgets, so we wanted to help those in greater need to ensure that children can get a decent meal through the holiday.”

However, Councillor David Clifford (Conservative), the Leader of Rushmoor Borough Council, tweeted that:

“The shame is the day government rather than parents feed their children – if I were in need, I would go to our food bank – it works extremely well and not run by government.”

Emma Revie of the Trussell Trust (that provides 1,200 food banks that have seen a 61% increase in need during October) told the ‘Guardian’ that:

“Marcus Rashford’s campaign has been incredible, shining a light on the unbelievable compassion and generosity in our communities. But it is not right that anyone is having to rely on charity to put food on the table for their family.,, I hope that we can channel some of that compassion into longer-term solutions that go beyond the school holidays.”

I understand that the cost of extending the free school meals scheme would be £20million. This compares with the cost of the ‘eat out to help out’ scheme that provided a hundred million cut price restaurant meals at a cost of £522million and rising. Clearly the government feels that prosperous diners are more in need of financial support than children who are growing up in poverty.

Clearly the best solution to the problem of poverty would be for the economy to provide full employment with jobs that offered a living wage, while the state provided adequately funded benefits for people who are not able to work. Unfortunately, though, there does not appear to be sufficient political commitment anywhere to achieve this. In fact, the government is now moving in the wrong direction by removing the uplift on universal credit.

Meanwhile, the Ministry for Housing, Communities and Local Government has reported that levels of reserves for councils in England dropped by £900million in 2019-2020 to £23.7billion.

Paul Clarke, Deputy Director of Finance at the Barnet Borough Council told ‘Public Finance’ that:

“As a sector, there is obviously a funding challenge, because the scale of reserve usage of £900million is quite significant… Almost all types of local authorities have seen reserve reductions, and it's not surprising that all of the ones with social care responsibilities have gone down further… So, for me the real big thing is working with government towards a sustainable funding method for social care, because that is the key volatile budget within all of this.”

Overall service expenditure increased by 2% when adjusted for inflation. Adult social care services’ expenditure increased by 5.1% in 2019/20 to £16.9billion, an increase of £822million. Child social care services increased by as much as adult social care, with expenditure of £9.9billion, an increase of £476million.

Cumbria House in Carlisle where Cumbria County Council is based. In common with all local authorities, the Council faces financial pressures.

The County Councils Network told ‘Public Finance’ that:

“Today’s figures show that county authorities continue to use their reserves in help balance extreme demand-led pressures, most notably in children’s social care and special educational needs services. This is unsustainable going forward. Coronavirus has dramatically exacerbated this, and county authorities continue to face severe challenges going forward, not least in lost income from council tax. Therefore, the government must provide an uplift in funding to councils in next month’s Spending Review.”

There is clearly a financial crisis in local government, driven by coronavirus, increased demand for social care and austerity. In my work supporting the Local Government Association’s peer review scheme this is often apparent. However, the government responds with single year finance settlements that continue to reduce funding in real terms. I am holding webinars on local government finance (see below).

Last week I updated my popular briefing paper: ‘Introduction to Housing Association Finance (capital)’ to take account of recent changes to the affordable housing programme. The updated copy can be viewed or downloaded by clicking here.

I have just launched a new webinar: ‘'How to register a new Housing Association' that will be held on 10th December 2020.

There is increasing interest among charitable bodies, private landlords and others in registering with the Regulator of Social Housing as a Registered Provider (Housing Association). The advantages of doing this are:

  • Access to Social Housing Grant and S106 development
  • Exemption from stamp duty (also applies to charities)
  • Access to local authority referrals
  • Access to rent allowances rather than local housing allowance
  • Greater credibility with lenders and partners

Registration is a two-stage process with a preliminary application and a final application. To be successful applicants must convince the regulator that they have a robust business plan that will enable them to provide homes at below market rents to people with housing need. This webinar will consider how to prepare a robust business plan and the other information that is required by the regulator at both the preliminary and final application stages.

For further information or to make a booking, please click here.

We will be holding other webinars from September 2020 to January 2021 including:

  • Introduction to Housing Association Finance in England
  • Introduction to Housing Association Finance in Wales
  • Introduction to Local Authority Housing Finance in England
  • Introduction to Housing Association Finance in Scotland
  • Business Planning for Housing Associations
  • Introduction to Service Charges
  • Introduction to Local Government Finance in England
  • Business Planning in the Housing Revenue Account
  • Lifting the Lid on Local Government Finance
  • Introduction to Risk Management in Housing & Local Government
  • Introduction to Local Authority Housing Finance in Wales
  • Introduction to Local Authority Housing Finance in Scotland

For further information or to make a booking, please click here.

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