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Chancellor George Osborne


Disabled people among the hardest hit by spending review


Osborne limits employment support allowance to one year


Anna Bawden

guardian.co.uk Wednesday 20 October 2010 21.55 BST


Disabled people will be among the hardest hit by the comprehensive spending review. The chancellor announced savings of £2bn by limiting to one year the length of time people can claim the contributory element of employment support allowance (ESA).


ESA was brought in to replace incapacity benefit and supports people who are unable to work because of ill health or disability. These cuts mean that people who moved on to ESA and who previously worked will only be able to claim it for one year. At the moment, there is no time limit and people can claim ESA until they find another job.


After one year, people with assets, savings or partners who work will no longer receive benefits. Single people with no assets may be able to qualify for a means-tested safety net, but everyone else will have to manage on their husband or wife’s salary – no matter how low it may be – or dip into any private savings they may have.


The change will affect hundreds of thousands of people, as 1.7 million Britons have moved from incapacity benefit to ESA. Many of them are likely to have been put on the contributory version of the benefit.


Critics said the announcement penalised people who had paid national insurance contributions for years precisely to cover them in the eventuality that they are unable to work through sickness or incapacity. They also said that the decision would make it much harder for disabled people to find jobs.


Those entitled to ESA get access to specialist support to help them find employment, such as advice on CVs and interviews.


Richard Hawkes, chief executive of the disability charity Scope, said: “The government has not delivered on its promise to support disabled people into work, penalising those on ESA and jobseekers’ allowance who have worked and paid national insurance in the past and who now cannot rely on getting the support they need when they need it, in an increasingly difficult employment market. Disabled people and their families do not have ‘broad shoulders’, so why are they bearing the brunt of these cuts?”


The spending review also hit benefits for the 380,000 disabled people living in care homes. The government intends to save £135m by cutting the mobility component in disability living allowance for people in residential care.


This is the money that helps disabled people get to the shops or visit their families. With no mobility funding, disabled people with no family or friends nearby will in effect become prisoners in their care homes, unable to get out at all.


Read in Full:  http://www.guardian.co.uk/society/2010/oct/20/spending-review-disabled-people


Spending Review 2010: Key points at-a-glance


Here are the key points of Chancellor George Osborne’s Spending Review.


  • *About 490,000 public sector jobs likely to be lost
  • *Average 19% four-year cut in departmental budgets
  • *Structural deficit to be eliminated by 2015
  • *£7bn in additional welfare budget cuts
  • *Police funding cut by 4% a year
  • *Retirement age to rise from 65 to 66 by 2020
  • *English schools budget protected; £2bn extra for social care
  • *NHS budget in England to rise every year until 2015
  • *Regulated rail fares to rise 3% above inflation
  • *Bank levy to be made permanent

Listed below are details of what each department will spend between 2011 and 2015 based on government figures.


Current spending includes items such as salaries, hospital medicines, and school text books. Capital spending includes assets such as school buildings, roads and bridges.


Business, Innovation and Skills


Annual budget: £21.2bn


What’s being cut: Current spending down 25%; capital spending down 52%


Administration costs to be cut by £400m with 24 quangos axed. Train to Gain programme to be axed. University teaching budget to be cut by 40% and further education budget to fall by 25%. The science budget to be frozen – in cash terms – rather than cut as had been feared. Funding for 75,000 adult apprenticeships a year.


Cabinet Office


Annual budget: £2.6bn


What’s being cut: Current spending up 28%; capital spending down 28%.


Support for citizenship and “big society” projects. Cabinet Office officials to move into Treasury. Civil List cash funding for Royal Household to be frozen next year. New system of funding for Royal Household from 2013.


Communities and Local Government


Annual budget: £33.6bn


What’s being cut: Local Government – current spending down 27%; capital spending down 100%: Communities – current spending down 51%; capital spending down 74%


Councils will see a 7.1% annual fall in their budgets. But ring-fencing of local authority revenue grants will end and councils will have freedom to borrow against their assets. Funding for social housing to be cut by more than 60%, with new tenants having to pay higher rents. But the government hopes these changes will free up funds to build 150,000 new affordable homes over the next four years.


Culture, Media and Sport


Annual budget: £2bn


What’s being cut: Current spending down 24%; capital spending down 32%


Administration costs to be cut 41% while core arts programmes will see a 15% fall in funding. Free museum entry to remain in place. BBC licence fee to be frozen for next six years. Corporation will also fund World Service and BBC Monitoring. Adds up to equivalent of 16% savings over the period.


Watch: Osborne on museum funding


Defence


Annual budget: £46.1bn


What’s being cut: Current spending down 7.5%; capital spending down 7.5%


The RAF and navy will lose 5,000 jobs each, the Army 7,000 and the Ministry of Defence 25,000 civilian staff. The Harrier jump jets and the Ark Royal aircraft carrier are being axed while the planned Nimrod spy planes will be cancelled. Key spending decision on Trident to be delayed until 2016.


