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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Hunt's budget will "strike fear" into the poorest

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Roundup: poverty groups left reeling as they slam budget as not doing enough for the poorest

In what was a mixed bag for Scotland’s sector, Chancellor Jeremy Hunt announced subsidies limiting typical household energy bills to £2,500 a year will be extended for three months, until the end of June and £200m to bring energy charges for prepayment meters into line with prices for customers paying by direct debit.

Hunt also offered 30 hours of free childcare for working parents in England expanded to cover one and two-year-olds, to be rolled out in stages from April 2024 while families on universal credit will receive support up front instead of in arrears, with the £646-a-month per child cap raised to £951.

However benefit sanctions will be applied “more rigorously” if people do not meet work-search requirements or choose not to take up a “reasonable” job offer.

Hunt said he would raise the administrative earnings threshold – under which benefit recipients are subject to an “intensive work search regime” – from 15 to 18 hours a week.

People can lose some of their benefits for failing to follow the regime, which includes weekly or fortnightly meetings with a job coach and a requirement to spend up to 35 hours job hunting a week.

Poverty Alliance director Peter Kelly said that while people in the UK believe in justice and compassion the Budget will strike fear into the hearts of millions.

“The chancellor’s decision to widen the callous and ineffective sanctions regime is completely wrong.

“Our unjust economy simply doesn’t offer people the kind of secure, suitable employment that they need, and too many people simply can’t increase their working hours because of poor transport links, health and disability issues, caring commitments, or lack of affordable childcare.

“Interviews at the Job Centre won’t solve the issues that prevent people from entering employment and increasing their working hours. We strongly oppose any extension of sanctions – they only create more poverty and do nothing to help people into employment.”

On energy Kelly said: “We were one of more than 100 charities and organisations who joined Martin Lewis to urge the UK government to do the right thing by keeping the Energy Price Guarantee in place. We’re glad the Chancellor has listened.

“But we must remember that the Chancellor has ended the Energy Bills Support Scheme at a time when energy bills are still at record highs. The loss of £67 a month will have a big impact on low-income households, and the government must make sure they get extra support - above and beyond the planned Cost of Living Payments - if it’s needed.

“It’s very welcome news that the standing charges for households on pre-payment meters are being brought into line with those on direct debits. The poverty premium on energy is completely unjust, and it’s right that it should come to an end.”

“Tackling women’s poverty and child poverty can’t happen without the provision of affordable wraparound childcare. But it’s unjust to restrict free childcare for one and two-year-olds to working households only. Upfront childcare costs are a key barrier to parents entering employment and this decision will continue to trap families in poverty.”

,John Dickie, director of the Child Poverty Action Group in Scotland, said that while some of the chancellor’s plans are welcome, “some are really worrying.”

“Many of the childcare changes announced are a big step forward and also create opportunities for the Scottish government to go further and faster with its currently more generous and fairer universal childcare offer,” he said. “But the stringent UK job-search requirements for parents on Universal Credit are concerning and overall the package is far short of what struggling families needed as they face another year of high inflation.

“There was no mention of the four million children living in poverty across the UK, a quarter of a million of them here in Scotland, and there was no extra, direct financial support for them. Without that investment, child poverty will continue to damage young lives and drag on our national growth. 

“The UK government must as a matter of utmost urgency  remove the two-child limit and benefit cap and increase child benefit. Any less and the effects of poverty will continue to stalk millions of children from cradle to grave.”

Dickie welcomed the lifting of the cap on fees that can be reimbursed to parents on Universal Credit across the UK, and the switch to payment of childcare costs upfront rather than in arrears. 

Commenting on the expansion of free places to children from nine months to two year olds in England, he said: “Any new investment in early years childcare is welcome and long overdue. The eligibility criteria for these new places in England excludes low-income parents in jobs with low or variable hours and those preparing for their return to work, blocking children in the worst off families from accessing places. 

“The universal approach taken for three and four year olds in Scotland ensures all children can benefit, especially those in the lowest income families. The Scottish Government should use any funding consequentials to build on existing commitments and expand it’s universal offer to one and two year olds.

“The promise of more before and after school care in England also potentially brings additional funding that Scottish government can use to press ahead with its commitment to expand school age childcare. We hope government will bring forward the detailed plans needed very soon.  

“With equivalent funding expected for Scotland, the Scottish Government must expand the funded childcare entitlement to all one and two-year-olds equally.”

Citizens Advice Scotland Social Justice spokesperson David Hilferty welcomed news that disability fit-for-work tests will be abolished.  

“It is vital that people experiencing ill-health, disability and impairment have the financial security to find suitable and appropriate work, without the terror of the prospect of having to be re-assessed as soon as their situation changes.   

“We welcome the stated policy intent – but this announcement will be measured by the outcome for people, and we await detail of how this will work in practice.  People need support not sanctions. The prospect of more sanctions is concerning.  

“Almost half of Universal Credit claimants are already in work and have overcome significant barriers to obtaining that work.   

The Citizens Advice network is already seeing evidence of people who are in work but still struggling to keep their head above water.  

“These changes must not be designed solely with the purpose of reducing claimant numbers – the effect must not be to push people into unsuitable, inappropriate or low-quality work.”

Elsewhere, SCVO Chief Executive Anna Fowlie said the UK government's announcement of £100 million of additional support for charities and communities in England is welcome news and comes on the back of calls from organisations across the UK for targeted funding for charities to meet rising costs and increased demand.

She added: “While this will be positive news for organisations in England, SCVO is calling on the Scottish Government to follow the chancellor's decision to support charities and the people and communities they work with, by ensuring that voluntary organisations in Scotland benefit from the full Barnett consequentials of this announcement.  We want to see a clear plan from the Scottish Government on what additional funding will flow to the sector. 

“Far too many voluntary organisations are telling us that they're worried they won't make it through the next year or will need to reduce the essential support and services they provide.

“With 67% of voluntary organisations reporting financial challenges and almost half reporting that rising costs are having a negative effect on their ability to deliver their services, voluntary organisations across Scotland will be looking to the Scottish Government to provide further support to the sector following this Spring Statement.”