25th November, 2020
Chancellor, Rishi Sunak, delivered his “Spending Review” in the House of Commons yesterday. The news, as I’m sure you anticipated, is not good on a number of fronts, some of which could adversely impact on tenants and your organisation, as the economy struggles to recover and Government debt increases to levels never experienced in post war Britain.
Unemployment, in the next 12 months, is likely to increase to 2.6 million by June 2021. Public sector pay is to be frozen, with the exception of the NHS and staff earning below £24,000. The “National Living wage” is to be raised by 2.2% or £8.91 per hour. DWP also expects a 2nd spike in benefit claims, during the next year, at least, as workers are made redundant & job numbers decline, despite the £Billions being invested to boost the economy & mitigate losses.
Mr Sunak announced a number of changes to benefit awards, including:
a) From April 2021 a rise of 0.5%, which is the current CPI rate, to “legacy awards” like JSA, ESA, Income Support. Applying the increase to the JSA standard rate, it amounts to £0.37 per week. Even less, if applied to the rate for under 25’s; and
b) The freezing of Local Housing Allowance (LHA) from April 2021/22. You may remember, the current rates were only introduced in March this year, as part of the Government’s Covid measures, restoring the 30th percentile level, after a period of 4 years being frozen at 2015/16 levels.
He made no announcement, as to the possible extension of the extra £20 per week addition to Universal Credit’s, Standard Allowances, introduced, again in April 2020, on a “temporary” basis, to offset some of the recognised additional expenses incurred during lockdown. Work & Pension’s Secretary, Theresa Coffey, has said a decision on this has been deferred, as the Government is waiting to see what happens with the economy and whether there’s any need for further COVID measures. Unsurprisingly, the uncertainty surrounding this measure, has provoked considerable negative reaction in social media.
I expect more details to be announced and will endeavour to keep you appraised.
UC Advice & Advocacy Ltd