Budget 2017 – The sector responds

We round up the sector’s reaction to today’s Budget.

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David Orr, chief executive at the National Housing Federation:

“Relieving the pressure on vital social care services is absolutely critical and the government is right to invest £2bn to ensure our most vulnerable people are given the care they need.

“Housing associations’ provision of supported housing is already a crucial part of speeding up delayed transfers of care and ensuring a functional social care system.

“It is therefore essential that the new funding model for supported housing enables this money to be used most effectively across the country. The government’s present proposals do not deliver this.

“Housing associations are ambitious about helping people into work and over the last three years have directly employed around 12,000 apprentices.

“We welcome today’s additional investment into qualifications for 16-19-year olds, which builds on our sector’s existing commitment to helping young people into work.”

Gavin Smart, deputy chief executive of the Chartered Institute of Housing:

“This is an early missed opportunity for the government to take forward the agenda to tackle our housing crisis it outlined in the recent White Paper.

“The extra £2bn investment in social care to reduce the burden on our strained health and social services is welcome. But we know that housing which supports independence and health is also crucial, and the long-term questions which remain on the future funding of supported housing risk undermining this measure.

“We hope the autumn budget goes much further to tackle the obstacles which continue to make genuinely affordable housing inaccessible to millions of people.”

Liberal Democrat shadow health secretary Norman Lamb:

“This announcement gives sticking plasters a bad name.

“It is a woefully inadequate response to the impossible pressure the NHS and care services are under.

“There will be a £2bn black hole in social care funding next year alone, yet the government plans to stretch this amount across three years.

“This will mean more elderly people going without the care they need and more pressure on our hospitals.

“The government has refused to give the NHS the extra funding it needs. The percentage of our national income spent on the NHS is still set to fall which makes no sense at a time of rising demand.”

Clive Betts, chair of the Communities and Local Government (CLG) Committee:

“The chancellor’s commitment of money to adult social care is welcome but the £1bn for 2017-18 falls well short of the £1.5bn the CLG Committee recommended was necessary to plug the gap in funding for the next year and provide adequate relief from the immediate pressures faced by local care services. For the following years up to 2020, the government should commit to getting a true picture of what is required by helping the National Audit Office (NAO) determine the level of funding the government will need to find for 2018/19 and 2019/20.

“The government should provide explicit confirmation that the funding today is new money. From the Budget documents it is not clear this is the case. The announcement of a Green Paper on social care in the long term is welcome but to provide an effective solution to the challenges for our social care system this should be part of an urgent review, undertaken on a cross-party basis.”

Nicholas Harris, chief executive, Stonewater:

“We welcome the chancellor’s multi-million pound education and training provision in this Budget to boost productivity. With housebuilding currently running at around half the level needed to meet demand, this investment will help address serious skills shortages in sectors such as construction which are critical to delivering the nation’s ambitious housebuilding programme.

“We’re also pleased to see a real commitment by government to improve adult social care services with a £2bn investment over three years. We hope that supported housing will form part of this solution, including schemes for the elderly where providers are currently having to make efficiency savings to make up for funding cuts.”

Dr Onkar Sahota AM, Labour London Assembly’s spokesperson for health:

“The government either has absolutely no understanding for the crisis we face in social care, or it just isn’t bothered.

“After NHS medical professionals, local authorities, and individuals up and down the country have cried out for more support, this announcement will feel almost farcical. It is a drop in the ocean in terms of the increasing need and pressure that councils are under. As for the chancellor’s commitment to put more GPs into A&Es, he seems to be oblivious that we are already facing a severe shortage of qualified GPs, particularly in London.

“Ministers have taken money away from local authorities on an unprecedented scale, and the pressure this places on the health services is simply too much to bear. The government needs to take decisive action which will make a real impact before it’s too late.”

Danielle Cullen, managing director at StudentTenant.com:

“Hammond has delivered yet another limited speech where the property market is concerned. In fact – no word at all on anything relating to the housing market, and no elaboration on the comments he made in the Autumn statement.

“Where does that leave private landlords and buy-to-let investors, continuously battered by increasing taxes? Pledges were made last November to plough money into the construction of new housing for help to buy and shared ownership schemes, but any hope of reversal of stamp duty charges on second homes have been scuppered with no further mention of anything property related at all.

“Pledges to build new housing and help first time buyers I wholly support, but there needs to be an even balance between smaller investors and big corporations and how they are supported. The government seem to be continuing to favour developers and big businesses building more properties and making more money, whilst penalising regular people who are purchasing buy-to-let properties as an investment or retirement income.

