Community Links

Community Links blog

Posts Tagged ‘chancellor’

“Two peanuts of hope in the crackerjack box of despair”

Friday, March 10th, 2017

There wasn’t a lot to celebrate in the 2017 budget, indeed we might say there wasn’t a lot in the 2017 budget, full stop, but we have found “two peanuts of hope in the crackerjack box of despair” (Homer Simpson 2006).  We will start with them and then offer a quick Community Links perspective on the three issues which have dominated all the other  media commentary. 

First, the London Devolution Agreement

The Agreement was announced and published alongside the main budget statement. It included:

  • Co commissioning of criminal justice services with substantial potential for reducing offending and for improving services for victims and offenders. To be finalised in June
  • Devolution of a number of health care powers. Further details expected next week
  • Devolution of the adult education budget from 2019/20 and the promise of “greater influence” over careers services.
  • Transfer of the budget for the Work and Health programme and a further commitment to a “strategic dialogue” on employment support.
  • Powers to pilot a new Development Rights Auction model for funding future infrastructure projects. This model is likely to provide very significant new funding.

There is lots more detail expected in the coming weeks but the headlines are encouraging with more power and more resources invested closer to home. Now the responsibility passes to London’s leaders for ensuring that devolution does not stop there but that local communities are fully involved in designing, developing and delivering these important services

Second, the “next generation” passage from the Chancellor’s speech

“If you talk to people from any background and any part of the country about their hopes and their aspirations for the future, you’ll hear a recurring concern for the next generation. 

Will they have the qualifications to find a job?
Will they have the skills to re-train as that job changes, and changes again, over a working lifetime?
Will they be able to get on the housing ladder?
To save for a pension?

In short, the question that concerns so many people is “will our children enjoy the same opportunities that we did”?

Mr Deputy Speaker, Our job is to make sure that they do.

That’s why we are investing in education and skills to ensure that every young person, whatever their background and wherever they live, has the opportunity to succeed and prosper. The proportion of young people not in work or education is now the lowest since records began that’s a good base from which to build. But it is only by equipping them for the jobs of tomorrow that we ensure they will have real economic security.”

We are with you on all this Mr Hammond, now what can we do about it? A Bill of Rights for the Next Generation perhaps?

Finally our view on the three topics that have attracted most attention:

Business rates: The coverage has focused on the prosperous areas that are of most interest to Conservative MPs. In Southwold for instance a sausage roll will apparently soon cost £8.17 if the butcher raises prices in line with the rates increase. Business rates are in fact a problem for any area where property prices have gone up which, of course, they have in east London, and it is a particular issue in areas which have been undergoing regeneration like Canning Town and Stratford. We don’t yet know the likely impact of the measures that the Chancellor announced yesterday but this is seriously alarming and an issue to which we will return.

NI increase for self employed. Hammond hits white van man” screamed the Metro front page yesterday morning. “Hammond hits highly paid barristers and consultants” would have been more accurate. As the Resolution Foundation have pointed out this is a progressive measure. Low earning child minders and window cleaners in Newham will benefit. The messaging was dreadful but the change is good.

Social care: No amount of spin could make £2b over 3 years for social care and £450m for the NHS sound like anywhere near enough to turn around the crisis in health and social care. Most expert analysis suggests it will fill less than half the gap. Of course Conservative back benchers worried about “trolleys in corridor” stories in their local papers know this too. What will they do now?

Good news for the voluntary sector, but don’t stop now

Wednesday, March 8th, 2017

The Dormant Assets Commission reported last week that an additional £1bn to £2bn lies in old insurance policies, investment portfolios and pensions and can be released for funding the voluntary sector. This more than doubles the amount that has already been identified. 

The Dormant Accounts Act in 2008 provided for the collection and distribution of these forgotten funds. All the money so far has gone to Big Society Capital but Civil Society Minister Rob Wilson has already indicated that the new money could be used to “help good causes” in various ways.

