Childcare and schools campaigners were left angry and disappointed after today’s Budget, despite the Chancellor’s statement that “austerity is finally coming to an end”.
Despite a welcome for investment in mental healthcare and other spending, including extra cash for the NHS and local authorities, the Institute for Fiscal Studies said the Budget did little to undo austerity cuts introduced since 2010.
“This is not a dramatic change in the sense of undoing much of the cuts we’ve had over the last eight years,” said IFS Director Paul Johnson. The IFS also warned that the extra investment in the NHS was a gamble which was built on short-term borrowing figures. It said the public finances could deteriorate next year when Britain leaves the EU, leading to big challenges for the NHS.
Childcare providers berated a lack of investment and teachers unions were angry at the announcement of a one-off £400m “bonus” to help schools buy “the little extras they need” this year. This follows parent-led campaigns up and down the country for greater core funding for schools after budget cuts.
Chris Keates, General Secretary of the teachers’ union NASUWT, said: “To suggest that all schools need is a nominal sum to fund the ‘little extras’ when schools have faced years of real terms cuts to their budgets and teachers are thousands of pounds worse off from years of real terms pay cuts is deeply insulting and disingenuous…It is clear that this Government still has its head in the sand over the crisis it has created in education.
“‘Austerity is coming to an end’ the Chancellor claimed today. Tell that to the children, young people and the schools workforce for whom today’s Budget added insult to injury.”
Neil Leitch, chief executive of the Pre-school Learning Alliance, said:”It’s incredibly frustrating that the government has missed yet another opportunity to commit to investing what is needed to ensure the long-term sustainability of the early years sector in England.
“How much more evidence does the government need before it finally commits to addressing this issue? How many more pre-schools, nurseries and childminders need to close their doors before someone at the DfE has the courage to say: ‘We need to look at this again’?
“At a time when the financial pressure on the sector is continuing to rise – especially in light of the planned increase in the ‘national living wage’ from £7.83 per hour to £8.21 as of April next year – the fact that the government has done nothing to support the sector, and make sure a policy that it chose to introduce is actually viable in the long term, is nothing less than shameful.”
On benefits, the Chancellor offered a £1.7bn increase in work allowances for universal credit, saying it would mean 2.4 million working families with children would be £630 a year better off. There was also an extra £1bn to help welfare claimants transfer to Universal Credit. However, critics said it was the least that he could have done, given the problems with Universal Credit, and that it did not make up for other austerity-related cuts to benefits.
Tony Wilson, Director of the Institute for Employment Studies, commented on the extra money for Universal Credit. He said: “The announcement of increased investment in Universal Credit is welcome, but is the least that the Chancellor could have done. The restoration of around half of the cuts to “work allowances” – the amount of benefit that families can keep when they are in low-paid work – partially recognises the mistake made when this support was removed in 2015. The other half of the cuts remain in place, as does the freeze to benefit rates and a number of other welfare changes.
‘The Chancellor also announced a set of measures to take the sting out of Universal Credit rollout…[but] without fundamental reform, we can expect more rescues and more delays.”
The Resolution Foundation think tank added that income tax cuts would ‘overwhelmingly’ benefit the richest with three quarters of benefits cuts announced in 2015 staying in place.
The Chancellor promised a minimum extra £2bn a year for mental health services, a new mental health crisis centre, providing support in every accident and emergency unit in the country, an extra £20bn for the NHS by 2023-24 and an additional £700m for councils for the elderly and those with disabilities. He also pledged to cut the business rates bill for companies with a rateable value of £51,000 or less by a third over two years, promised £900m in business rates relief for small businesses and £650m to rejuvenate high streets, announced a new digital services tax on UK revenues of big technology companies from April 2020 and a new careers guidance service through the National Retraining Scheme and halved the contribution of small companies to apprenticeship levy.
Peninsula Employment Law Director Alan Price welcomed the announcement of more spending on mental health. He said: “The announcement of increased spending for mental health care services is a positive sign for employers who are becoming increasingly aware of the importance of positive management of staff with mental ill health. Following World Mental Health Day earlier this month which aims to increase awareness, employers are likely to be examining their internal practices to ensure they are best placed to provide employees with workplace support. A key part of this is making employees aware of appropriate external services and the newly announced 24-hour mental health crisis hotline will be a positive tool for employers, and employees.”
However, despite a move to freeze the VAT threshold and bring forward the tax-free personal allowance rise [it will increase from £11,850 to £12,500 by next April], IPSE, which represents the self employed, said his decision to roll out controversial off-payroll (IR35) changes to the private sector in April 2020 “will have a catastrophic impact”.
IPSE’s Chief Executive Officer, Chris Bryce, said:“The Chancellor has today forced the self-employed into a holding pattern of despair, as they await the introduction of controversial tax changes which could force them out of business from April 2020.
“The Chancellor’s smash-and-grab approach to taxing the smallest businesses is short-termism on steroids.
“It is a short-term tax grab that will do lasting damage to the economy by taxing out of existence the smallest and most agile businesses.”