Budget headlines:
1.129 To further support rough sleepers off the streets and to help those who are recovering from a homelessness crisis, Budget 2016:
• invests £100 million to deliver low-cost ‘second stage’ accommodation for rough sleepers leaving hostel accommodation and domestic abuse victims and their families moving on from refuges. This will provide at least 2,000 places to enable independent living for vulnerable households and individuals, freeing up hostels and refuges for those in most acute need
• invests £10 million over two years to support and scale up innovative ways to prevent and reduce rough sleeping, particularly in London, building on the success of the No Second Night Out initiative
• doubles the funding for the Rough Sleeping Social Impact Bond announced at the Autumn Statement 2015 from £5 million to £10 million, to drive innovative ways of tackling entrenched rough sleeping, including ‘Housing First’ approaches
• takes action to increase the number of rough sleeping EU migrants returning to their home countries. Building on the success of the Operation Adoze pilot, the government will roll out a new approach in which immigration officials work with Local Authorities and outreach workers to connect rough sleepers to services that can return them home
1.132 Much of the contribution to the increase in working-age employment seen over the last parliament came from substantial reductions in unemployment. Unemployment is at a 10 year low.99 It has fallen by 820,000 since 2010, and at the end of last year, the claimant count was the lowest since 1975.100 In order to meet the government’s full employment goal, it is crucial to continue to reduce unemployment but also economic inactivity. In particular, the government wants to remove the barriers to work for key groups – notably women and the disabled, building on the progress made in the last parliament. The government will also introduce measures to support the self-employed, as set out in the business and enterprise section of this document.
Disability employment reform
1.133 The government is delivering on its manifesto pledge to halve the disability employment gap. The number of disabled people in employment has increased by 150,000 to over 3.25 million people over the last year101 and the government is taking action to increase this further. At Summer Budget 2015, the government allocated funding to provide additional help for those on Employment and Support Allowance to move closer to the labour market.
1.134 This Budget announces that the government is accepting the recommendations of an independent stakeholder group and will offer new peer and specialist support for those suffering from mental health conditions and young disabled people. Later this year, the government will publish a White Paper focusing on the roles that the health, care and welfare sectors can play in supporting disabled people and those with health conditions to get into and stay in work.
Sound public finances
The government’s first duty to the next generation is to put the public finances on a sustainable footing. This provides the bedrock of security for working people. This Budget will ensure that the UK will meet its fiscal target of achieving a surplus in 2019-20. In addition to measures announced at the Spending Review and Autumn Statement, the government will:
• conduct a departmental efficiency review, which will help deliver a further £3.5 billion of savings from public spending in 2019-20, while maintaining the protections set out at the Spending Review and Autumn Statement
• ensure that the cost of providing public sector pensions in the future is fairly reflected in the contributions made by employers, by reducing the public service pension scheme discount rate Budget 2016 3
• continue to spend 0.7% of gross national income on Official Development Assistance (ODA) adjusted in line with the latest economic forecasts
1.69 Summer Budget 2015 and Autumn Statement 2015 announced reforms to ensure that the welfare system is both fair and sustainable. The Welfare Reform and Work Bill legislates for the majority of these reforms. As announced by the Secretary of State for Work and Pensions, the Department for Work and Pensions (DWP) will continue to deliver Personal Independence Payments (PIP) in line with their original intention of supporting claimants with the greatest need in helping them meet the extra costs of their disability or long-term health condition. Spending in 2015-16 on PIP and its predecessor, the Disability Living Allowance, is expected to be over £3 billion higher in real terms than in 2009-10.54 Spending on these benefits is forecast to be higher in real terms in 2019-20 than in 2009-10.
1.81 The Budget continues to reform public services in a way that is fair. The policies of this government mean that the richest are paying an increasing share of taxes, with those lower down the income distribution continuing to pay less. Distributional analysis published today confirms that half of public spending continues to go to the poorest 40% of households, and that the richest 20% will pay over half of taxes in 2019-20.63 In addition, the richest 1% paid over 28% of all income tax revenue in 2013-14 – a higher proportion than in any year of the last two decades.64
2.19 War Pensions and Social Care – The government will exempt war pension payments made to injured veterans from the social care means test in England from April 2017.
2.72 Allocation of Summer Budget funding for additional disability employment support – The government announces that it is accepting the recommendations of an expertled taskforce on how to provide £330 million of additional funding for disabled claimants allocated at Summer Budget. This will include a new, tailored peer support offer to offered shared experiences and support to disabled people, and bespoke employment support directed at key priority groups, such as young people and those suffering from mental health conditions.
2.73 The household benefit cap – From Autumn 2016, the government will introduce exemptions for recipients of Guardians Allowance, Carer’s Allowance and the carers element of Universal Credit from the household benefit cap, which caps the amount of benefits out-of-work working-age families can receive at £20,000, and at £23,000 in Greater London. (76)
2.74 Capping Housing Benefit in the social rented sector – The date from which new or renewed tenancies in the social sector will be subject to the cap on Housing Benefit at the relevant Local Housing Allowance rate will be deferred for supported accommodation – from April 2016 to April 2017 – to enable the government to complete a review of supported accommodation. (77)
2.76 Ensuring disability benefits are better targeted – As announced by the Secretary of State for Work and Pensions, the government will ensure that support for disabled people is focused on those with the greatest need, including by:
• changing the way that entitlement to Personal Independence Payment is determined – a reduction in the number of assessment points awarded for needing to use an aid or appliance to carry out two of the ‘daily living’ activities assessed. This will take effect for new cases and re-assessments from January 2017. (73)
• altering the arrangements for terminally ill claimants migrating from DLA to PIP – this change means that those claimants who are granted a greater award under PIP will get that higher award from the date of the decision, rather than remaining on their DLA award for the standard four week waiting period
• considering the case for long-term reform of disability benefits and services that is fair for the taxpayer and for those with disabilities or health conditions
2.78 ESA and PIP presenting officers – The government will increase the number of presenting officers in attendance at Employment and Support Allowance and Personal Independence Payments tribunal hearings from 2017, to support the tribunal in making the right decision. (53)