Saturday, December 21, 2024
Failing on House of Lords reform
The Mirror reports that the Prime Minister is expected to name around 30 new peers on Thursday - with a gong for former aide Sue Gray. This is despite a manifesto commitment to slim down this unelected body:
Despite commitment to reform the Lords, the Government is concerned about getting legislation through the upper chamber.
There are currently 273 Tories, 187 Labour, 78 Lib Dems and 184 cross-benchers, meaning no party has a majority.
Ms Gray, who hit the headlines when she led a probe into Partygate, quit as the PM’s chief of staff in October after a slew of internal rows.
She is expected to be among a string of appointments of Labour figures, which are believed to outnumber the Tory peerages that will also be announced.
Tom Brake, Director of Unlock Democracy, said Labour needed to stick to its commitment not to pack out the Lords.
He said: "We hope at least that all new peers will be committed to wholesale reform of the Lords. This would provide some consolation for their swelling numbers.
“Although new appointees to the Lords will now have to be ‘justified’, this falls far short of Labour’s pre-election pledges.
"At the very least, the government must rapidly deliver on its manifesto promise of a proper consultation on the future of the Lords.”
It is the same old story, a Prime Minister who cannot let go of the opportunity for patronage that the House of Lords offers him, eschewing democratic reform in the process.
Friday, December 20, 2024
Brexit cost UK £27bn in lost trade in first two years
The paper says that researchers based at the London School of Economics found that trade barriers had been a “disaster” for small businesses and had forced thousands to stop trading with EU nations:
The academics from the Centre for Economic Performance looked at evidence from more than 100,000 firms, and found that by the end of 2022, two years after the UK signed the trade and cooperation agreement (TCA) with Brussels, total British goods exports had fallen by 6.4% and imports by 3.1%.
An assessment by the Office for Budget Responsibility (OBR) has forecast that the UK will suffer a 15% slump in trade, leading to a 4% reduction in national income, over the longer term.
CEP researchers said that while it was possible the UK might still experience a fall of the magnitude envisaged by the OBR, the government’s independent economic forecaster, there would need to be a further deterioration in imports and exports with the UK’s largest trading partner.
Thomas Sampson, one of the report’s authors, said: “We find that, through the end of 2022, the TCA reduced goods trade by less than half as much as the OBR projected. That said, the OBR number is a long-run projection and we only study the first two years of the TCA.
“Whether the decline in trade will get bigger over time remains to be seen. But the additional fall would have to be larger than what we’ve seen so far in order to match the OBR’s projections.”
Rachel Reeves is likely to welcome the findings, which show the resilience of the economy when confronted by a large trade shock. But it will also put pressure on the chancellor to support efforts to lower trade barriers over the next couple of years to prevent the damage from getting worse.
A review by the OBR of its previous predictions may result in higher growth forecasts once the relatively brighter prospects for UK trade are included.
The UK is due to start negotiations next year on the next phase of the TCA. Ministers are expected to resist calls for the UK to open its agriculture markets to competition from EU farmers and fishing trawlers in return for greater access for UK goods to the bloc.
Examining the first two years of the TCA, the authors said it was clear large firms had mostly carried on trading at the same level with EU partners.
However, smaller exporters – those with fewer than 100 employees – had suffered badly. More than 14,000 of the 100,000 firms examined had quit trading with the EU altogether. Almost all were smaller businesses.
Imports held up better than exports after larger firms found ways to source components and raw materials from countries outside the EU.
Sampson, an associate professor of economics at the LSE, said: “The TCA has been a disaster for small exporters, many of which have simply stopped exporting to the EU. At the same time, larger firms have adapted well to the new trade barriers. Consequently, total exports have, at least so far, declined less than expected.”
Yet another statistic for the side of Nigel Farage's bus.
Thursday, December 19, 2024
Protecting our democracy
The paper says that Vijay Rangarajan, chief executive of the elections watchdog, has said that linking donations to political parties to the UK profits of companies owned by foreigners was one of the urgent changes needed to retain the trust of voters:
The move, which the Guardian understands is being considered by the government, could cap the amount that Musk, the world’s richest man, could donate through the British arm of his social media company X (formerly Twitter).