“Hammond’s pledges since he became chancellor have continuously promised investment into construction, benefits and cuts to tax to build more and more properties to plug the shortage of accommodation. Landlords however, are feeling the pressure from taxation of turnover rather than profit, incomes putting them into higher tax brackets, and stamp duty costs; it really does put into question whether buy-to-let property investments are really worth it anymore.”

Paresh Raja, CEO of London-based bridging lender Market Financial Solutions:

“Having already unveiled its Housing White Paper just last month, it was always unlikely that the government was going to make significant announcements in today’s Spring Budget pertaining to the property industry. Nevertheless, it is very surprising that the industry was in fact completely overlooked.

“The White Paper’s commitment to building more affordable homes within this parliament is, of course, very important. However, more action is needed for the market as a whole to become truly galvanised as the nation prepares for Brexit negotiations purported to begin later this month. Specifically, with figures showing that the number of first-time buyers having to pay Stamp Duty on property purchases has hit a 10-year high, the decision again to leave this tax untouched in the chancellor’s speech will disappoint a huge number of prospective property buyers.

“Excessive taxes on property purchases can prevent people individuals or families from moving to larger homes, in turn meaning there are fewer small houses available for first-time buyers. Cutting Stamp Duty could have created a more fluid industry that favoured both those trying to get on the property ladder and those trying to expand a property portfolio. We will now have to wait until the Autumn Budget later this year to see if the government changes its policy on this issue.”

Manj Kalar, ACCA (the Association of Chartered Certified Accountants) head of public sector:

“The government’s spring budget announcement to provide local authorities with an additional £2bn funding commitment over the next three years to tackle the UK’s adult social care crisis, is a welcome boost – but it’s not a clear or lasting fix for a growing problem.

“We are concerned it represents no more than a sticking plaster and won’t address the long term issue of sustainability in adult social care funding which needs a holistic view, and one that links to the UK’s health care policies.

“The additional £325m for Sustainable Transformation Plan (STP) in health is a start, but a longer term view is needed. The OBR’s January 2017 Fiscal Sustainability Report clearly demonstrates the increasing pressure on public finances by the ageing population – and concluded that the chancellor will find it hard to balance to books, especially as it is faced “with the proportion of the population aged 65 and over set to rise from 18% today to 26.1% in 2066-67 in the Office for National Statistics’ principal population projections.” (Source: OBR January 2017).

“The chancellor’s announcement of a green paper on social care is long overdue. Developing and implementing a long-term sustainable solution is the challenge, and accountants have a massive role to play in finding this solution.”

Richard Lambert, chief executive officer, National Landlords Association (NLA):

“The chancellor has passed up his last opportunity to reverse the damaging plans to restrict mortgage interest relief for landlords before they hit, or even to act on suggestions as to how he might ease the immediate impact.  Sadly, he still seems convinced by the Treasury’s analysis of the consequences, and it looks like he will only change his mind when the reality proves different.

“That’s little comfort to the landlords who will be forced up a tax bracket as a result of the changes or potentially forced out of business, nor their tenants who will be faced either with higher rents or the struggle to find another home in an already pressured housing market.

“However, we’re pleased the government has listened to our calls to delay the implementation of the Making Tax Digital programme as it has the potential to cause chaos as landlords struggle to get to grips with the demands of submitting quarterly tax returns online.”

Brian Johnson, chief executive of Metropolitan:

“Unfortunately this budget was a missed opportunity to give housing associations and care providers the real certainty we need to unlock the delivery of more affordable and supported homes, as well as improve access to social care.

“On affordable house-building, the government have been signalling for weeks that they could give us new rent flexibilities to help us deliver more affordable homes faster – but as of today that has still come to nothing.

“On social care, the chancellor’s additional £2bn is both needed and extremely welcome, but another round of emergency funding is no substitute for a sufficient long-term settlement – so we look forward to feeding into the planned Green Paper on future funding.

“What providers need is long-term investment that is sufficient and cuts across health, social care and supported housing. For housing associations, certainty over rents and the new funding model for supported housing is vital.”

Margaret Willcox, president elect of the Association of Directors of Adult Social Services (ADASS):

“We welcome this important step towards closing the growing gap in government funding for adult social care.

“We are keen to build a consensus on a long-term, sustainable solution about how we provide and pay for care for years to come, and we hope the Green Paper helps to achieve that.”

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