What does the Comprehensive Spending Review mean for organisations in the welfare to work, social inclusion and skills sectors?
Itís probably too early to tell; however the CSR announcements will certainly focus the minds of organisations based in these sectors as they now look to find new ways of delivering more with less.†
Here are some of the announcements relating to Department for Work and Pensions; Business, Innovation and Skills and Communities and Local Government that organisations will now have to consider as they develop their strategic plans and on the ground activity over the coming months and years.†
Work and Pensions:-
What was announced: The Government announced a £2bn investment in a new universal credit. †There will be a further £7bn in welfare savings planned on top of £11bn already announced. A new 12-month time limit on the employment and support allowance could see an estimated 200,000 claimants moved onto jobseekers allowance and see their support reduced. Proposed 10% cut in council tax benefit budget. Under-35s only able to claim housing benefit for a room rather than a whole property. Maximum savings award in pension credit to be frozen for four years. Increased working hours threshold for working tax credits for couples with children. New total benefits cap per family. The State pension age for men will start rising from 65 in 2018 and reach 66 by 2020 (6 years earlier than previously planned). Rise in retirement age for women to accelerate, also reaching 66 by 2020. These measures combined will save £5bn a year. †The Reform of public sector pensions aims to save £1.8bn by 2015, with employees likely to contribute more. Winter fuel allowance, free bus passes and TV licences for 75-year-olds protected. Cuts to child benefit for higher rate taxpayers to generate £2.5bn. The weekly child element on child tax credit will rise by £30 in 2012 and £50 by 2012.
Business, Innovation and Skills:-
What was announced: Train to Gain programme to be axed with funding provided for 75,000 adult apprenticeships a year. †The University teaching budget to be cut by 40% and further education budget to fall by 25%. The science budget will be frozen in cash terms. Administration costs to be cut by £400m with 24 quangos axed.
Communities and Local Government:-
What was announced: The scale of cuts here is most significant as many community organisations who deliver value added services at no cost to providers in the welfare to work sector - thanks to the support they receive via local authorities may no longer be in a position to do so. The CSR indicated that Local Government current spending will be down 27% and capital spending down 100%. Communities current spending will be down by 51% and capital spending down 74% Councils will see a 7.1% annual fall in their budgets. However ring-fencing of local authority revenue grants will end and councils will have freedom to borrow against their assets. Funding for social housing will be cut by more than 60%, with new tenants having to pay higher rents based on a figure of 80% of market value, compared with current levels of 50%. The government expects these changes will free up funds to build 150,000 new affordable homes over the next four years.