Twitter UK’s latest publicly available accounts show pre-tax profits of £8.5m in 2022, on a turnover of £205m, substantially lower than the $100m (£80m) that Musk was initially said to be willing to donate.
After a meeting with Musk this week at Mar-a-Lago, Donald Trump’s Florida estate, Nigel Farage, the Reform UK leader, said the multi-billionaire was giving “serious thought” to bankrolling the party.
The prospect has been met with alarm inside the Labour government, with sources suggesting that it would “not be within the spirit” of the existing party funding rules and that it underlined the need for the legislation to be tightened up.
Electoral law in the UK currently stipulates that all donations and loans to political parties worth more than £500 should come from “permissible donors” registered in the UK. These include voters on the electoral register or companies registered in the UK.
The watchdog also wants political parties to be legally bound to make enhanced checks on donations to assess their risk, and to ensure those who donate to “unincorporated associations” are permissible donors.
“It’s crucial that UK voters have trust in the financing of our political system, so they need to see how parties and campaigners are financed and how they spend that money at elections,” Rangarajan told the Guardian.
“Our current laws include checks on the permissibility of donations and are intended to provide transparency over the source of political donations. But the system needs strengthening, and we have been calling for changes to the law since 2013, to protect the electoral system from foreign interference.
“We recommend three key changes: limit company donations to the money that they have made in the UK; legally require parties to conduct know-your-donor checks on donations to assess and manage their risks; and ensure those who donate to unincorporated associations are permissible donors. We are discussing these proposals with the government.”
Let's hope that the government listens and acts.
Wednesday, December 18, 2024
Now Labour abandon Waspi women
I can certainly rememeber my then local Labour MP, the current Chancellor of the Exchequer, Work and Pensions Minister and even Keir Starmer joining protests pledging to compensate women who had lost out due to a failure of communications over their pensions, and yet, once they are in power with the ability to come good on all they campaigned for, the same politicians have gaslit those women.
The Guardian reports that campaigners for “Waspi women” hit by the rising state pension age reacted with fury on Tuesday, after work and pensions secretary, Liz Kendall, announced they will not be compensated by the taxpayer.
The paper says that Kendall told MPs the government accepted the parliamentary and health service ombudsman’s findings earlier this year that her department had failed to communicate the changes adequately, but she rejected its recommendation for a flat-rate compensation scheme, paying out £1,000 to £2,950 to each of the more than 3 million women affected:
Explaining the government’s decision, Kendall pointed to survey evidence from 2006, suggesting 90% of women in the relevant age group knew about the planned changes.
“Given the vast majority of women knew the state pension age was increasing, the government does not believe paying a flat rate to all women at a cost of up to £10.5bn would be fair or proportionate to taxpayers,” she told MPs.
The chair of the Women Against State Pension Inequality (Waspi) campaign, Angela Madden, condemned the announcement.
“This is a bizarre and totally unjustified move which will leave everyone asking what the point of an ombudsman is if ministers can simply ignore their decisions. It feels like a decision that would make the likes of Boris Johnson and Donald Trump blush,” she said.
The Liberal Democrats’ work and pensions spokesperson, Steve Darling, said it was a “day of shame” for Labour. “The new government has turned its back on millions of pension-age women who were wronged through no fault of their own, ignoring the independent ombudsman’s recommendations, and that is frankly disgraceful,” he said.
There was a letter to my local paper earlier this week from a Swansea Labour councillor arguing that people should not be attacking the Labour government as they have achieved so much already. Her problem of course is that people only see the failures and the betrayals, and these negatives are multiplying daily.
Chancellor Rachel Reeves stuck the knife in just weeks after the election, instantly stripping 10 million pensioners of their winter fuel payment. She then twisted the blade by axing the proposed £86,000 cap on social care costs, meaning that tens of thousands of older people will now be forced to sell their homes to cover care fees. Neither of those measures appeared in the Labour manifesto.
Then in her Budget, Reeves geared up to inheritance tax on unused pension pots from 2027, with a potential income tax bill on top, imposed a massive employers national insurance hike and brought famers into the inheritance tax regime. And now this.
This really is beginning to look like a pattern.
Tuesday, December 17, 2024
Is English council reorganisation a serious misstep for Labour?
