Sunshine and joy for a Monday morning: cuts and rumours of cuts

Last week there were three reports of proposals from the Chancellor, George Osborne, that will cause concern for housing associations and charities.  It appears that one was unfounded, the second was abandoned, but the third remains a possibility.

The first, reported in the Financial Times, hinted that the Chancellor was intending to sell off £44 billion in loans and grants to housing associations.  It appears that the FT got it wrong, and that the Chancellor has authorised the sale of the mortgages which were acquired by the Government during the financial crisis. Originally owned by Northern Rock, the mortgage assets are being sold by UK Asset Resolution (UKAR) to capital management firm, Cerberus.

The second related to possible cuts in Universal Credit. The Chancellor was looking to identify savings as mitigation to his planned £4.4bn cuts to tax credits after the House of Lords urged the Government to think again on the reforms.

Iain Duncan Smith allegedly threatened to resign as Work and Pensions Secretary if Universal Credit was cut and he appears to have won the day. Claimants currently lose 65p in every extra pound they earn as benefits are withdrawn. If Universal Credit had been cut by £2 billion, claimants would have lost 75p in every extra pound.

A new rumour that the savings will be found from the housing benefit bill would, if true, further exacerbate the housing crisis in London and the south east.  In Brighton and Hove, less than 1.5% of homes in the private rented sector are now within the current amounts covered by housing benefit.  Housing benefit can be cut but only if there is investment in the building of new homes with social rents.

The third and final rumour, yet to be denied, is that the Chancellor is planning a £320 million raid on the Big Lottery. If true this 48 per cent cut would have very serious consequences for many charities that increasingly rely on the Big Lottery to fund the work that they do. Hopefully it is just a rumour that rings alarm bells in the un up to the spending review.

Oh, yes, there is also the spending review with the promise of more pain …..

Oh, what a happy start to the week!

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