Spending Review hits EastLondonLine Boroughs

Photo: wwarby @ flickr

Photo: wwarby @ flickr

Chancellor George Osborne’s Spending Review has unveiled a programme of zealous cuts to many areas of public expenditure, which could bring major change to the East London Line boroughs.

Alterations to housing provisions seem especially likely to affect the lives of those in the boroughs of East and South London.

Yesterday’s statement heralded a rise in rents in the social housing sector. For established council housing tenants, the situation will not change, however, for those just entering social housing, rents will become potentially far more expensive – set at up to 80% of the market rate.

Housing benefit has also been further reduced, with an additional round of cuts planned on top of the earlier announcements of a new cap on the total amount payable.

Larger families in costly inner-London boroughs will be disproportionately targeted by this previous change (see our previous article), and critics have expressed grave concerns that it will lead to poorer inhabitants being forced out of the inner city.

Changes announced in the Spending Review will also affect younger recipients of housing benefit, whose entitlements have been cut. Recipients under the age of 25 currently receive a lower allowance based on the cost of living in a room in shared house, now this limitation will apply for a further 10 years – until the age of 35.

On a more positive note, Osborne  announced a commitment to building 150,000 new affordable homes. However, Campbell Robb, chief executive of the housing charity Shelter, said: “The proposed figure of up to 150,000 affordable homes over four years represents less than a third of what this country urgently requires to bring the housing system from its knees.”

He criticised the government for their; “lack of vision for the nation’s long-term housing needs.”

Welfare, which currently accounts for a third of government spending, was one of the most comprehensively targeted areas in Osborne’s announcements, with a total of £7 billion worth of cuts announced.

As the boroughs along the East London Line are home to relatively high proportions of benefit claimants, the reductions in allowances seem likely to have a significant effect.

Osborne announced that monies paid will be capped in future, with the aim that no out-of-work family should receive more than its average economically-active equivalent.

The previously-touted announcement that child benefit would be withdrawn from families with a higher-rate taxpayer was confirmed, but no additional measures affecting that entitlement were added and money for 16 and 17 year olds will still be paid.

Meanwhile, the news was less worrying for senior citizens, who will retain a raft of perks including free television licences, bus passes, eye tests and medical prescriptions, as well as an extension of the cold weather fuel allowance.

Another of the areas where the picture for the East London Line boroughs looked more positive was that of children’s education.

Today’s announcements featured an increase in money for schools over the next four years, with the budget increasing in real terms and greater autonomy granted to individual institutions to decide on patterns of spending.

For poorer toddlers, the news was also positive, with 15 hours a week of free care and education announced for two-year-olds from disadvantaged backgrounds.

While Osborne did not discuss proposals for the higher education sector in detail today, he did announce an extra 75,000 placements on apprenticeship schemes that could potentially prove beneficial for boroughs like Hackney where unemployment is high.

The Science research budget is to be protected (a big bonus for Queen Mary’s college near Whitechapel) but further down the line, at New Cross, Goldsmiths is likely to take a hit as the arts are still in line for severe cuts both for teaching and research.  Most of the debate on higher education has been left until next week when Lord Browne’s controversial report on university education and a potential increase is student fees will be discussed.

Natalie Fenton, Deputy Head of the Department of Media and Communications at Goldsmiths, University of London, described the potential effects of the Browne report’s recommendations as promoting an “entrenchment of inequality,” in which “higher education institutions who have in the past attracted less privileged students will, in general, suffer the most.”

As universities play an important role in the local economy in boroughs like Lewisham and Tower Hamlets, anxious staff and campaigners will be awaiting the results of next week’s discussions on the topic.

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