Chancellor’s words ring hollow as less is spent on levelling up - JRF

Responding to the Chancellor’s Spending Review, Helen Barnard, Director of the independent Joseph Rowntree Foundation said:

“Remarkably for a much-hyped statement on levelling up opportunity across the country, the Chancellor’s word’s ring hollow as weaker local economies will be getting less money than previously[1] in the aftermath of the pandemic.

“The growing numbers of people in or at risk of being pulled into poverty in our country will have taken little solace from the plans laid out by the Chancellor today. The latest economic forecasts are stark and deeply troubling.

“Behind the figures there are real families wondering how they will get through this winter and beyond. The Chancellor has not risen to the challenge facing the nation. In the here and now families need to know how they will pay for food, childcare and keep a roof over their heads.

“The Chancellor has failed to live up to their manifesto commitment to invest significantly in skills around the UK[2] and allow the funds to be administered locally via mayors, devolved administrations and local authorities. The additional funding for employment support is eye catching and necessary because of the anticipated wave of long-term unemployment in the coming months.

“There is mounting concern in the UK about tackling poverty and inequality[3], and the time to tackle these issues is now, as we recover from a crisis which has already hit the worst off hardest. This was a moment when the Chancellor could have taken action to solve poverty – instead many families will now be preparing for still harder times ahead.”

On the failure to guarantee that the government won’t cut the lifeline for people on Universal Credit:

“It is deeply disappointing that the Chancellor is leaving millions to wait out the winter in fear and uncertainty with no reassurance forthcoming that he would not cut Universal Credit as planned in April. There is no conceivable scenario in which this support will not be needed, and inaction risks a sharp rise in poverty.

“The Government also seems to have definitively decided not to help disabled people and carers on legacy benefits who are now facing another year of higher costs and an even greater struggle to get work with no extra help.

“It’s not too late for the Chancellor to do the right thing. We urge the Government in the strongest terms to correct its course and commit to making the £20 uplift permanent and extend it to legacy benefits at the earliest opportunity.”

On the Chancellor’s plans for housing:

“The decision to freeze help with housing costs risks pushing families into poverty and takes away the link to real rents when calculating uplifts. To properly fix the housing crisis the Chancellor could have committed to increase the supply of social housing, with a particular focus on homes for social rent over the next five years.”

ENDS

Notes to Editors

JRF will be producing more in-depth analysis this evening measuring the Chancellor’s actions against these five tests:

Has the Chancellor given people on Universal Credit certainty about their income after April?

The £20 uplift to Universal Credit is due to be taken away in April 2021. The Government should do the right thing and make the uplift permanent. The Government should also extend this lifeline to people on legacy benefits who are currently excluded from this help. People claiming these benefits are mainly sick or disabled people or carers, for whom heightened health risks, challenges associated with social distancing and loss of essential services has made life even more difficult.

Has the Chancellor done enough to help the weakest economies to level up?

The new UK Shared Prosperity Fund needed to at least match the £2.4bn a year provided up to now by the EU Structural Funds and UK Government match funding. However, we think a government committed to levelling up and supporting weaker economies to respond to the pandemic should double this amount. We’ve called for the UKSPF to be worth £14bn over a three year spending review period. This should be administered locally via mayors, devolved administrations and local authorities.

Has the Chancellor done enough to help the people who lose their jobs improve their skills to find work?

The Government needed to come good on its manifesto commitment of a ‘right to retrain’ with a new deal for adult education which is properly funded, and to deliver on the ‘tailored and personalised’ employment support promised in the Plan for Jobs this Summer. The Government’s lifelong learning commitment announced in September focused on level 3 qualifications, but there is a need to help people access funded level 2 qualifications as well. Employment support programmes must include targeted and personalised help for groups including BAME communities, disabled people, lone parents, long-term unemployed and adults with fewer formal qualifications.

Has the Chancellor done enough to create sustainable, good quality jobs?

The Government should make sure that jobs created from government investment are secure, offer the flexibility for those with childcare responsibilities and crucially are directed towards those hit hardest by job losses, including the lowest paid, women, people with a work-limiting disability, young workers and some ethnic minorities. It should invest in social care to create thousands of sustainable jobs paid the real living wage of £10.85 in London and £9.50 in other parts of the UK.

Has the Chancellor done enough to keep housing costs under control?

To properly fix the housing crisis the government needed to increase the supply of social housing, with a particular focus on homes for social rent: 145,000 affordable homes a year (inc. 90,000 for social rent) for the next five years. This kind of investment would also act as a significant fiscal stimulus, kickstarting our post-Covid economic recovery and answers the government’s call for ‘shovel-ready’ projects.

The government must also take swift action to address the growing problem of rent arrears. Recent JRF polling found that 700,000 households are already behind on rent, with 2.5 million households worried about paying rent over the next three months. We need a watertight ban on evictions, together with targeted support for rent arrears, to prevent a surge of evictions in the spring.

The Work & Pensions Secretary has also issued a written statement detailing benefit rates for next year: https://questions-statements.parliament.uk/written-statements/detail/2020-11-25/hcws600