The paper says that the reforms give with one hand while taking away with the other:
The government’s devolution white paper promises to empower local councils in England while simultaneously telling them what to do. Like their Conservative predecessors, ministers are mainly interested in local authorities because they recognise that they are key to economic growth. The kind of development that the government is desperate to see will not happen unless councils can work with businesses to address the need for investment in skills, transport and housing as well as jobs.
'''
The new council of the nations and regions is meant to signal the government’s seriousness. But despite Angela Rayner’s rhetoric about places “taking back control”, the reality is that her white paper is light on carrot and heavy on stick.
From a local government perspective, the most politically provocative measure is the promised abolition of district councils, which face being merged with counties to form unitary authorities. This is a technocratic and cost-cutting move presented as modernisation. If carried through, it would mean a greater degree of uniformity in place of the current patchwork of arrangements in different parts of England. It would also bring an end to the split in responsibilities between districts, which handle services including rubbish collection, and counties, with their statutory duties including social care and special educational needs.
Such streamlining could bring some benefits. Most people don’t grasp the different duties of the various government tiers (in rural areas this usually includes parish as well as district and county councils). But disrupting local democracy is not a thing to be done lightly, especially when public trust in politics is widely understood to be fragile. Organisational change directs huge amounts of energy inwards and there is no good evidence that larger councils are more effective. Ministers should be mindful of the towns and villages where a district council is the most visible elected body – and may also be different, politically, from the surrounding county. When larger councils are under colossal strain due to long-term underfunding of their social care obligations, there are benefits to keeping some services separate.
The proposals would be more palatable overall if they addressed such problems. A more radical settlement would include a greater degree of fiscal devolution, while a progressive tax policy ought to include the long-delayed reform of council tax. In the absence of a meaningful power shift away from Westminster, these reforms look like more of the same from an already overmighty central government. Even the new unitary authorities will not be placed in charge of decisions such as housebuilding numbers and energy infrastructure. Local councils risk being reshaped not to make their own choices but the better to carry out Whitehall’s orders.
What the Guardian misses is the cost of this reorganisation both in monetary terms and in the disruption of services. There is never a good time for reorganising government structures, but doing so in the middle of a financial crisis where many councils are struggling to avoid bankruptcy, have massive overspends on social care budgets and are scaling back basic services is very risky indeed.
Restructuring is disruptive and costs money, in terms of redundancy costs but also for recruitment and marrying up different systems and cultures. It can take years for things to settle down properly. Who is going to pay for all this? I doubt if the Chancellor of the Exchequer has money to spare. If she has then perhaps she could use some of it to restore the winter fuel allowance and abolish the two child cap on child benefit.
A more rational approach to local government is to be welcomed, but it must be properly financed, properly empower local politicians to make a difference while devolving additional responsibilities to them, and be carried out at the appropriate time.
Monday, December 16, 2024
The failure of levelling up
Chiefly, it was the way the whole agenda was managed, cherry-picking projects, making local councils jump through hoops to access the cash and telling them they had to find matched funding from scarece resources, failing to tackle the real structural problems, red tape, top-down control freakery, and, it now transpires, not actually spending the money allocated to the project.
The Guardian reports on freedom of information requests that reveal that the Tory government spent only a quarter of the money allocated to Michael Gove’s flagship regional spending scheme.
They say that the previous government allocated £10.6bn to the three main schemes under the levelling up programme, which provided funding for regeneration projects as diverse as leisure centres and local transport networks, but local government expert Jack Shaw has found that it managed to spend only £2.5bn of that money, which experts blame on a mixture of high inflation, bureaucracy and poor decision-making:
Shaw said: “It is clear that short-term, competitive funding is not the most effective way of investing in communities. The Conservatives spent too long requiring local authorities to bid for funding, didn’t get it out on time and changed the rules of the game throughout – making it very difficult for places to invest.”
Boris Johnson, the former prime minister, promised that his levelling up programme would help solve Britain’s longstanding regional inequalities. He put Gove in charge of the scheme, which was designed to secure value for money for the taxpayer by making local authorities bid against each other for pots of money handed out by the central government.
Experts say the scheme was beset with problems from the start, however, including changing the bid criteria and heavy-handed intervention from Whitehall.
