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Charities react to Osborne’s austerity vision

28 June 2013

PA

PEOPLE without a job will be required to wait seven days before they can claim benefits, attend a jobcentre once a week, and, if they do not speak English, attend language courses, the Chancellor, George Osborne (above), announced on Wednesday.

Outlining the Comprehensive Spending Review, setting out how government spending would be divided between departments, Mr Osborne said that his decisions had been made on the principle of fairness, "ensuring those with the broadest shoulders bear the largest burden, and making sure that the unfairness of the something for nothing culture in our welfare system is changed".

In total, Mr Osborne announced £11.5 billion of spending cuts, necessary, he said, to ensure that Britain's economy continued "moving out of intensive care". In addition to the changes for jobseekers, he announced a new welfare cap, to be set each year at the Budget for four years, starting in April 2015. Housing benefit, tax credits, disability benefits, and pensioners' benefits would all be included, but the state pension would not. He described the cap as "a limit on the nation's credit card".

The chief executive of Citizens Advice, Gillian Guy, described the cap as a "huge gamble": "People's legitimate need for support should decide spending levels, not the other way round. Forcing ministers into a situation where they choose between political embarrassment or meeting vulnerable people's living costs, may mean that people with a disability, or who are struggling to meet housing costs, do not get the help they need."

The seven-day wait to receive benefits "could mean families who have fallen on hard times being unable to eat or heat their homes, relying even more on food banks which are already breaking under the strain of demand, or turning to payday lenders".

Liam Allmark, public affairs officer at Caritas Social Action Network, warned that the requirement that claimants learn English "has the potential to penalise some of the most vulnerable members of society".

The chief executive of Shelter, Campbell Robb, said: "If the Government is serious about cutting the welfare bill, we need more affordable homes to bring down rents, so that fewer people need housing support. So far, we haven't seen the big and radical action that's needed to tackle a housing shortage that's been decades in the making."

During Prime Minister's Questions on Tuesday, the Leader of the Opposition, Ed Miliband said that only 2000 of the 100,000 new homes promised by the Government had materialised. On Thursday, the chief secretary to the Treasury, Danny Alexander, announced that the Government would spend £3 billion to deliver 165,000 new affordable homes: "the most ambitious and significant investment in affordable housing for a generation".

Among the announcements made by Mr Osborne on Tuesday was the abolition of "automatic progression pay" in the public sector. He also quoted a forecast from the Office for Budget Responsibility that the numbers employed by the public sector would fall by a further 144,000 by 2015/16, resulting in a civil service smaller than at any time since the war. However, he claimed that every job lost in the public had been offset by three new jobs in the private sector.

The Review includes a ten-per- cent cut to the local government budget. Sir Merrick Cockell, chairman of the Local Government Association, warned that this would "stretch essential services to breaking point in many areas". However, he welcomed Community Budgets, which allow providers of public services to share budgets, as a "radical reform which will make big savings to the public purse".

Charities welcomed the Chancellor's retained commitment to spend 0.7 per cent of national income on development. However, Christian Aid called on the Government to enshrine the commitment in legislation.

The Government also announced that English Heritage would receive £80 million to establish a charity to look after the National Heritage Collection. This charity would become self-financing and no longer afforded taxpayer support.

Funding for the Charity Commission was reduced by 6 per cent, less than the 10 per cent feared ( News, 21 June) but still resulting in a further reduction in posts, the organisation said.

Mr Osborne insisted on Tuesday that his programme of spending and cuts was "fair". Distributional analysis by the Treasury suggests that the top fifth of the population will lose the most under the changes set out in the Review. The second group to lose most is the poorest fifth. The Children's Society has highlighted that members of this group will lose almost £1000 a year through cuts to public services and changes to tax and benefits. The charity welcomed the Government's commitment to maintaining the pupil premium, whereby schools are allocated more money for poorer pupils.

A briefing produced by the House of Commons Library before the Review highlighted that the period of low or no growth in public spending since the Government came to power is the most prolongued period of spending restraint since the Second World War. On Tuesday, Mr Osborne warned: "If we abandon our deficit plan, Britain would be back in intensive care." Since the Government came to power, the deficit has been reduced by a third. However, this remains among the largest of the major international economies. Mr Osborne insisted that it must be reduced further "because it's wrong to go on adding debts to our children's shoulders".

On Wednesday, Paul Johnson, director of the Institute for Fiscal Studies emphasised the "radical" scale of the changes: "At almost any other moment in the past 60 years, announcements of spending cuts of this scale would have caused a storm . . . Not now. We seem to have got used to this level of austerity. We might need to get used to it." Cuts of a similar magnitude are pencilled in for 2016-18 as well, he said.

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