9 Nov 2015

Osborne and spending round spats

Iain Duncan Smith has written back to the Treasury suggesting they keep their paws off his universal credit budget.

A meeting later this week will take a look at the DWP’s alternative suggestions for savings. It’s thought the DWP may have outlined savings to be made on housing benefit from shared ownership schemes (housing benefit doesn’t cover mortgages).

Allies of Iain Duncan Smith feel they have fought a feisty rearguard action after the Treasury came snooping round their universal credit money, trying to sharpen the tapers and, as far as fans of UC are concerned, potentially undermining the entire project.

One Iain Duncan Smith ally talked of how the situation was complicated because the Chancellor was interested in “saving face” and “reasserting authority.” The two sides meet again later this week.

In the Treasury they emphasise how things are generally going surprisingly well in this spending round. The Chancellor, speaking as ever at a building site, said this morning that it was all going more smoothly than the previous two spending rounds.

But a lot of the trouble could be coming in the “protected” departments.

The Department for Education “protection” does not extend to post-16 education or early years.

The Health Department is worried about cutsĀ  to DCLG’s council grant (not announced today but the 30 per cent cuts over the parliament in other bits of DCLG are seen as a bad omen in local government).

The NHS says resulting cuts in adult social care (a big chunk of council spending) would knock the NHS efficiency plans off course, sending more elderly into A and E wards in avoidable accidents which care at home could stop.

For good measure, the head of NHS England, Simon Stevens, waded in in an interview in the Health Service Journal talking about his worries about extra costs from social care cuts and saying he hadn’t yet got the front-loaded spendingĀ  for the NHS he needs right now.

At the Ministry of Justice the prison estate is being eyed up for sell-off. Prisons that could follow Reading Gaol, the only one so far announced, would be ones which would catch the eye of property developers and could include Worwood Scrubs, Pentonville, Wandsworth, Leeds, Strangeways in Manchester and Horfield Bristol.

There’s long been frustration in Whitehall that other bits of the government estate don’t get flogged. Treasury traditionally has a neurosis about accusations that it sold at the wrong time and didn’t achieve maximum value.

An old plan to force departments to pay market rates for rental of properties they hold could be exhumed to put pressure on departments to re-think their assets.

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