On 22 November Chancellor of the Exchequer Jeremy Hunt gave his
second Autumn statement. Against the background of a
more positive economic outlook than previously feared, the
government can now, he said, "take the long-term policy decisions
necessary to strengthen the economy and build a brighter future".
These include some tax cuts, including a 2% cut in the basic rate
of national insurance. Working age benefits, including UC, will
increase by 6.7% from April 2024, in line with CPI to September
2023; state pensions will rise by 8.5%, in line with the increase
in average earnings, in accordance with the "triple lock" policy.
Other announcements on welfare spending include a commitment to
raise the Local Housing Allowance rate from April 2024 to the 30th
percentile of local market rents, making the average private renter
receiving help with rent £800 better off next year. No mention was
made of council or housing association rents, providing further
confirmation that social landlords can expect to be free to
increase rents by up to 7.7% from April 2024.
The main reasons for the government's more positive view of the
economy are that the annual rate of inflation fell to 4.7% in
October 2023 from a high of 11% in 2022, and that OBR has recently
issued updated estimates of national output (GDP) showing that
national output returned to its pre-pandemic level by the end of
2021 and continues to grow, albeit slowly. Previous figures
forecast that the economy would not recover to its pre-pandemic
level until 2025. However, the main reason for this improved output
seems to be that net migration was also significantly higher than
previously forecast, leading to more people in work than expected;
GDP per head remains 0.6% below the pre-pandemic level.
The statement also includes a chapter on the steps the
government is taken to improve productivity in both the public and
private sectors, focussing in particular on advanced manufacturing,
green industries, the police and NHS. However, there is no mention
of the construction industry, despite substantial evidence that low
productivity is a significant barrier to increasing housing output
and reducing costs.
Some additional help is provided to support new housebuilding by
local authorities and housing associations. The Affordable Homes
Guarantee Scheme has been extended for a further year at a cost of
£3 billion. The scheme, which was launched in November 2021, allows
DLUHC to guarantee bonds issued to raise money to provide
lower-cost loans to housing associations for up to 30 years to
build affordable housing. The Public Works Loans Board "policy
margin' which allows for lower-interest loans to local authorities
to build or invest in housing has also been extended for a further
year.
£32 million has been allocated for planning initiatives that, it
is claimed, will enable the construction of more homes. Some of
this will go to help clear backlogs in local planning departments,
the rest to help support the development of various infrastructure
initiatives, including establishment of a development corporation
in Cambridge, a mass transit system in West Yorkshire and a rapid
bus transit system for Thamesmead in South East London.
Funding has also been provided for homelessness prevention and
housing for Ukrainian and Afghan refugees. The Local Authority
Housing Fund has been allocated an additional £450 million to
provide additional funding for new temporary accommodation as well
as homes for Afghan refugees, bringing total funding provided to
£1.2 billion. "Thank you payments" to households hosting Ukrainian
refugees have been extended for a further year and £120 million
allocated for homelessness prevention, including help for Ukrainian
households becoming homeless.