Budget special: the autumn statement and what it means for you and for the profession
Published by Professional Social Work magazine, 17 November 2022
Chancellor Jeremy Hunt gave his autumn statement to parliament today, announcing tax increases to fund public spending designed to shrink the recession.
The departmental spending cuts feared by so many failed to materialise, prompting speculation that Hunt has left them for the next government to address in two years’ time.
Against a backdrop of gloomy Office for Budget Responsibility forecasts, including a rise in unemployment of 4.9 per cent and further contractions in the economy, the Chancellor announced a package of further cost of living support and confirmed both benefits and pensions will rise in line with inflation.
In total, a £9.4 billion spending package across social care, the NHS, schools, and cost of living support was given the green light, including:
- £2.8bn in 2023-4 and £4.7bn in 2024-5 for adult social care
- £600m in 2023-4 and £1bn in 2024-5 Better Care Funding to free up hospital beds
- £3.3bn a year until 2025 for the NHS
- £3.35bn in total for Scottish, Welsh and NI governments under the Barnett Formula
Speaking about health and social care, the Chancellor said he wants “‘Scandinavian quality alongside Singaporean efficiency” and hinted at longer term public service reforms.
And as he set out his plans to protect the NHS and social care, he said: “The biggest issues are workforce shortages and pressures in the social care sector, so today I address them both.”
He announced an "independently verified plan" for the “number of doctors, nurses and other professionals we will need in five, ten and 15 years’ time”.
The Royal College of Physicians tweeted: “Together with over 100 other health and care organisations, we’ve written to Jeremy Hunt in support of publishing the NHS long-term workforce plan in full – including assessments of how many staff will be needed to keep pace with demand.”
Unison, the largest health and social care union in the UK, sounded a note of caution, saying there had been nothing in the budget about pay, and that planned strikes would be likely to still go ahead.
Unison general secretary Christina McAnea said: “The government acts like there’s no public sector pay or workforce crisis. Nothing was said today to change the minds of NHS staff currently voting on strike action.
“Worker wages must be boosted now to prevent a damaging dispute this winter. Otherwise, the NHS can’t hang on to experienced staff, halt the damaging exodus of key workers or improve wait times for patients.”
The Association of Directors of Adult Social Services (ADASS) also gave a measured response.
Sarah McClinton, ADASS President said: “The next step is to develop a long-term, fully funded plan that provides the right support for older and disabled people, and unpaid carers, together with an adult social care workforce plan that complements the one for the NHS.”
Social care cap delayed and council tax to rise
The proposed cap on how much a person pays for social care has been delayed for two years. The Chancellor says he still believes in the reform, but that the delay, along with what he described as "council tax flexibilities" will help pay for £4.7bn of local authority funding for social care over two years.
But the economist behind the care cap, Sir Andrew Dilnot, expressed dismay, and said:" We have a system that is creaking and falling apart, putting enormous pressure on the wonderful people who deliver care, as well as the individuals who need the care and their families. It's hard to think of a more vulnerable group.
"Our system is something that we should all be ashamed of."
Council tax is set to rise from three to five per cent in some local authorities providing social care, meaning Band D properties could end up paying more than £2,000 a year.
Local Government Association chairman James Jamieson said: “‘We have been clear that council tax has never been the solution to meeting the long-term pressures facing services - particularly high-demand services like adult social care, child protection and homelessness prevention.
“It also raises different amounts of money in different parts of the country unrelated to need and adding to the financial burden facing households.”
Cost of living payments
There is more help on the way for the most vulnerable, which charities say can’t come soon enough.
Extra cost of living payments of £900 for those on means-tested benefits, £300 for pensioners and £150 for those on disability benefits will be introduced next year. There will be an additional payment of £200 for households using alternative fuels.
Benefits and the state pension will increase by 10.1 per cent in line with inflation next year This means a single person claiming universal credit will get an extra £33.83 a month. And in an appeasement to core Tory voters, the pension triple lock will stay in place.
The benefits cap will also rise with inflation.
Rebecca McDonald, chief economist for the Joseph Rowntree Foundation said: “It will be a huge relief to families on benefits that they are not facing what would have amounted to a historic cut. However, families are facing the worst winter many will remember and can’t wait for April – they need the help now to get through a winter of soaring costs.
“Even with uprating, rates are at historic lows and households facing difficult times are increasingly not able to cover the essentials.”
Kamran Mallick, chief executive of Disability Rights UK, said: ““Disabled people are still only being thrown peanuts - £150 doesn’t touch the sides.”
National Living Wage
The National Living Wage will rise to £10.42 from 1 April 2023, an increase of 92 pence, or 9.7 per cent, following Low Pay Commission recommendations.
Energy Price Guarantee
The government’s Energy Price Guarantee will stay for a further 12 months from next April, when many feared it would end, but at a higher level of £3,000 for the average household. This means the maximum amount that energy suppliers can charge has gone up by 20 per cent, from £2,500.
Andrew Capstick, chief utilities analyst at MoneySavingExpert said: “All households will actually see an even bigger rise to bills of 43% as the £400 payment all homes are getting this winter under the energy bill support scheme will not be extended.”
A twelve-month extension to the Household Support Fund will see it rise to £1bn meaning the hardest hit can apply for help from their local council.
Rents capped
Social rent rises in England will be capped at seven per cent, following consultation with the housing sector. This is to protect tenants from rises that stay in line with inflation, which is currently higher, and will save the average household £200 a year.
The Social Housing Action Campaign has urged the government to also freeze social and shared ownership rents, and service charges for 2023-4 warning ‘any increase risks worsening poverty and homelessness.’
Reaction
The Chancellor believes the measures in the autumn statement will mean borrowing will be 'more than halved', the recession will be ‘shallower’, inflation reduced, and 70,000 jobs will be saved because unemployment will be lower.
He points to “global factors” causing high inflation, an observation slated by Shadow Chancellor Rachel Reeves, who accused the government of ignoring the fallout from the mini budget. She said: "The Chancellor should have come here today to ask for forgiveness. At the very least he could have offered an apology. But no.
"Instead he says that his predecessor was correct in his analysis at the mini-budget – the mini-budget that put our economy into free fall. All the country got was an invoice for the economic carnage the government has created. Never again can the Conservatives claim to be the party of economic competence."
Dr Ruth Allen, chief executive of BASW UK, said: “We welcome the Chancellor’s announcement of additional funding to tackle the cost of living, such as uprating benefits in line with inflation.
"But uprating benefits was the minimum action that a Government committed to improving standards of living should deliver, and it is does not magically fix the other problems that are facing people hardest hit by rising prices. Benefits were already at a paltry level and uprating with inflation simply means that people who receive benefits are not worse off.
“Parts of the Autumn statement today are welcome, but there are still many unanswered and under-resourced problems including insufficient funds to fill the hole in social care. Local authorities remain at severe risk across all their municipal responsibilities across the UK."
This article was updated on 18 November 2022 to include comment from Sir Andrew Dilnot on the social care cap.