Chancellor’s spending plans are toxic

Another Spending Review, yet more bad news for public services, the people who work in them and benefit claimants. TUC General Secretary Frances O’Grady said: ‘This is a toxic mix of bad economics, nasty politics and dishonest presentation.

‘The last thing our struggling economy needs is further cuts to spending to try to close a deficit made worse by the Chancellor’s earlier cuts. When the medicine is not working and side effects are choking the patient you need a change in treatment not more of the same.

‘Many services will be hard hit. Worst of all is a new attack on some of the most vulnerable in our society through the seven day wait and other conditions for social security payments. The Chancellor may think attacks on welfare go down well with voters, but these will lead to parents not having enough cash to feed their children.

‘And for all the talk of new investment, the truth is that the overall capital spend in 2015 will be exactly the same as the Chancellor forecast in his Budget earlier this year.’

Public service pay and jobs squeeze goes on

The Chancellor announced ‘further reductions in the number of people working in the public sector’ – a cut of 144,000 jobs. Looking at the small print of the OBR’s March 2013 report (p79), this appears to be a confirmation of the OBR projection made back at the time of the Budget. So, as they predicted, an average of 36,000 public service jobs a quarter (395 a day) will still be being cut in 2015-16 as a result of government policies, on track with their estimate of a total of 1 million job cuts from the beginning of 2011 to the start of 2018.

He also confirmed another Budget announcement, that there would be a further year’s 1 per cent cap on pay increases in the public sector, following the two or three year 1 per cent cap and two or three year freeze (depending on where you work). What this means in practice, of course, is living standards falling further and further as real terms pay cuts bite. TUC research published earlier this week showed the impact this had had on households, pushing 180,000 children with a parent in the public sector into poverty.

Seven days wait for family and housing benefits for unemployed claimants

Full information on what the new ‘seven day waiting period’ for unemployed claimants will mean is not yet available. But from what’s available so far it doesn’t look good for people who lose their jobs, or their families. The CSR policy costings document specifies that the policy will:

Introduce seven waiting days in Universal Credit for new claimants that have not had a Universal Credit claim in the past six months, where at least one person in the household is subject to conditionality. This costing assumes a 2015-16 start date for the measure.

The measure is forecast to save around £250 million a year, and is calculated on the basis that:

From April 2015 new awards of Universal Credit in each month for claimants who would be subject to conditionality are reduced by the average amount of Universal Credit claimed per claimant per week.

UC claimants ‘who will be subject to conditionality’ includes a very large group of claimants currently on Jobseeker’s Allowance and could even be taken to mean that those on Income Support (a benefit claimed primarily by lone parents with very young children), or those subject to the benefit cap, are included. Today’s announcement that lone parents will have to start preparing for work once their children are three underlines this point. People in these groups face conditions, just not to actively apply for jobs. More details on which conditionality regime this new policy will apply to is needed before we can rule certain groups out of this new process. We do know that at least those claiming Employment and Support Allowance and contributory JSA will not be affected.

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It is also not just unemployed claimants who are affected, those ‘not earning as much as the government expects them to’ will also see their income fall. This means people earning less than the NMW at 35 hours a week (or whatever their specific rule is – requirements will be less for those who are only required to seek part-time work). Households who are working, but see their income fall, will now have to wait a week to claim UC even if they remain in work with reduced hours during this period.

But the most worrying point is that Universal Credit will bring together all cash benefits into a single payment – so a delay in UC can also mean a delay in benefits currently classified as child and working tax credits, housing benefit, council tax benefits and many more. This policy sounds as if it will do far more than simply affect access to £71.70 of JSA for unemployed claimants (hard as that would be by itself) – it looks as if it is also their rent, their bills and their children’s food costs which won’t be met.

The Macroeconomics of the CSR

James Plunkett, director of policy and development at the Resolution Foundation, stated the £11.5bn of cuts for 2015/16 have been pencilled in for sometime and today was more about getting the detail than the direction of travel. James also noted:

The Chancellor needs a further £13bn in both 2016-17 and 2017-18 on top of today’s cuts in order to meet his deficit targets.

In other words, under the current fiscal framework, there is a lot more pain to come.

So the bigger questions today should be about that fiscal framework. It has utterly failed. The triple A rating has been lost, austerity has been extended from 4 years to at least 8, debt/GDP will still be rising at the end of this Parliament and the fiscal rules have either been broken (falling debt/GDP) or proved meaningless (the rolling structural deficit target).

Sources:

Public service pay and jobs squeeze goes onAlice HoodTouchstone Blog Copyright © 2013 Trades Union Congress

Seven days wait for family and housing benefits for unemployed claimantsNicola SmithTouchstone Blog Copyright © 2013 Trades Union Congress

The Macroeconomics of the CSR
Duncan WeldonTouchstone Blog Copyright © 2013 Trades Union Congress

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TUC Campaign Plan 2013: Five steps towards a future that works

TUC campaign to make case for radical economic reform
A jobs guarantee for young people, spreading the living wage across the public and private sectors, putting communities not profits at the heart of public services, and creating a stronger voice for workers in the management of companies are among the TUC’s five key campaign priorities in the run up to the general election, according to its campaign plan published on May 1st.