Even when the money was allocated, local officials struggled to spend it, thanks in part to rapidly escalating costs. With inflation spiking, local authorities found the money they had been allocated did not cover the cost of the planned programmes, and had to go back to Whitehall for more money or permission to change the scope of the work.
Shaw’s figures show officials found it hardest to spend money from the main levelling up fund, with only £875m of £4.8bn having been spent. Just £1bn of the £3.2bn towns fund was spent, while officials spent £616m of the £2.6bn allocated to the shared prosperity fund, which was meant to replace EU funding.
The figures add to mounting evidence that the entire levelling up agenda has failed to live up to its billing.
Just how misconceived the scheme was is illustrated by a report by the parliamentary public accounts committee which found “absolutely astonishing” levels of delays:
Meg Hillier, the chair of the committee at the time, said: “The vast majority of levelling up projects that were successful in early rounds of funding are now being delivered late, with further delays likely baked in.”
Another problem, say experts, was that councils were bidding for money for projects they thought would get approved by central government, rather than projects that were really needed by their local communities. When costs escalated, some say, councils put these projects on the backburner to focus on their true priorities.
Clive Betts, a Labour member of the current public accounts committee, said: “The reality is that the schemes that were accepted were not the ones which tallied with councils’ priorities, but they were designed to hit the priorities of the central government.
“This is the problem with single pots of money which councils have to bid for, and it shows why we need proper long-term strategic funding for local government.”
The Labour government has cancelled the levelling up scheme altogether, rebranding the entire department as the Ministry of Housing, Communities and Local Government.
Ministers have promised to allow local authorities to decide for themselves how to use regeneration funds. Several councils, however, remain financially stretched, with a recent study showing one in four are set to go bankrupt in the next two years without a further cash injection from the central government.
We' see how that works out.
The Guardian reports on freedom of information requests that reveal that the Tory government spent only a quarter of the money allocated to Michael Gove’s flagship regional spending scheme.
They say that the previous government allocated £10.6bn to the three main schemes under the levelling up programme, which provided funding for regeneration projects as diverse as leisure centres and local transport networks, but local government expert Jack Shaw has found that it managed to spend only £2.5bn of that money, which experts blame on a mixture of high inflation, bureaucracy and poor decision-making:
Shaw said: “It is clear that short-term, competitive funding is not the most effective way of investing in communities. The Conservatives spent too long requiring local authorities to bid for funding, didn’t get it out on time and changed the rules of the game throughout – making it very difficult for places to invest.”
Boris Johnson, the former prime minister, promised that his levelling up programme would help solve Britain’s longstanding regional inequalities. He put Gove in charge of the scheme, which was designed to secure value for money for the taxpayer by making local authorities bid against each other for pots of money handed out by the central government.
Experts say the scheme was beset with problems from the start, however, including changing the bid criteria and heavy-handed intervention from Whitehall.
Even when the money was allocated, local officials struggled to spend it, thanks in part to rapidly escalating costs. With inflation spiking, local authorities found the money they had been allocated did not cover the cost of the planned programmes, and had to go back to Whitehall for more money or permission to change the scope of the work.
Shaw’s figures show officials found it hardest to spend money from the main levelling up fund, with only £875m of £4.8bn having been spent. Just £1bn of the £3.2bn towns fund was spent, while officials spent £616m of the £2.6bn allocated to the shared prosperity fund, which was meant to replace EU funding.
The figures add to mounting evidence that the entire levelling up agenda has failed to live up to its billing.
Just how misconceived the scheme was is illustrated by a report by the parliamentary public accounts committee which found “absolutely astonishing” levels of delays:
Meg Hillier, the chair of the committee at the time, said: “The vast majority of levelling up projects that were successful in early rounds of funding are now being delivered late, with further delays likely baked in.”
Another problem, say experts, was that councils were bidding for money for projects they thought would get approved by central government, rather than projects that were really needed by their local communities. When costs escalated, some say, councils put these projects on the backburner to focus on their true priorities.
Clive Betts, a Labour member of the current public accounts committee, said: “The reality is that the schemes that were accepted were not the ones which tallied with councils’ priorities, but they were designed to hit the priorities of the central government.