First let’s put the numbers into perspective. The wonderful Comic Relief took 30 years to raise £1bn. Children in Need raised £46m last year. The Big Lottery Fund, far and away Britain’s biggest independent funder distributed £583m. All three are tremendously important funders of the third sector, particularly of smaller local organisations, but a dormant fund in excess of £1bn would be significantly bigger than all of them put together.  In the budget speech today the Chancellor will even announce to the nation government programmes with smaller numbers attached. There has already been much trailing,  for instance,  of an anticipated £320m for the expansion of the free school programme.

We congratulate the Minister for establishing this important Commission and we welcome its findings.

This, however, is only half the story.  I also want to make two other points:

First, the original arrangement was applied only to the small group of major banks included in the Merlin agreement – Barclays, HSBC, Lloyds Banking Group and RBS.  At the time Gordon Brown made clear the intention to first establish the process with the biggest players and then expand the scheme.  Seven hard years elapsed before the Commission was set up to explore the options in December 2015.  Throughout that time we pressed ministers, their shadows and their seniors, Manifesto groups, a party leader and a PM to, at the very least, take a look at the possibilities. I recalled repeatedly that £11bn was the number first discussed as the full potential of the scheme at the time of its inception. Back of a Treasury envelope, perhaps, and maybe overstated but even half that sum, harnessed to a programme for refuelling the voluntary sector, would have been a really substantial and eye catching government programme or manifesto pledge.

Why did no one listen for so long?  It’s not as if the sector has had more money than we needed in these recent difficult years.

Second, the Commission reporting last week was understandably cautious in its estimates and limited in its purview. £1bn to £2bn is a long way short of those early numbers. I think there is more money still yet to be unearthed. Much of it may be in smaller amounts, some of it might even be local and in unlikely places.  In London, for instance, £223m lies on dormant Oyster cards – the sort that most Londoners have, at some point, lost, replaced and forgotten. Suppose TfL spent a very generous £10m on a three month campaign promoting the reclamation of this money. I doubt if very much would be claimed but suppose we were left with just half. As we have pointed out to London’s Mayor you could do a lot of important work in London’s most disadvantaged communities with £100m.

And these are all schemes that keep on giving. Although the big numbers have accumulated over many years and will never be repeated, additional installments reach the deadline date every year.  The London Oyster pot, for example, rose by £53m between 2015 and 2016.  Once the reclamation procedures are in place the process will generate a more modest but regular yield year after year.

Let us be clear, none of this money belongs to the banks, the pension companies, TFL etc. It belongs to us. If it can’t be returned to the original customer it should be used for the common good. It should not be used to bolster numbers and generate interest on big corporate balance sheets.

It is, without doubt,  terrific news that a further £1bn plus will be flowing into the sector soon and I don’t mean to be a grumpy old man but, amidst the rightful welcome, lessons must be learnt: Pain could have been avoided if the opportunity had been responsibly explored a long time ago.  Let us not now endure another nine lean years before thoroughly exploiting ALL the possibilities.

What are you for Mr Hammond?

Thursday, February 23rd, 2017

8 Months after he picked up the keys to No11 it is difficult to discern any clear pattern or purpose to Philip Hammond’s Chancellorship.

His most decisive action to date has been to cancel the annual ritual of a spring budget. The one he presents to the House in two weeks’ time will be the last. In future the budget is to be rolled into the autumn statement and delivered before Christmas. It’s a sensible reform but scarcely spectacular. On all matters economic the Chancellor has ceded visibility, if not control, not only to the PM but also to other ministers, particularly Boris Johnson, even to David Davies. March the 8th will be his moment in the sun and a chance to answer the question “what is Philip Hammond for?”

On taking office last July the new Chancellor spoke about a “new phase” for the economy. Contrary to some of the reporting at the time and some of the comment that has filled the void since then, he didn’t say that austerity was over but that it was “right to review the pace at which the government balanced the books.”  Is that review now completed? And if so will he be challenging the conclusion of the IFS Green Budget which claimed last week that “The rate of reduction (in levels of day-to-day public service spending) is set to speed up after this year, with cuts of nearly 4% due between 2016–17 and 2019–20”?

