Damaging welfare reforms not addressed in Spring Budget

Chancellor Philip Hammond’s Spring Budget yesterday (Wednesday 8 March) announced an increase of £350million to the Scottish Budget – with the resource budget increasing by £260 million in the period to 2020, and the capital budget increasing by £90 million to 2021.

The budget contained no new announcements in respect of welfare reform measures.

Mary Taylor, Chief Executive of SFHA, said:

“SFHA welcomes the increase in capital investment in Scotland, of which housing is a key component. The Scottish Government has committed to increase investment in affordable housing in order to build 50,000 homes, 35,000 for social rent, over the next five years so this is a welcome boost.

“Although no further welfare cuts have been announced, we are aware that in April, we will see the child element of Universal Credit being limited along with the Individual Child Element of Child Tax Credit to two children, and the removal of entitlement to housing support for 18 to 21-year-olds. 

“Those affected will be new claimants for Universal Credit in ‘full service’ areas, and for them, it will have a potentially catastrophic effect. They will not be eligible to apply for Discretionary Housing Payments (DHP) which have been used to mitigate against UK Government welfare cutbacks. We urge the Scottish Government to implement mitigation measures, as was pledged in the SNP election manifesto.”

Mary Taylor continued:

“We must remember the impending impact of cuts that have already been made. Next financial year will see the first full year of the reduced benefit cap, which was lowered from £26,000 to £20,000 from November 2016. Sheffield Hallam University estimated 11,000 households in Scotland will be affected by the cap, many of whom will be families with three or more children. It seems certain that, as a consequence, there will be an upsurge in child poverty. The Scottish Government has made an enhanced DHP allocation, from £50.2 million in 2016/17 to £57.9 million in 2017/8, but this will not fully mitigate the problem in the way that was made possible for the ‘bedroom tax’.

“Housing policy – devolved to Scotland – is moving increasingly further apart from welfare policy – reserved to Westminster. Whilst Scottish legislation on social housing gives access to a decent home at a modest rent in the social rented sector, Westminster’s approach to social security is making it increasingly difficult for people to pay for it.”