The Budget 2009
Overview – how the public sector fared
In his address to the House of Commons on 22 April, chancellor Alistair Darling said that the UK was facing the most serious global economic turmoil for over 60 years. As a result, this is one of the toughest budgets in recent times in terms of public spending, although Darling has promised to protect investment in schools, hospitals and other key public services.
He also pledged to protect front-line public services by finding savings from back-office functions, IT, improved procurement and local innovation.
The headline figures include:
- £15 billion in public sector efficiency savings
- Public sector spending to grow by just 0.7% per year from 2011, lower than the 1.1% predicted last year
- UK to borrow a record £175bn this year, with the economy expected to shrink by 3.9%
Responding to the budget statement, Local Government Association chair Margaret Eaton said: “The state of the public finances will have a significant impact on councils’ finances in the coming years and town halls will be bracing themselves for tight times ahead.”
Darling announced that the child element of the Child Tax Credit would be increased by £20 a year from April 2010. Campaigners, who have been calling for a £3bn investment, said the government is now unlikely to meet its target to halve child poverty by 2010.
Kate Green, chief executive of the Child Poverty Action Group: “The money targeted on the children struggling most during the recession each amounts to less each week than the cost of a pint of milk.”
Hilary Fisher, director of the Campaign to End Child Poverty: “Some families in poverty will be helped by the support of Job Centre Plus and for those under 25 unemployed for over a year, but putting money into the hands of parents is the key way to lift children out of poverty and the shamefully small increase in Child Tax Credit will not be enough.”
Children with disabilities will receive a boost through the Child Trust Fund, which grants children born a £250 voucher towards a savings and investment account which cannot be accessed until they reach the age of 18.
Disabled children will be given an extra £100 a year towards their fund and those with severe disabilities will receive an extra £200 a year. The move has been broadly welcomed by campaigners, but with some reservations.
Srabani Sen, chief executive of charity Contact a Family: “We urge government to make further commitments to tackle the high levels of poverty experienced by disabled children and their families through measures to support parents access to work and take up of benefits such as Disability Living Allowance.”
Mark Goldring, chief executive of Mencap: “With adults with learning disability and their families and carers suffering cuts to their support services, the government must ensure a lasting financial settlement for adult social care is put in place. Without a substantial injection of funding into the social care system, the government is going to let down some of our most vulnerable citizens.”
Following the one-off increase in the Winter Fuel Allowance last year, sparked by the steep increase in energy prices, Darling said that he intended to maintain the higher level for another year. This equates to £250 for people aged over 60 and £400 for people aged over 80.
Grandparents of working age who have taken up a caring role in looking after their grandchildren will also have an increase in their entitlement for the basic state pension.
Michelle Mitchell, charity director for Age Concern and Help the Aged: “Maintaining the Winter Fuel Payment, measures to help grandparents and help for low-income savers will provide cheer to pensioners in an otherwise gloomy budget. But the failure to do more to tackle fuel poverty will continue to leave many pensioners out in the cold.”
Social care traineeships
Work and pensions minister James Purnell said: “This is a budget for jobs.” The initiatives to stimulated the job market include an extra £3.1bn investment to help people find work, including offering long-term unemployed people 250,000 jobs across the private and public sector.
In addition, 18 to 24-year-olds at risk of being unemployed for more than a year will be given access to work or training, including in social care traineeships. The plan involves creating 50,000 traineeships for young people in the care sector as part of the Care First scheme, under which social care providers will receive a subsidy for offering sustained employment and training to young people.
Michelle Mitchell, charity director for Age Concern and Help the Aged: “More traineeships are welcome but the failure to provide emergency funding for our creaking social care system will exacerbate the current crisis.”
Coverage of the 2009 Budget on the Community Care website
Budget: Child poverty measures slammed by campaigners