Hopes of an increase in housing support funding were dashed in a Draft Budget for 2024/25 that finance minister Rebecca Evans said left even the NHS and local councils facing a difficult year ahead.
She said that Welsh ministers faced the ‘most stark and painful budget choices for Wales in the devolution era’ as they developed the Draft Budget. Thanks to persistently high inflation, she said the overall budget is worth £1.3 billion less in real terms than when it was set in 2021 and that the settlement, which largely comes from the UK government in block grant, is not sufficient enough to respond to the extreme pressures that public services, businesses and people are facing.
Within the climate change budget, Housing Support Grant (HSG) was maintained in cash terms at £166.8 million for 2024/25 but this amounts to a cut in real terms after allowing for inflation.
Meanwhile a £5 million increase in the homelessness prevention budget proposed in the 2024/25 indicative budget was reduced to £2 million in the Draft Budget.
Capital investment was maintained with decisions including:
- £365 million in 2024/25 for building new low-carbon social homes through the Social Housing Grant.
- £92 million to support decarbonisation of existing social housing
- £108 million for LSVT Dowry payments
- £127 million in building safety
- £35 million to tackle fuel poverty
- £4 million for the Homebuy scheme
- £8 million to tackle violence against women, domestic abuse and sexual violence
- £38.5 million for Discretionary Assistance Fund.
Rebecca Evans said: ‘We have been presented with the most stark and painful budget choices in the devolution era. We have reshaped departmental spending plans so that we can invest more in the NHS and protect core local government funding for schools, social care and the other services we rely on every day.
‘While the UK government has not provided Wales with a funding settlement that recognises the impact of inflation, we have made changes to our spending plans and targeted investment towards the public services we all value the most.’
Matt Dicks, director of CIH Cymru, said: ‘The reality is that we are in the depths of a sustained and systemic housing emergency with 139,000 people, including at least 34,000 children, waiting for social housing in Wales in October. Furthermore, 11,200 people – including 3,409 children – are in temporary accommodation in Wales, and around 135 poor souls are still sleeping rough on our streets.
‘It is welcome that the Welsh Government has maintained its commitment to supporting the development of 20,000 new homes at social rent through the Social Housing Grant – which is central if we are to have any hope of ending the housing and homelessness crisis.
‘But if we build those homes, we need to ensure that we support some of the most vulnerable within our communities maintain their tenancies. Therefore, effectively cutting support for homelessness prevention means that we are likely to see the homelessness figures in Wales go in the wrong direction, particularly at a time when many are suffering the severe impacts of the cost-of-living crisis.
‘CIH Cymru fully understands the budgetary settlement that the Welsh Government has been dealt and the pressure faced by the NHS post-covid. So, granted there are really tough decisions for ministers to take, but unless we make providing everyone in Wales with a safe, sustainable, and affordable home a foundation mission, our own independent #BacktheBill research has shown that it will cost us billions further down the track, and that’s on top of the very real human misery caused by not having a place to call home.’
Cymorth Cymru Director Katie Dalton said: ‘As it stands, the draft budget is bad news for homelessness and housing support services across Wales and crucially, the people who need their help.
‘We warned the Welsh Government that a failure to increase the Housing Support Grant could have devastating consequences. In this scenario, three quarters of support providers told us they would need to reduce service capacity, with 40 per cent likely to stop delivering services because they do not have sufficient funding to provide safe, high quality support.
‘This would be disastrous, at a time when more people than ever are experiencing or at risk of homelessness. In real terms, this critical, preventative grant is £24 million less than it was in 2012. Support providers have absorbed cuts for the last decade and have nothing left to give.
‘If the Welsh Government wants to end homelessness, it must rethink this budget and give homelessness services the inflationary increase they need. We will continue to make the case for further funding in the final budget over the coming weeks.’
Stuart Ropke, Community Housing Cymru chief executive, said: ‘We recognise that today’s draft budget brings challenging news for all public services that the people of Wales rely on.
‘If we want to set a sustainable course out of the housing crisis, it is absolutely essential that we can continue to build affordable homes for the people of Wales. We are pleased that the Welsh Government has clearly recognised this in its protection of the Social Housing Grant in the draft budget today. Welsh housing associations are currently building 70 per cent of social homes and now will be able to continue this progress for another year.
‘However, simply building the safe, warm, affordable homes our communities need is not enough. The Housing Support Grant, which is the primary mechanism for preventing homelessness and supporting independent living, has been frozen. In reality, a cash-flat settlement is a real terms cut. Our research shows that in the event of a freeze, more than three-quarters of service providers that rely on the HSG are likely to reduce capacity – meaning they will not be able to reach as many people who need support.
‘40 per cemnt of providers are also likely to hand back contracts, and 48 per cent are likely to make staff redundant. This will impact some of the most vulnerable people in Wales; the dedicated people who work for these crucial organisations; and other services, like the NHS, which are already overstretched.’