What George Osborne didn’t tell you in the Budget

Welfare rights expert Gary Vaux examines what was in the small print of the Budget and what it will mean for disadvantaged clients and social care services.

“I am not going to hide hard choices from the British people or bury them in the small print of the Budget documents. You’re going to hear them straight from me, here in this speech.”
Chancellor George Osborne was true to his word over the rise in VAT, the increase in tax allowances and many other measures. But there were still a number of matters that didn’t make it into the speech and were only noticed by a very careful line-by-line analysis of the Budget documents – and many of these ‘small print’ changes will have a major impact on many social work clients.
Reference was made to changes in the process for applying for disability living allowance and moving to a system based on a mandatory medical assessment rather than the current self-assessment claim form. Deep in the Budget small print, the extent of the changes to DLA are spelled out in more detail.
“The revised eligibility criteria and assessment will follow a similar process to the work capability assessment (WCA) used for claims to employment and support allowance, with a points-based system to assess eligibility to the different rates of the benefit. The central assumption for this policy is that it will result in a 20% reduction in caseload and expenditure once fully rolled out. It is assumed that existing claimants would be reassessed over three years, with 25% of the DLA caseload reassessed in the first year (2013), 75% by the end of the second year and 100 per cent by the end of the third year.”
A 20% reduction in caseload and expenditure involves a massive number of claimants facing reductions in, or cessation of, their DLA. Nationally, it means a loss of benefit to 360,000 people, ‘saving’ £1.075bn a year by 2014-15. 
This reduction will not just affect the spending and coping power of people with disabilities – it will be harder for carers to get carer’s allowance, as receipt of DLA by the cared-for is critical to their right to claim. Local authorities may lose income from charging and disabled people moving into work may find it harder to get working tax credit because DLA acts as proof of their disability.
So what else was not prominent in the Budget? 
How about the proposal that people getting jobseeker’s allowance for more than a year will have to pay 10% of their rent – their housing benefit will be cut to 90%?  Or that the non-dependent deduction is being raised? You might not think the latter is that important – or even know what it is. But this deduction from housing benefit represents the amount that a working son or daughter, for example, is supposed to chip-in to their parents’ rent. Not only are the rates being increased – but they are being increased to take account of all inflation since 2001, the last time they were raised. So the increases will be very significant  – and the deductions are often a major source of friction and tension between parents and their offspring.
We’re also losing the Savings Gateway scheme – which would have guaranteed a very good interest-rate for low-income savers. That move saves the Treasury £115m – peanuts set against the £1.6bn costs of tax relief on ISAs. Admittedly, that change wasn’t in the small print – but how many financial journalists reported it, because how many knew what Savings Gateway was, or the fact the plug was pulled on it less than a month before the launch? 
Some hard choices indeed – but hardest on who?

Gary Vaux is head of money advice services at Hertfordshire Council

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