Watch: The Chancellor on defence cuts


Education


Annual budget: £57.6bn


What’s being cut: Current spending down 3.4%; capital spending down 60%


Five quangos to be abolished. But direct funding to schools in England is to be protected. Their budget will rise 0.1% in real terms each year, taking funding from £35bn to £39bn. But spending on school buildings to fall 60%. Confirmed £2.5bn “pupil premium” for teaching for disadvantaged pupils. Educational Maintenance Allowances to be replaced. Sure Start budget to be protected in cash terms.


Watch: Osborne on schools budget


Energy and Climate Change


Annual budget: £3.1bn


What’s being cut: Current spending down 18%; capital spending up 41%


Plan for tidal barrage on the Severn estuary scrapped. But £200m funding for wind power development and £1bn for green investment bank.


Environment, Food and Rural Affairs


Annual budget: £2.9bn


What’s being cut: Current spending down 29%; capital spending down 34%. Investment to continue in flood defences – £2bn over period to 2015.


Foreign Office


Annual budget: £2.2bn


What’s being cut: Current spending down 24%; Capital spending down 55%. Number of Whitehall-based diplomats reduced.


Health


Annual budget: £106.4bn


What’s being cut?: Current spending up 1.3%; capital spending down 17%


The NHS in England will see its budget rise by 0.4% over the next four years, fulfilling a Conservative election pledge to protect spending. New cancer drug fund to be provided. But £20bn in efficiency and productivity savings sought in NHS by the end of the parliament. An extra £2bn for social care by 2014-15.


Home Office


Annual budget: £10.2bn


What’s being cut?: Current spending down 23%; capital spending down 49%


Police budget cut by 4% a year, focused on bureaucracy rather than manpower. Aim to maintain “visibility and availability” of officers on beat. But some experts believe 18,000 police jobs could be lost. UK Border Agency budget to fall 20%. Counter-intelligence budget to fall 10%.


International development


Annual budget: £7.7bn


What’s being cut?: Current spending up 36%; capital spending up 20%


The overseas aid budget is to be protected from cuts but not the department’s other costs. Budget to rise to £11.6bn over four years to meet UN aid commitment. But aid to China and Russia is to stop and there will be a reduction in administration costs.


Justice


Annual budget: £9.7bn


What’s being cut?: Current spending down 23%; capital spending down 50%


Plan for new 1,500-place prison to be dropped. 3,000 fewer prison places expected by 2015. £1.3bn capital investment in prison estate.


Northern Ireland/Scotland/Wales


Annual budget: £55.5bn


What’s being cut?: Scotland’s block grant to fall by 6.8% by 2014-5. SNP ministers have said that cuts to the Scottish budget will threaten 12,000 jobs. Central funding for Wales is to be cut by 7.5% – the Welsh Assembly Government says its budget will be cut by £1.8bn in real terms over four years. Northern Ireland funding to be reduced by 6.9% over four years, First Minister Peter Robinson has said cuts to be implemented in Northern Ireland are worse than he had anticipated.


Transport


Annual budget: £13.6bn


What’s being cut?: Current spending down 21%; capital spending down 11%


£30bn set aside for capital spending, including £500m for Tyne and Wear Metro and Tees Valley bus network. Crossrail project to go ahead in London. Rise in regulated cap on rail fares to 3% above inflation for three years from 2012.


Treasury


Annual budget: £4.4bn


What’s being cut?: Treasury spending hard to quantify as current year’s spending is expected to be negative as a result of repaid loans to the banks. Current spending to be cut by 33%, capital spending to be cut by 30%.


Bank levy to be made permanent. £900m to target tax evasion. £1.5bn in compensation to Equitable Life policyholders hit by its near collapse. 15% cut in funding for Revenue and Customs.


Watch: The Chancellor on the bank levy


Work and Pensions


Annual budget: £9bn in departmental spending


Separate welfare and pensions budget: £192bn


Outcome: State pension age for men to start rising from 65 in 2018 – six years earlier than planned – and reaching 66 by 2020. Rise in retirement age for women to accelerate, also reaching 66 by 2020. The measures combined will save £5bn a year. Reform of public sector pensions to save £1.8bn by 2015, with employees likely to contribute more. Winter fuel allowance, free bus passes and TV licences for 75-year-olds protected. Cuts to child benefit for higher rate taxpayers to generate £2.5bn. £2bn investment in new universal credit. Weekly child element on child tax credit to rise by £30 in 2012 and £50 by 2012.


What’s being cut?: A further £7bn in welfare savings planned on top of £11bn already announced. A new 12-month time limit on the employment and support allowance could see an estimated 200,000 claimants moved onto jobseekers allowace and see their support reduced. Proposed 10% cut in council tax benefit budget. Under-35s only able to claim housing benefit for a room rather than a whole property. Maximum savings award in pension credit to be frozen for four years. Increased working hours threshold for working tax credits for couples with children. New total benefits cap per family.


Watch: Osborne on welfare changes


Source:  http://www.bbc.co.uk/news/uk-politics-11569160


IFS graph of the distributional impact of the Comprehensive Spending Review. From:
www.ifs.org.uk/projects/346



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