Government policy

This paper is concerned with the likely impact of the Spending Review on living standards in Northern Ireland and especially the living standards of those with the lowest incomes. The cuts in Treasury funding for Northern Ireland are greater than many assume. By 2014-15 all Departments will have substantially lower current budgets in real terms than in 2010-11. The cuts in public spending are occurring in a context of a stagnant employment rate, rising unemployment and restricted opportunities for younger people.

by Nick Bailey

In July this year, the Department for Communities and Local Government (DCLG) published the Listening to Troubled Families report with a great fanfare. Its stated aim was ‘to inform [government] thinking and policy development’. At its launch, Secretary of State Eric Pickles hailed the report as providing ‘real insights into these families’ lives’ and as offering a ‘true understanding of the challenges local authorities face’. The government had set aside £448 million to tackle the problems identified. In short, the report was portrayed as a solid piece of research driving an ‘evidence-based’ approach to policy making. 

Plans to cut a further £10 billion from social security spending by 2016-17 were signalled by Chancellor of the Exchequer George Osborne in his speech to the Conservative Party conference. These cuts would come on top of the £18 billion savings already announced by the government in 2010. In a joint newspaper article with Iain Duncan Smith, Work and Pensions Secretary, Osborne suggested that steps would be taken to limit the number of children in workless families for whom benefits are paid, and to withdraw housing benefit from young people under 25 who have never worked. Prime Minister David Cameron also specifically referred to housing benefit cuts for young people in his own conference speech a few days later.

The government's decision to change the way benefits and tax credits keep up with rising prices will cost the typical family with children £614 a year, says a think-tank analysis.

In the 2010 Budget the Chancellor announced that from April 2011 the uprating of benefits, tax credits and public service pensions would be based on the consumer prices index (CPI) rather than the retail prices index (RPI) - typically producing a lower figure. The think-tank report looks at what this change will mean for family budgets in the five years after the introduction of the new universal credit.