Spring Budget fails to address ‘damaging’ impact of welfare reforms

Mary Taylor
Mary Taylor

The Scottish Federation of Housing Associations (SFHA) and the Scottish Government have accused Chancellor Philip Hammond of failing to alleviate the welfare cuts that the UK government is directing at some of the most vulnerable people in society.

Delivering his Spring Budget to the House of Commons yesterday, the Chancellor committed an extra £350 million of funding to the Scottish Budget as a result of Barnett consequential – with the resource budget increasing by £260m in the period to 2020 and the capital budget increasing by £90m to 2021.

However, with no new announcements in respect of welfare reform measures, the SFHA has warned the cash will do nothing to alleviate the hardship facing thousands of Scots ahead of April’s Universal Credit roll-out.

Mary Taylor, chief executive of SFHA, said: “SFHA welcomes the increase in capital investment in Scotland, of which housing is a key component. The Scottish Government has committed to increase investment in affordable housing in order to build 50,000 homes, 35,000 for social rent, over the next 5 years so this is a welcome boost.

“Although no further welfare cuts have been announced, we are aware that in April we will see the child element of Universal Credit being limited along with the Individual Child Element of Child Tax Credit to two children, and the removal of entitlement to housing support for 18-21-year-olds.

“Those affected will be new claimants for Universal Credit in “full service” areas, and for them it will have a potentially catastrophic effect. They will not be eligible to apply for Discretionary Housing Payments (DHP) - which have been used to mitigate against UK government welfare cutbacks. We urge the Scottish Government to implement mitigation measures, as was pledged in the SNP election manifesto.”

Mary Taylor added: “We must remember the impending impact of cuts that have already been made. 2017/18 will see the first full year of the reduced benefit cap, which was lowered from £26,000 to £20,000 from November 2016. Sheffield Hallam University estimated 11,000 households in Scotland will be affected by the cap, many of whom will be families with three or more children. It seems certain that as a consequence there will be an upsurge in child poverty. The Scottish Government has made an enhanced DHP allocation, from £50.2 million in 2016/17 to £57.9 million in 2017/8, but this will not fully mitigate the problem in the way that was made possible for the bedroom tax.

“Housing policy – devolved to Scotland – is moving increasingly further apart from welfare policy – reserved to Westminster. Whilst Scottish legislation on social housing gives access to a decent home at a modest rent in the social rented sector, Westminster’s approach to social security is making it increasingly difficult for people to pay for it.“

Derek Mackay
Derek Mackay

Finance secretary Derek Mackay said that despite the “limited” increases in funding for Scotland, the Budget plans confirm £2.9 billion of cuts to the Scottish budget over ten years.

Mr Mackay said it will hit Scottish families and provide absolutely no detail of how he plans to steady the economy in the wake of the UK government’s plans for Brexit.

The Chancellor also failed to alleviate the welfare cuts that the UK government is directing at some of the most vulnerable in our society or to lift the prospect of a further £3.5bn of cuts to public spending in the years to come, he added.

Mr Mackay said: “The Chancellor has confirmed a real terms cut to the Scottish budget of 9.2% between 2010/11 and 2019/20. While I welcome the additional Barnett consequentials that were announced today, no one should think that this budget provides an end to austerity from the UK government – in fact there is still a further £3.5bn of cuts to come.

“On top of that the Chancellor continued with the UK government’s damaging welfare cuts that will make many vulnerable and low income households worse off.

“The real elephant in the room in this budget was Brexit. There was no mention of the UK government’s plans to protect and grow the UK economy as the Prime Minister gets ready to trigger Article 50. This is simply not acceptable. Brexit is a real threat to people across Scotland in so many ways. The Chancellor must tell us his plans.”

Meanwhile the Scottish Government has launched a new campaign to raise awareness of how people can claim the benefits they are entitled to.

A week-long series of radio and press adverts will run to highlight the range of support available - such as the Sure Start Maternity Grant, Carers Allowance and the Funeral Expenses Payment.

It is estimated that, in 2014/15, for tax credits and the main income-related benefits, there could be over 500,000 cases of individuals or families in Scotland not claiming benefits they were entitled to.

Jeane Freeman
Jeane Freeman

Social security minister Jeane Freeman said that the benefits system exists to help those in need and on low incomes and that people should not be worried about claiming what they are entitled to.

Ms Freeman said: “Claiming the benefits that people are entitled to will help maximise family incomes and can reduce poverty levels. For example, around a third of pensioners are entitled to Pension Credit but do not claim it. We want to help people to know what financial support is available that could make a difference to their lives.

“We also know that personal circumstances can change very quickly – whether it’s losing a job, a family bereavement, becoming a carer for a family member, or having a child.

“The evidence tells us that often many of us don’t realise that changes in our lives can mean we are entitled to additional support and that there is a range of benefits all of us are entitled to know about.

“Many of us will need that financial support at some point in our lives, whether we’re in work or not. So we all have stake in ensuring everyone is looked after properly and the social security system exists to help and support those who need it, when they need it.

“Making sure that everyone receives the financial help they are entitled to is one of the first steps towards putting dignity and respect at the heart of social security policy in Scotland.”

The Scottish Government is working with the Citizens Advice service in Scotland, who is providing a dedicated web page with all available information on benefits and tax credits, eligibility and how to access them, as well as a freephone benefits helpline (0800 085 7145).

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