Housing, social care and universities: who lost the UK budget?

RAchel Reeves’ first budget placed an emphasis on raising taxes to help the NHS as the health service tries to cope with huge waiting lists and an aging population. Funding the NHS was a top priority, but people in other sectors – from universities to social care – feel the budget was a missed opportunity to tackle looming crises or implement much-needed reforms in their areas.

Social care

Experts have long warned that it will be difficult to fix the NHS without tackling the crisis in social care, where councils in England and Wales are struggling with meager budgets and staff shortages. Local authorities received a £600 million cash injection for social care, which the Local Government Association said would help “cope with some – but not all – of the significant pressures on adult and children’s social care and homelessness support ”.

But there was no word from the government on broader reform of the system, which is likely to be needed in the longer term. The Health Foundation think tank said: “While we welcome the additional £600 million for social care and care benefit reforms, the continued silence on wider social care reforms is disappointing.”

The sector will also be hit hard by the increase in employers’ national insurance contributions, with the Liberal Democrats calling for social care to be exempt from the increase.

Child poverty

One of the biggest demands from Labor MPs since taking office has been overturning the UK’s limit on two child benefits, which contributes to child poverty. Reeves made no mention of any ambition to scrap it in her budget speech, despite privately wanting to make the change. Campaigners would have liked to see a greater Gordon Brown-style focus on lifting children out of poverty. Her speech made scant mention of child poverty, apart from a short paragraph on the impact of reducing the level of excess payments that can be extracted from universal credit. In its response to the budget, the SNP called on the Labor government to take “emergency action” to tackle child poverty, with the Resolution Foundation think tank warning that a further 63,000 children will be affected by the cap by April two children.

A letter to the Guardian from former Labor leader and independent MP Jeremy Corbyn, along with Green party co-leaders Adrian Ramsay and Carla Denyer, Plaid Cymru MPs and others on Thursday called on the government to do more to lift the of the two-child benefit ceiling, reverse the withdrawal of the winter fuel surcharge, introduce wealth taxes and create a new Green Deal. “Labour is increasing defense spending to 2.5% of GDP, while telling us there is no money to lift 250,000 children out of poverty. This is a lie. There is plenty of money, it’s just in the wrong hands,” they said.

Mental health

Mental health charities in England and Wales were disappointed with the budget. Dr. Sarah Hughes, Mind’s chief executive, said it had “not delivered the changes needed to help create a mentally healthier nation”. Although the budget included funding for mental health crisis centres, the charity had urged more help to prevent people reaching crisis point, pointing out that mental health care accounts for 20% of all ill health, but only 10 % of NHS spending receives. The sector is also concerned about cuts to sickness benefits, as rising costs have partly been driven by worsening mental health. Details about possible changes to benefits have yet to be announced.

Universities

Before the Budget, there were widespread stories that the government was planning to allow a rise in tuition fees or reform of the system in England. This did not become reality, but it was implicit in the figures that they would be allowed to rise with inflation from next year. That will provide some relief for university chancellors, but at the same time institutions will have to swallow higher national insurance bills. It appears wider reforms will have to wait, even though the sector is on “Sue’s shitlist” – a supposed risk register drawn up by former chief of staff Sue Gray before the election that highlights potential crises in the early months of a Labor government emphasized. Universities are concerned about their funding situation as inflation has run high, tuition fees have been frozen for so long, and there have been long-standing warnings that individual institutions could go bankrupt.

Difficulties in housing

Some charities had called for the freeze on local housing benefit across Britain – which determines the level of housing benefit – to be released, but the Chancellor did not agree. The Joseph Rowntree Foundation said private renters would feel “let down by the choice to keep local housing benefit frozen, meaning it will be even further out of step with local rent levels, which have soared in recent years increased”.

The Women’s Budget Group think tank said: “The reintroduction of the local housing benefit freeze is deeply disappointing for the hundreds of thousands of families struggling with temporary accommodation or facing eviction. The cost of private rent has risen, absorbing an increasing share of women’s income – with the housing affordability gap between men and women widening in the past year. The average rent for a one-bedroom home in England now takes up 47% of a woman’s average income, up from 36% last year, compared to 34% and 26% respectively for men.^”