Election time: radical new approaches or more of the same…

By John Coburn - on 25/02/2015

HACT's Head of Community Investment John Coburn comments on the different ways civic innovation is counteracting pro-longed austerity.

We thought the cuts were bad this Parliament but this is only just the beginning.   Austerity is here to stay.   Under George Osborne’s plans, public spending as a percentage of GDP will fall to its lowest level since the 1930s and will require cuts amounting to a further £60bn by 2019-20.  Although there is some disagreement amongst the main parties about spending cuts vs tax rises, the next five years will be tough whatever coloured coalition is in charge.  It is largely the poor (and often those in social housing) who have borne the bulk of the cuts, with welfare cuts and policies such as Bedroom Tax well publicised. 

Latest research from nef show that since the 7 years from the economic crash, real earnings for top 10% rose 3.9% but earnings for bottom 90% fell by 2.4%.  Wage inequality, a UK housing property bubble, and a rise in household unsecured personal debt (some £1bn per month); all point to structural problems that the UK government must face.  There needs to be political will to rebalance the distribution of economic rewards.  While mansion taxes, 50p income tax rates for top earners, and closing tax loopholes and exemptions are being proposed; there is less said about how we invest in skills and job creation, and crucially low pay.

So the question - is there a political consensus to do something different? There are interesting ideas on the political fringes such as the Citizens Income which is an unconditional payment granted to every individual as a right of citizenship.  Replacing the benefits system this unconditional payment would be granted to every individual as a right of citizenship.  It is designed to stop us all from falling into poverty and crucially would end the stigma that comes with state support.  However this is probably a step too far for the political mainstream as many believe such a move would prove unaffordable and unworkable.  Maybe supporting the Living Wage is a more achievable goal in tackling low pay?

One area where there is consensus is greater devolution for the English regions and the power that this has to drive local economies and also importantly to provide cost savings to central government.  Whether this can lead to a reduction in national inequalities is a moot point, but the consensus is that City Deals and Local Economic Partnerships (LEPs) are a good thing.  It will be interesting to see whether more affordable housing is prioritised through such local decision-making.  How local government works with their ‘anchor’ institutions such as housing providers to ensure that their purchasing and procurement benefits their local economy will also be important. 

Another area where there looks like there will be continuity is business start-up support through schemes such as the Start Up Loans Fund.  This is a government funded scheme that provides advice, business loans and mentoring to start-up businesses.  So far over £131 million has been lent out and which has supported over 25,000 businesses.  On the back of this programme, HACT and CDFA have developed a self-employment programme for housing provider residents looking to start their own businesses.  However, access to fair and affordable finance remains a barrier to many, and the CDFA are campaigning to establish a £150 million capital fund expand the CDFI network and meet demand.

So is there going to radical policy changes from an incoming government that will help transform the lives of those in social housing?  Probably not, but continuity and expansion of current programmes will offer new opportunities that should be taken.


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