This matters because it is these kinds of numbers that have led Lord Porter the chairman of the LGA, to warn this week that services supporting very vulnerable people are “at breaking point”.  Lord Porter, the Conservative leader of South Holland in Lincolnshire, subsequently said he was “hugely disappointed” by the funding settlement for councils which was set out by the Communities Secretary in a written statement  to parliament yesterday: “As we continue to bring the deficit down” wrote Sajid Javid “local government, must continue to play its part”.

Trolleys in corridors have become a familiar picture on the front pages this winter and such has been the level of disquiet on the government’s own benches that the Chancellor will surely have something in the budget for the NHS. Anything less will risk mutiny. But doctors and hospitals are part of an ecology of care that reaches out through domiciliary services, reduces need through strong public health programmes and builds resilience and wellbeing through a diverse range of community services.  So the question is not about whether Mr Hammond responds to the crisis but about whether he sticks a bandage on the creaking fabric of an acute sector that faces irreconcilable trajectories of demand and resource or  becomes the first chancellor to really grip the necessity for prevention and for a cross government “need reduction strategy” stretching beyond the NHS, into other arms of government, particularly local government, and on to the community sector where some of the most effective (and cost effective) work is already going on. Our own work on a community development approach to the early detection of cancer for instance has increased the take up of cancer screening appointments in east London by 15%.

Clinicians at the huge and ferociously overworked London Hospital just down the road from Community Links tell me that one in five beds are taken up by patients whose condition is caused by, or seriously exacerbated by, diabetes. We know that more than half of all Type 2 diabetes can be prevented or delayed by simple life style changes and the most basic early action. Ultimately it is only a sustained investment in this kind of preventative work that will enable our hospital, and the many others like it, to deliver the high quality acute services that they should be delivering.

The budget that the Chancellor is writing could buy enough new trolleys to placate his own side of the House for a few months more or it could set out the simple but ground breaking measures for the longer term transition to a preventative economy that I suggested in my address to the All Party Parliamentary Group last year  and that we have detailed in the various publications of the Early Action Task Force. It’s time to decide Mr Hammond. What are you for?

The Ed Balls promise: Shadow Chancellor Ed Balls and the power of prevention

Monday, October 1st, 2012

Shadow Chancellor Ed Balls  promised on Friday- and repeated in his round of pre-conference media interviews this morning and again in his platform speech – that an incoming Labour government would undertake a “root and branch budget review”. It will, amongst other things “examine whether cuts made now would lead to higher costs in the future”. “For instance” he said “if you cut public health or targeted youth support, and other preventive budgets, that would be completely perverse”.

This may seem like common sense economics. Didn’t our grandmothers teach us that a stitch in time in time saves nine? Absurdly however  such a longer term perspective is rarely applied to public expenditure. In the very same news cycle we hear that the coalition government will be funding nursery education from top slicing the Early Intervention Grant. This will leave local authorities with a shortfall of up to 20% in their early intervention plans for next year. Sure Start Centres and the governments own troubled families programme are likely to be prominent and early victims.

Perhaps worse still it is likely that the remains of the Early Intervention Grant will be rolled up into the business rate returned to councils thus effectively taking out all funding specifically set aside for the purposes of early intervention.

This is text book orthodoxy from the False Economy School of economic philosophy classically exemplified by Justice Minister Lord McNally  earlier this year when he told the House of Lords that government will not “devote  limited public funds to less important cases on the basis that they could indirectly lead to more serious consequences”.

Of course the Prime Minister, who has spoken favourably of early action in the past,  might well protest that assertions in opposition are not the same as actions in power. As Chancellor, Ed Balls would discover in government a set of rules, customs and practises that systematically obstruct even the most modest “long-term” thinking, planning and budgeting.

The Early Action Task Force has been examining these blocks – the reasons why common sense economics is not reflected in common sense budgeting.  We’ve concluded that isolated initiatives are not enough. We need to change structures and systems to meet imminent liabilities and to unleash the triple dividend – thriving lives, costing less and contributing more. Over the next few weeks and in the run up to the publication of our second report in November we will be sharing on this blog some of the changes we recommend.

Today we welcome the Ed Balls promise. Its bold and its right. Now we need similar commitment to “root and branch” examination of structures and systems