Spring Statement reaction: chancellor accused of failing to ‘recognise the seriousness of the situation’
Rishi Sunak’s Spring Statement has been roundly criticised by the housing sector for not going far enough to address the cost of living crisis for the lowest-income households.
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The chancellor today pledged to increase the Household Support Fund by £500m, raise the national insurance threshold by £3,000 and reduce income tax to 19p in every pound by 2024.
But figures from across the sector have been left largely disappointed.
Rachael Williamson, head of policy and external affairs at the Chartered Institute of Housing, said: “We are disappointed that measures announced today will not come close to bridging the gap between what the lowest-income households have and what they need.
“The increase to the Household Support Fund, whilst welcome, is not a solution to support low-income families in the face of a cost of living crisis which sees the cost of essentials rising at the highest rate in a generation.
“It is a sticking plaster of discretionary payments which local authorities must administer. A benefits uprating to match the cost of inflation would have done much more to support the most hard-pressed households in our society and ensure people have enough to live on and keep their homes. As it stands, people are facing a real-terms cut whilst cuts are spiralling.”
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Kate Henderson, chief executive of the National Housing Federation, echoed this. “The increase in the Household Support Fund and changes to the national insurance threshold are welcome, but there will still be many families on the lowest incomes who are very anxious about the cost of living, particularly rising energy bills,” she said. “We wanted to see more help today with energy bills.”
For homeowners, the chancellor also pledged to cut VAT from five per cent to zero on retrofit materials such as solar panels, heat pumps and insulation.
Ms Henderson added: “The VAT cut on green home measures for home owners is positive.”
However, she said that more certainty over the government’s Social Housing Decarbonisation Fund was needed. “An additional two years of funding to 2027 for the Social Housing Decarbonisation Fund would provide the certainty and capacity housing associations need to do more, quicker,” she said.
Chief executives at social housing providers were also quick to criticise the chancellor’s failure to “recognise the seriousness of the cost of living crisis”.
Lee Bloomfield, chief executive at Bradford-based Manningham Housing Association, said: “People on the bottom rung of the income ladder are facing a tsunami of significantly higher energy bills and shopping bills increasing week upon week as inflation risks spiralling out of control.
“The imminent rise in national insurance, which will not be properly mitigated by the rise in the personal threshold, amounts to a real-terms pay cut from next month.
“There is no extra money for those on Universal Credit and the £500m allocated to local authorities supposedly to help the poorest in society is minuscule given the numbers of people requiring help.
“I had hoped that the chancellor, who stepped forward to do the right thing in the early months of the pandemic, would choose to support those in greatest need as we enter a new national crisis.
“Instead, he has failed to recognise the seriousness of the situation and left them greatly exposed.”
Elsewhere, Nicholas Harris, chief executive of 34,500-home provider Stonewater, said: “Today’s announcements in the chancellor’s Spring Statement are welcome but fall short of what is needed to support many families who see the gap between their income and even the most basic of outgoings increasing at an alarming rate.
He added: “We need the government to work more closely with the sector to ensure they have what we need and can share best practice on supporting customers through these difficult times.”
Bjorn Howard, chief executive at Aster Group, said: “Given the immediate cost of living challenges facing the UK, the absence of anything new on affordable housing specifically in the chancellor’s speech doesn’t come as a surprise, however the doubling of the Household Support Fund is a welcome sight.
“This Spring Statement and its focus on addressing the strain on household finances serves as a reminder to our sector that we need to continue to drive forward the affordable homes agenda.
“This includes delivery of new housing – but also, at a time when our customers are feeling the impact of the rising cost of living, we need to help those that need it to navigate the financial challenges ahead.”
Meanwhile, ratings agency Moody’s warned that the pressure on social housing tenants could lead to higher arrears for housing associations. “The increase in Universal Credit payments and national insurance threshold will not offset the rising energy and rental costs for social housing tenants, which will pressure arrears for UK housing associations,” said Jennifer Wong, vice-president and senior credit officer at Moody’s.
Michelle Dawson, director of housing and community investment at 35,000-home Abri, struck a slightly more positive tone. While she acknowledged that households are dealing with spiralling costs, she welcomed the new measures and said they would “provide greater financial security during the challenging times ahead”.
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