November 24, 2016 : Craig Wilson

Little to be happy about in Chancellor’s budget

Third sector reaction to the Autumn Statement

As the dust settles on the Chancellor Phillip Hammond’s first Autumn Statement, let’s have a look at what the announcements mean for the third sector.

Although some social security powers have been devolved to Scotland, most of the delivery around Universal Credit (UC) and Employment Support Allowance (ESA) remains with the UK Government. On UC, Mr Hammond has cut the taper rate that benefits are reduced by for every extra pound earned, with claimants now set to lose 63p instead of 65p. However, due to the fall in the value of the pound, the cost of what we buy is set to rise and, with benefits no longer tied to inflation, this slight tapering is unlikely to have much impact in real terms.

Any focus on social security was sadly lacking. The Chancellor simply stated there would be no additional cuts to welfare spending. This omits the fact that previously announced cuts will still go ahead, with others yet to take effect. Indeed, the tapering of UC will see a mere £700 million of £12 billion of planned cuts reversed.

Bill Scott, Director of Policy at the disability charity Inclusion Scotland said they are “extremely disappointed that the Chancellor has decided to press ahead with the £30 a week cut to Employment Support Allowance”, adding that it “will cause immense hardship to hundreds of thousands of sick & disabled people and their families”. Similarly, Morna Simpkins, Director for Scotland, MS Society, said: “The cut will only push people with MS and those with other disabilities further away from getting into work.”

The announcement that the National Living Wage will rise to £7.50 per hour for those over twenty-five is good news for some, although it means that our sector will have to fight even harder to ensure the funding we receive covers the costs of the work we do. And of course, the figure falls a full 95p short of the real Living Wage. The announcement also does nothing for those under twenty-five. Emily Beever from Youth Link Scotland noted that in their Westminster Manifesto, one specific ask was for the removal of age discrimination from the minimum wage. In response to the autumn statement she said “We are disappointed that the message of equal pay for equal work has not been heard by the Chancellor.”

our sector will have to fight even harder to ensure the funding we receive covers the costs of the work we do

The Scottish Government now has the power to top-up benefit payments to those living in Scotland, so it could ameliorate ESA, if it can find the money. SCVO has suggested that the Scottish Government should investigate using the power to top-up benefits or create new discretionary payments to plug the gaps. However, as the Scottish Government’s Independent Advisor on Poverty and Inequality Naomi Eisenstadt has pointed out, this may require withdrawing money from other services to support those most in need.

The UK Government has honoured its commitment to spend 0.7% of Gross National Income (GNI) on overseas aid. However, the definition of what counts as overseas aid was changed by the OECD to include “peace and security-related expenditure”, potentially paving the way for spending to be shifted from genuine poverty reduction. Of course, any fall in GNI will mean less money available for aid projects.

Finally, it’s worth looking at the announcement to ban letting agents from charging fees. With a similar law passed in Scotland in 2012, this is another sign of how the Scottish Parliament – and our sector, which campaigns so well at Holyrood – has led the way in creating real change across the whole of the UK. From the smoking ban, to the plastic bag levy – and now to letting agency fees – Scotland has pioneered new ways to improve the lives of everyone. With more powers soon to be devolved, and the Scottish Cabinet Secretary for Finance preparing to announce the Scottish draft budget in December, I look forward to seeing what bold steps this Scottish administration will take.

Important: Opinions expressed by bloggers are their own and don't represent those of the Scottish Council for Voluntary Organisations.

by Craig Wilson