‘A Future That Works’ sets out five key priorities that will drive the work of the TUC over the next two years. The plan has been agreed by the General Council, which represents the TUC’s 53 affiliated unions who between them have almost six million members.

The campaign for jobs, growth and a new economy will mobilise resistance to austerity, with a series of events across the UK this summer, and will also provide a platform for advocates of pro-growth policies and new economic ideas. This will include an event with former US labour secretary and fierce critic of UK austerity, Robert Reich, who will deliver a lecture at the TUC on 21 May.

The TUC will work with and champion public and private sector employers who reach living wage agreements, as part of its campaign for fair pay and a living wage. The TUC itself became a living wage employer earlier this year.

Opposing the outsourcing and privatisation of public services will be the focus of good services and decent welfare. As well as the Save Our NHS campaign and the Action for Rail campaign to put the rail system back into public ownership, the TUC also plans to support parents and education unions against future attempts to allow state schools to be run for profit.

Having helped see off some of the government’s attacks on employment rights in the Beecroft report, the TUC will continue to press for respect and a voice at work for UK employees. The TUC aims to campaign to retain rights to paid holidays, a proper lunch break and reasonable hours at work that are under threat as the government attempts to repatriate powers back from the EU.

Finally, the TUC’s strong unions programme will train of a new generation of union reps to take the TUC campaign messages to non-unionised workers and workplaces and give a voice to a new generation of young employees.

TUC General Secretary Frances O’Grady said: ‘Margaret Thatcher’s legacy of deregulated capitalism and the cult of finance crashed dramatically in 2008. But the government is still peddling the same old busted model.

‘The government’s failed austerity drive means it could take another ten painful years just to get back to where we were before the recession.

‘Not only will the TUC and unions continue to be the backbone of Britain’s anti-austerity movement but we will also lead the call for new economic ideas.

‘We will champion and work with those who are helping to create a fairer economy – from paying a living wage to giving staff a bigger say in how their company is run.

‘As well as a decent wage, people deserve decent public services. Having overseen the fragmentation of the NHS, ministers now want to introduce the profit motive into Britain’s schools. The TUC will fight this privatisation drive, which we know the public doesn’t support.

‘The TUC is not alone in wanting radical economic and social change. That’s why we’ll be calling on communities and campaign groups nationwide to join our campaign for a new economic settlement that involves and works for the whole country.

‘The next election is likely to be fought over the economy and our living standards crisis. We want to see decent jobs, fair pay, good services and a stronger voice at work at the heart of the plan to deal with these big economic challenges.’

TUC Campaign Plan 2013: Five steps towards a future that works

TUC Campaign Plan 2013: Five steps towards a future that works

Download the plan (pdf format 5.2MB)

Bournemouth Council supporting the ‘sell off’ of public services

At a time when local authorities’ budgets are being savagely cut by central govt leading to the loss of public sector jobs and services; it seems reasonable to expect that our local councils would be doing everything in their power to use all their available resources to support and retain public services. However that does not seem to be the case with Bournemouth Borough Council.

An event is being advertised on the website of Business Events in Dorset under the heading “Winning Public Sector Business – an introduction to bid writing/tendering”. It has the full backing of the Bournemouth Borough Council and similar events have been held for several years which were presumably funded by them.

The half day free workshop session is aimed at small & medium sized enterprises “looking for any Public Sector Contract” and encourages them to “book NOW on a ‘Winning public sector business’ workshop so you can avoid the typical mistakes and pick up tips and best practice when completing a PQQ, ITT or tender document” to give them the best chance of winning. The workshop is described as a “mixture of presentation, case study, group work and most importantly for you working on a tender that you could bid for.”

Even if we put aside the fact it is highly questionable whether the council should be tendering out our public services to the highest bidder; what mandate do they have to use local taxpayer’s money to encourage and support businesses in that very act?

Locally Bournemouth Council is shedding hundreds of jobs through ‘efficiency savings’ – yes that means cuts – and many employees who were employed by the council are being transferred to private sector employers. This very often leads to the employees having to take a cut in pay, changes to shift allowances and lose out on annual leave and sick pay entitlement.

It could be said that the jury is out whether these private sector companies will provide the same level of service to the public. However, most will already have heard stories in the media where it is simply not the case and when a service is moved from the non-profit public sector to a profit making private company, it would seem blindingly obvious that the amount of money made available for the quality of the service offered will severely diminish.

It is also unclear whether services that were constantly audited within the public sector have these rigid checks maintained within the private sector; and it is also unclear who monitors the quality of services being offered. Private companies are also not liable to release information under Freedom of Information requests even though they are providing a public service. Added to this, there is the question of accountability whereby several changes of service providers may lead to any faults / complaints being passed between them whilst they argue who is liable to correct the situation.

Serious questions need to be asked of Bournemouth Borough Council why they make such radical decisions to not only sell off our public’s services but also pay for the training of private companies to assist them in ‘winning’ the contracts.<

The list of contact details for Bournemouth Councillors can be found by clicking here