“This is the problem with single pots of money which councils have to bid for, and it shows why we need proper long-term strategic funding for local government.”
The Labour government has cancelled the levelling up scheme altogether, rebranding the entire department as the Ministry of Housing, Communities and Local Government.
Ministers have promised to allow local authorities to decide for themselves how to use regeneration funds. Several councils, however, remain financially stretched, with a recent study showing one in four are set to go bankrupt in the next two years without a further cash injection from the central government.
We' see how that works out.
Sunday, December 15, 2024
Are Labour's English housebuilding targets achieveable?
Now, with proposals having been published to set individual targets for each planning authority and new rules that will allow for housebuilding on poorer quality green-belt land, one leading housebuilder has stepped in to point out that it isn't as simple as reducing 'red tape' and centrally mandated diktat.
The Guardian reports that the Barratt Redrow chief executive, David Thomas, when asked by the BBC if there were enough workers to build the extra homes promised by Keir Starmer and Angela Rayner, said: “The short answer is no.”
These plans are already meeting resistance within local government, with councils sharing the ambition but uneasy over the means. The Local Government Association Housing Spokesperson, Councillor Adam Hug is quoted on their website as saying there needs to be a collaborative approach to this issue:
It is councils and communities who know their local areas and are therefore best placed to make judgement decisions on how to manage competing demand for land use through the local plan-led system. Getting housebuilding targets in the right place is a difficult task, so any national algorithms and formulas should be supplemented with local knowledge and involvement by councils and communities who know their areas best.
“Planning is about creating communities linked with the right economic activity and public services, whilst conserving and enhancing the natural and local environment. Local democratic discretion and flexibility need to remain important elements of the planning system.
“Planning reform also needs to be supported by further work to tackle workforce challenges, the costs of construction and the financial headroom of local authorities and housing associations to build the social and truly affordable homes we desperately need.
“In order to deliver the homes we need, government must work with councils and the housebuilding industry to ensure there is a suitable pipeline of sustainable sites, which once allocated in a Local Plan and / or given planning permission, are indeed built out. While councils recognise that swift decision-making on planning applications is critical, with nearly 9 in 10 applications granted, people cannot and do not live in planning permissions. Local authorities must be given greater powers to ensure prompt build out of sites with planning permission, as well as the ability to set planning fees at a local level.”
David Thomas has other concerns. He believes that the government would have to “revolutionise the market, revolutionise planning, revolutionise methods of production” to make their target achievable:
The Home Builders Federation (HBF) echoed Thomas’ sentiments.
The HBF told the BBC the UK “does not have a sufficient talent pipeline” of builders to meet Labour’s goal, citing recruitment constraints with poor perception and lack of training within schools, not enough apprenticeships, and the cost of taking on apprentices.
The industry body said the sector had not “attracted” enough recruits in recent years, saying a quarter of tradespeople were aged over 50.
The concerns from within the construction industry have dampened prospects for the prime minister’s construction targets, after he said on 5 December his government would “absolutely” push development through.
At the end of the day, this programme depends on finance. Private housebuilders will not play ball with the government's ambition if there is no profit in it for them, while building social homes will require a big injection of government cash.
And then to add to that there are the inevitable delays in getting the programme off the ground, including surveys, flood risk assessments, highway concerns, educational requirements, wildlife surveys, drainage, heritage and a host of other factors that form part of the modern planning system.
No matter how you fast track the system, these deveelopments have to be the right ones in the right places, linked to communities, jobs and services. You can't just conjure them out of thin air.
Already, the feeling is developing that government has bitten off more than it can chew with an overly ambitious target.
And one more thing. A lot of the new Labour MPs have been elected for constituencies in leafy countryside with quaint English towns. Standby for the uproar when the first applications come in for green belt land.
And one more thing. A lot of the new Labour MPs have been elected for constituencies in leafy countryside with quaint English towns. Standby for the uproar when the first applications come in for green belt land.
Saturday, December 14, 2024
Lunch is for wimps
The Mirror reports that Keir Starmer has defended sandwiches as a "great British institution" after Kemi Badenoch dismissed them as not "real food".
