English councils’ budgets for 2014/15, published this month, show that their current spending has fallen by 23% over the five years of this parliament. How have the cuts affected housing?
Chartered Institute of Housing figures show that housing fared worse than many other services with a 28% cut – once housing benefit was taken out of the total. Within this, though, some services relevant to housing did much better, or worse, than others. And the cuts do not apply to council housing, which of course is financed entirely from rents.
Perhaps surprisingly, direct spending on homelessness suffered only a 4% cut. However, given the increase in homelessness and the use of temporary accommodation, it’s arguable that it shouldn’t have been cut at all. There’s been a notable growth in spending on bed and breakfast accommodation, reflected in its increased use shown in the homelessness statistics.
Housing welfare and support suffered one of the biggest cuts – a 44% fall in cash spend since 2010-11. Not only has this meant heavy cuts in general support services, but it has also badly affected services for the homeless, such as domestic violence refuges. Organisations such as Homeless Link have found an increase in reported rough sleeping in local authority areas that have cut their support for the single homeless.
Regional breakdown of councils’ General Fund expenditure
|2014-15 (£m)||Change on year (%)||2014-15 (£/head)|
|South-east excluding London||291||↓2.2||33|
|East of England||147||↓6.4||25|
|Yorkshire & the Humber||181||↓11.2||34|
Also surprisingly, housing strategy, advice and renewal work fared reasonably well with only a 10% cut in cash spending over five years. Indeed the separate spending on work to maintain standards in the private rented sector has actually increased slightly, by 11%, perhaps due to licensing and accreditation schemes producing an income to offset costs.
The big loser in work related to housing delivery has been planning services. Spending on planning and development was £2.2m in 2010-11 and is now down to £1.3m, a 42% cut. It’s not possible to separate out which parts affect new housing development, but it’s pretty obvious that while the government blames the planning system for delays, many delays arise from staffing cuts in planning departments.
These cuts also reflect the fact that councils are understandably protecting some services such as social care for children.
On a more positive note, councils’ spending on their own housing services (where they still have council housing) is relatively buoyant. Total spending was £9.4bn in 2010-11, when councils were still obliged to pay nearly £500m in ‘surpluses’ back to the Treasury.
With the self-financing settlement that took effect in April 2012 this reverse subsidy ended. Despite the extra debt which councils took on as part of the settlement, debt costs have actually fallen. This allowed spending on services and new investment to rise to £5.3bn in 2013-14 compared with £4.6bn at the start of this Parliament.
Original post (paywall): Local Government Chronicle