Mar 4th 2020, 13:58
Blog 4th March 2020
In this blog, I refer to: The Coronavirus pandemic and its implications for public services in Britain; Budget 2020; the cost of meeting fire safety requirements in flats following the Grenfell fire; NHS; Education; Police; the Guardian; Public Finance; the Times; Rishi Sunak; OBR; CEBR; Risk Management; World Health Organisation; Global Health Security Initiative; European Centre for Disease Prevention and Control; National Housing Federation; London & Quadrant HA; Housing Finance; Training & Seminars.
Yesterday, the government revealed its plans for dealing with the ‘Coronavirus’ pandemic that is now expected. They state that:
“The current data seem to show that we are all susceptible to catching this disease, and thus it's also more likely than not that the United Kingdom will be significantly affected… It is possible that up to one fifth of employees may be absent from work during peak weeks… The pressures on services and wider society may start to become significant and clearly noticeable”
I will not comment on the medical aspects of the pandemic, but the impact on public services will clearly be significant, potentially including:
Today, the ‘Public Finance’ magazine and the ‘Times’ are reporting that Coronavirus will restrict the budget choices available to Rishi Sunak, the Chancellor of the Exchequer, in advance of his budget on 11th March. It is reported that the Office for Budget Responsibility will alter its forecasts to reflect the economic implications of the outbreak.
A recent study from the Centre for Economics and Business Research suggests that should London go into full lockdown, its output would fall by £495million a day; if it lasted a week, the economy could lose £2.4billion in output, and if lockdown was imposed for a month, this could rise to £10.3billion. This is not good news for a British economy that is already struggling to grow.
Reduced tax revenues due to a reduction in Gross Domestic Product caused by restrictions on trading and high levels of absence due to sickness; and increased public expenditure to manage the pandemic and to stimulate the economy; would result in increased borrowing. This is not good news in view of the already high level of public debt.
The government states that:
“The UK government and devolved administrations, including the health and social care system, have planned extensively over the years for an event like this.”
All of us who have been involved in risk management will recognise Coronavirus as one of those risks that falls into the unlikely to occur but potentially catastrophic category. Contingency plans are made for such risks in the hopes that in practice the risk will not actually occur. As a Coronavirus pandemic does now seem inevitable, the risk management strategies of the United Kingdom government and all public agencies will be severely tested.
The pandemic also underlines the fact that we live in an inter-connected world. No amount of ‘taking control of borders’ can protect people from pandemics. Instead, international action is required. International organisations such as the World Health Organisation, the Global Health Security Initiative and the European Centre for Disease Prevention and Control are important. Also, action is required to improve public health across the globe.
Meanwhile, the National Housing Federation has revealed that social landlords are facing a bill of at least £10billion to solve fire safety problems made apparent the fire at Grenfell Tower and that affordable housebuilding programmes and services to tenants are therefore in jeopardy.
Landlords have discovered that scores of their blocks are wrapped in combustible materials and suffer from safety flaws that under new government guidance must be resolved to ensure the safety of their six million residents. The cost is at least 25 times greater than the £400million budgeted for so far by ministers for housing associations to remove Grenfell-style cladding.
Kate Henderson, the Chief Executive of the National Housing Federation, said that:
“Housing associations are doing everything they can to make their buildings safe as quickly as possible… However, following the latest advice from the government, the potential costs of this huge programme of work are spiralling… We are calling on the government to provide a building safety fund to cover the upfront costs of these essential works, so they can be carried out quickly and efficiently. Without this funding there is likely to be a detrimental impact on housing associations’ ability to build much-needed new affordable homes and provide services to their residents and their local community.”
The National Housing Federation will write to the Rishi Sunak, the Chancellor of the Exchequer, calling for urgent funds in the March budget.
Last month, one of the country’s largest social landlords, London & Quadrant, said it was halting the purchase of new land and would defer work on projects beyond its existing commitments. It has earmarked £250million to spend on fire safety works on its existing estate.
The fifteen largest London housing associations have estimated they face a £4.3billion bill that could result in them building tens of thousands fewer new houses.
However, the government has repeatedly resisted calls to spend more on solving fire safety problems. It has committed to fund only the removal of the specific type of aluminium composite material (ACM) panels used on Grenfell arguing these present the greatest safety risk. However, it will not fund the removal of other combustible materials even though fires have destroyed wood and high-pressure laminate facades in blazes in Barking and Bolton.
Our next seminar ‘All You Want to Know about Local Authority Housing Finance’ will be held in London on 17th March 2020. This is a very useful introduction to, and overview of, local authority housing finance. For more information or to book a place, please click here.
Our seminar ‘All You Want to Know about Housing Association Finance’ will be held in London on 21st April 2020. For further information or to make a booking, please click here.