The paper says that Badenoch sparked a backlash after saying "lunch is for wimps" and ranting about sandwiches, telling a magazine interview that she sometimes has a steak brought to her as she works:
The PM was surprised to learn this, his official spokesman said. The sarnie clash broke out after Ms Badenoch said: "I don't think sandwiches are a real food, it's what you have for breakfast." No10 was having none of it.
Mr Starmer's spokesman said: "I think he was surprised to hear that the leader of the Opposition has a steak brought in for lunch. The Prime Minister is quite happy with a sandwich lunch."
The spokesman described the sandwich as a "great British institution" which, according to the British Sandwich Association, brings in £8 billion a year to the UK economy. Asked what the Prime Minister's favourite sandwich is, the spokesman said: "I think he enjoys a tuna sandwich and occasionally a cheese toastie."
Describing her daily routine, Ms Badenoch said: "What's a lunch break? Lunch is for wimps. I have food brought in and I work and eat at the same time." She added that she "will not touch bread if it’s moist”.
Her remarks sparked a backlash, with Good Morning Britain host Kate Garraway saying: "It's made our viewers very cross". Former Chancellor Kwasi Kwarteng said: "I get where she's coming on with sandwiches because, you know, those of us we have low carb diets and all of that sort of business, but it's an individual choice.
"I don't think that's going to be a plank of the next Tory manifesto." He jokingly distanced himself from the controversial remark, saying: "I don't think she's expressing a party line or anything."
There was though an interesting take on this row in the Financial Times in which Stephen Bush says that there is a serious point:
If I were to ask, say, my grandmother — a white South African who came to the UK aged 21, heavily pregnant, because she knew that her mixed-race child (my mother) would not be able to enjoy the opportunities and freedoms she wanted for her in apartheid era South Africa — about British sandwiches, she too would use words like “moist” and would probably say it wasn’t a real food either.
And I, being a British-born mixed-race liberal, would probably say “that’s pretty weird, grandma” and think nothing more of it. Like my grandmother, Kemi Badenoch grew up in another country: she was born in the UK but spent the first 16 years of her life in Nigeria, and like my grandmother she came to this country because of politics. As Tomiwa Owolade wrote a few weeks back in an excellent column for the Times, it is impossible to understand Badenoch’s politics without understanding the upheaval and chaos of Nigeria in the 1990s.
This isn’t the first time Badenoch has said something that to most British ears might have sounded a bit odd. During the leadership election she said she “became working class” when working at McDonald's at the age of 16, having come to the UK as a result of the upheaval in Nigeria — which was suspended from the Commonwealth for violating the Harare Declaration a year earlier.
This is something I also recognise from my grandmother’s story: having got an art degree from the University of Cape Town, the only job she could get here in Britain was as a cleaner. (Whether that is because she had come from Cape Town or because of the pulling power of art degrees, I leave to you to decide.)
Now, I think that for most British people, who do not have that direct relationship to someone like Badenoch in living memory, the things she has said in interviews seem pretty weird. To most British people, the idea that you can “become working class” seems pretty foreign to most of us. That the sandwiches you buy in our supermarkets are oddly moist, again, seems pretty weird.
What Badenoch badly needs to do is find a way of talking about the fact she is a first-generation immigrant. There are, in my view, all sorts of ways that makes her a valuable addition to our politics. I am the first person in my family not to have to move countries because of politics — that is a stability that we here in the UK often take for granted, and Badenoch does not. I don’t always agree with her political positions but she is right to talk about the importance of British stability and to warn that we take it for granted at our peril. And part of what makes this country great in my view is that a first-generation immigrant can rise to become leader of the main party of the British right, as Badenoch herself has noted.
But unless she can make that a central part of her leadership pitch, she is going to be defined by interventions that to most people seem pretty odd and out of keeping with how they see politics.
Still with so many people in poverty and struggling to put a meal on the table this Christmas, one would think that our party leaders had better things to talk about.
Friday, December 13, 2024
Welsh councils still facing financial difficulties
The BBC reports that the Welsh First Minister, Eluned Morgan is confident that Wales will not see local authorities going bust, after the Labour leader of Flintshire council warned the threat of bankruptcy had not gone away.
