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‘Budget in hard times’ leaves tough questions for housing

Finance minister Rebecca Evans has announced Draft Budget plans that she says will protect public services and the most vulnerable.

But there was disappointment across the housing sector over spending lines that have failed to keep pace with inflation since the three-year Budget announced in December 2021.

The Draft Budget includes additional funding coming to Wales as a result of the UK Government’s Autumn statement, with extra money allocated to NHS Wales and school, plus business support and delivering the real living wage in social care.

The minister said: ‘This is a budget in hard times, which will help to protect frontline public services as far as we can in the face of a perfect storm of financial pressures, while also providing some extra help to those most affected by the cost-of-living crisis and supporting our economy through the recession.’

But she described it as ‘one of the toughest budgets since devolution’ in the wake of austerity, Brexit and the pandemic plus soaring inflation and energy costs: ‘We are still operating in a difficult financial context, with our budget nearly £3 billion lower than if it had increased in line with the economy since 2010-11. Revenue funding is increasing by less than half a per cent in real terms between 2022-23 and 2024-25, and overall capital funding is falling in cash terms in each year of the Spending Review period – 11 per cent lower in real terms in 2024-25 than the current year.’

She added that:  ‘Inflation has eroded the spending power of our budget but not our ambition. We have taken very difficult decisions to make sure all our resources are used to help support people, businesses and services through the tough year ahead.’

The Budget includes funding for the response to the war in Ukraine and for people seeking sanctuary in Wales of £40 million in 2023/24 and £20 million in 2024/25.

There is also an additional £18.8 million for the Discretionary Assistance Fund, which provides lifeline emergency cash payments to people facing financial hardship.

But key housing budgets were left largely unchanged from last year despite inflation rising at 10.7 per cent in the year to November and housing organisations raised the alarm about the impact on housing investment and on people experiencing homelessness and frontline staff.

Cymorth Cymru Director Katie Dalton said: ‘We are very disappointed that the Housing Support Grant budget has not been increased, despite the significant number of people experiencing homelessness and the huge pressure on services. A cash flat budget is a real terms cut, and there is a risk that service delivery becomes unaffordable due to the impact of inflation and high energy costs.

‘We are also very concerned about the impact on frontline workers; this budget is likely to prevent a desperately needed pay increase for these key workers, who are doing incredible work, but are being pushed further into poverty. Our research from earlier this year showed that 44 per cent of frontline homelessness and housing support workers were struggling to pay their bills, 11 per cent were struggling to pay rent, and 80 per cent  were turning off heating, lighting and electrical appliances to make ends meet. These figures are likely to be significantly worse this winter.

‘We urge Welsh ministers to reconsider this decision and increase the Housing Support Grant in their final budget.’

Clarissa Corbisiero, director of policy and external affairs at Community Housing Cymru said: ‘With costs rising we know that access to a safe, warm and affordable home and support services are more important than ever. The Welsh Government is right to maintain investment in building much needed social housing and housing associations will continue to do all that they can as key partners to deliver them.

‘However, the final budget in March will need to provide vital support to keep people safe and warm in their homes. A long term financial plan to fund energy efficiency measures in existing social homes as part of wider efforts to reduce fuel poverty was missing in today’s statement – and any additional investment in tackling homelessness may fall short if core funding does not increase in line with inflation.’



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