George Osborne wants the headlines from his Wednesday spending review to praise his largesse as he backtracked on tax credit cuts (partly at least) and on planned cuts to policing. But, as always, the devil was in the detail. Here are 9 of the cuts he is sneaking through:
1. A 56% cut to government funding for local councils
Osborne is scrapping the central government grant to local councils. He said:
Because the amount we raise in business rates is in total much greater than the amount we give to local councils through the local government grant, we will phase that grant out entirely over this Parliament.
The result is that councils now face a 56% cut in government funding by 2019/20. Councils will be expected to make this up through local revenue and business rates; all very well for councils with plenty of prosperous businesses to milk, but a devastating blow for councils in poorer areas. As Paul Mason warns:
(3/3) Major fiscal decentralisation under way, creating post-code inequalities Thatcher tried to remedy
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— Paul Mason (@paulmasonnews) November 25, 2015
Local councils are already creaking under the weight of earlier spending cuts, as Cameron recently found out to his own embarrassment. So Osborne has sweetened the deal a little, incentivising them to sell off their assets and cash in on a one-off windfall that, as the Conservative leader of his own county council warned him, is “not sustainable in the long term since they are one-off receipts”.
2. Grants for student nurses will be scrapped
Osborne is abolishing grants for student nurses and replacing them with loans, in a move that looks set to lumber already cash-strapped nurses of the future with unsustainable private debt – if it doesn’t put them off entering the profession altogether.
Remarkable that a government that is always lecturing the rest of us about the importance of living within our means seems so eager to pile more and more loan-burdens upon its citizens.
3. Housing benefit will be capped
Having been forced to backtrack partially on tax credits, Osborne was looking to make up his welfare savings from elsewhere. Enter housing benefit, which has now been capped for new social tenants at the same level as private housing.
Tony Stacey, chief executive of South Yorkshire housing association, writes:
Cutting housing benefit in this way can only increase the hardship experienced by many of our customers already. Homelessness has shot up over the past five years, and these measures will make things worse. What we needed was serious investment in social housing to help restore the safety net and springboard which good quality, secure council and housing association rented homes have provided.
4. Funding for energy efficiency schemes is being slashed
The Department for Energy and Climate Change is one of the big losers in the spending review, facing a budget cut of 22%. Osborne used the spending review to announce “a cheaper domestic energy efficiency scheme”, which he spun like this:
Britain’s new energy scheme will save an average of £30 a year from the energy bills of 24 million households.
The detail he did not mention is that he is cutting funding for existing energy efficiency schemes by a massive £132m – meaning that many people living in inefficiently insulated homes will see their bills go up, not down. (This unannounced detail, incidentally, was buried on the same day that new figures for deaths in winter were published, showing that winter deaths have leapt to their highest level since 1999).
5. The Department for Transport gets a 37% cut
The Department for Transport is taking the biggest hit of any department, with its budget due to be cut by 37% by 2020. The Guardian reports that London will be particularly hard hit:
Transport for London’s operational budget of almost £700m a year will be wiped out by the end of the decade, leaving TfL to fund its services through commercial investment, cuts or potentially higher fares.
6. Funding for academies will be cut by £600m
The education services grant – paid to academies – is being slashed by £600 million, meaning that thousands of schools will face major extra cuts. Meanwhile, the funding of schools in England has been overhauled to remove regional anomalies. Teachers unions say London will particularly lose out – but, according to the National Union of Teachers’ Kevin Courtney:
There are no winners and losers under the government’s funding proposals – there are only losers and even bigger losers.
7. Free childcare is being denied to part-time workers
Back in July, the government promised all working parents of three and four-year-olds would be able to claim 30 hours of free childcare per week. But today it turns out he is denying that childcare to up to 1.4 million part-time workers working less than 16 hours a week.
8. Cuts to child tax credits will go ahead
While Osborne has backtracked on working tax credits, cuts to child tax credits are still quietly going ahead: the credits will be restricted to the first two children in every family.
9. The tampon tax stays
There is one thing he didn’t cut: the tampon tax. Instead, he is giving money raised from it to women’s charities – charities that in many cases provide services that have been cut by the Tories:
Tampon tax to fund specialist women's health and domestic violence services which Tories and Lib Dems have cut. Thanks for nothing George.
— Mary Creagh (@MaryCreaghMP) November 25, 2015
For all of Osborne’s upbeat rhetoric, things are about to get a lot worse for ordinary people in Britain. Nurses, social tenants and part-time working parents will bear the brunt of his latest cuts – while the dismantling of the welfare state continues apace.
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