They say that an average 4.3% funding increase for councils that was announced on Wednesday, a £253m increase for the next financial year, is less than half the budget shortfall councils are facing.
Speaking to BBC Radio Wales Breakfast, Morgan said she recognised the "massive pressure" facing local authorities, but that money was being made available for the first time "in a very very long time".
On the threat of bankruptcy, she said the government had been keeping a close eye on councils.
"We check their reserves, we check where they're at. We are confident that we are not in the situation that they are in England, where many, many councils have gone bust.
"So of course, we will keep monitoring that situation," she said.
Morgan also criticised what she called the "ridiculous system" to deal with funding to cover the increase in national insurance (NI) contributions for public sector employers.
Welsh ministers will not find out how much funding will be available until May or June next year, from the Treasury at Westminster.
The changes to NI begin at the start of next April.
She said she would be urging Chancellor Rachel Reeves to give the Welsh government better foresight.
She said she was "pretty miffed", but that she expected increased contributions for people employed directly by the public sector to be fully covered.
There is still uncertainty over whether private companies or charities who provide services for the public sector will be included.
The first minister said that the 4.3% average funding boost for councils would - to an extent - alleviate any shortfall.
Charities and voluntary groups, the private care sector as well as many GP and dental practices have warned of the potentially damaging affects of NI increases on them.
The financial pressures are bad enough, but the UK government is adding to them. The Chancellor may have said that she will cover the employers' national insurance for public sector employees but she has not specified that she will pay for all of it, while the definition of what exactly a public sector employee is in unclear.
This is a point covered by the Welsh Finance Secretary, here. He told the Senedd Finance Committee that the the UK Government plans to use the Barnett formula to decide how much Wales will receive based on the costs in England and that Wales' share may turn out to be less than we need. Furthermore Directors of Finance are unlikely to see any of that money until June.
The cost to councils that will not be met by the UK government is the additional employers NI and the minimum wage bill for external providers. This is particularly acute in social care where social service departments rely on these companies and will have to pay extra from April to meet additional costs.
The shortfall in meeting external providers' additional NI contributions could be about £60m across Wales with an additional £60m cost to meet the increase in the minimum wage. So in addition to the millions social service departments are overspent so far this year there will be an additional financial burden councils will need to find of about £120m.
That is not an insignificant amount. What a mess Labour have made of this so early in their administration.
Thursday, December 12, 2024
DWP imposing misery on carers
The paper says that more than 262,000 repayable overpayments totalling in excess of £325m were clawed back from carers who had – mostly unwittingly – fallen foul of carer’s allowance rules, while 600 carers were prosecuted and received criminal records after DWP civil servants referred their cases to the Crown Prosecution Service.
They add that campaigners have claimed that the National Audit Office (NAO) report highlights the scale of the misery and hardship inflicted on carers over the period as well as the extent of the failure by the Department for Work and Pensions (DWP) to tackle overpayments:
A Guardian investigation this year revealed how Conservative ministers allowed overpayments to grow almost unchecked for years, despite senior officials promising MPs in 2019 that new data-matching technology would eradicate the problem.
There are currently more than 134,500 unpaid carers repaying overpayment debts of more than £251m after falling foul of “cliff-edge” rules on earnings limits. A carer who earned £1 more than the £151 threshold for 52 weeks would have to pay back not £52 but £4,258.80.
The NAO report revealed that staffing levels in the carer’s allowance processing unit were designed to meet internal financial savings targets rather than to ensure carers were prevented from inadvertently accruing overpayments.
As a result, only half the electronic alerts identifying potential benefit overpayments were investigated annually. The number of staff assigned to check alerts and investigate cases was cut by 14% over the past two years.
The DWP has repeatedly refused to accept that it has any responsibility to identify all earnings breaches or alert individuals to potential overpayments, arguing that in law the onus is on claimants to inform it of any changes that could affect their eligibility for carer’s allowance.
On average, family carers – most of whom are in poverty – ended up repaying nearly £1,000 in earnings-related overpayments last year, although the Guardian has revealed that since April two cases had accrued more than £20,000 in overpayments, suggesting the DWP failed to spot the breaches for nearly five years.
That so many family carers have been caught up in this scandal of the DWP’s own making is scandalous.
