News

The government appeared to have listened to concerns over the winding down of the Neighbourhood Renewal Fund this week as the chancellor announced that the fund would be extended for a further two years, to 2007-8.

Delivering his three-year spending review to the House of Commons, Gordon Brown said the £525m a year fund would "help to close the gap between the most deprived areas and the rest".

Regeneration experts had warned that if the fund had ended in 2006 as planned, opportunities to reshape mainstream public services in deprived areas could be lost (news, page 14, 24 June).

However, umbrella body Urban Forum called for clarification about whether the extended fund would continue to be shared between the original 88 most deprived areas or be used to cover a wider area.

News of the government's plans for an additional 10,000 social housing units a year for the next three years was welcomed by homelessness charities as "a clear signal of their intent to deliver".

Commenting on his department's budget, deputy prime minister John Prescott said the investment in social housing and homelessness prevention would mean 11,000 fewer families with children living in temporary accommodation.

But Shelter director Adam Sampson said the investment would only "slow the rate at which the housing crisis deepens" rather than end it.

Local Government Association chair Sandy Bruce-Lockhart also voiced concerns about the impact of the plans outlined in the spending review on crucial local services.

"We welcome the spending plans into areas such as neighbourhood renewal and housing. But local authorities, within these spending plans, cannot fund public services and keep council tax down."

Association of Directors of Social Services president Andrew Cozens added that he was "disappointed" at the level of funding made available to social services over the next three years compared with the amount allocated to health.

Funding for social services will rise from £10.6bn in 2004-5 to £12.5bn in 2007-8, including money to provide alarm technology to 160,000 vulnerable people to help keep them safe and out of hospital.

Cozens warned that the government's preventive measures outlined in its vision for adult social care would "almost certainly need funding over and above the sums announced in the spending review".

Spending review summary

• 7.2 per cent per year real terms rise in health spending confirmed.
• Education spending to rise from £52bn in 2004-5 to £64bn in 2007-8, including 17 per cent average annual real terms rise for Sure Start.
• 2.7 per cent annual real terms increase for social services.
• Three-year funding settlements for local authorities and an average annual real terms increase in local authority grants of 2.7 per cent.
• Extension of free part-time nursery education to two-year olds in 500 areas and 120,000 new child care places by 2008.
• Extra £100m to increase the number of children's centres by 2008 from the planned 1,700 to 2,500.
• Improvements to Social Fund, including a lower repayment rate.
• New Financial Inclusion Fund to develop affordable credit.
• 10-year plan for affordable child care to be published later this year.
• 10,000 additional social housing units a year by 2007-8, representing a 50 per cent increase in funding.
• Continuation of the Neighbourhood Renewal Fund.
• Additional investment in police IT to take forward the conclusions of the Bichard Inquiry.
• Loss of 1,960 civil service posts at the Department for Educaton and Skills, including 500 at Ofsted.
• Loss of 720 civil service posts at the Department of Health, plus at least 5,000 job losses at arm's-length bodies.
• Loss of 400 posts at the Office of the Deputy Prime Minister.
• Green paper on the reform of services for young people in England later this year.
• 20,000 community support officers by 2008 to tackle antisocial behaviour.
• Reduction of asylum support costs by at least £450m a year by 2007-8.
• Total efficiency gains in local government of £6.45bn by 2007-8.
• 3.5 per cent annual real terms increase in spending on Scotland.
• 4 per cent annual real terms increase in spending on Wales.
• 3 per cent annual real terms increase in spending on Northern Ireland.