CNJ COMMENT - Devil of the spending cuts lurks concealed in the detail

Published: 28 October, 2010

REAMS of articles have been published about the Comprehensive Spending Review. Hours of newscasts have been aired on TV about George Osborne’s statements in the Commons.

Yet, a week later, we are still left with many unknowns.

While announcements are made of great savings – several billions here, more billions there – when it comes to detailed analysis, the sums don’t easily fall into patterns.

The exact nature of the savings remains unclear.

The decision to end a council tenant’s tenure for life and to reduce tenure for new tenants to five years with a cap on their housing benefits should cut expenditure – but by how much? And will it be a significant saving?

All this is unknown.

It may lead to a reduced bill for social housing and yet create a larger bill for housing benefit.

For instance, it is thought that every year about a 1,000 new council properties fall empty – either through the death of a tenant or a tenant moving out of the borough.

From next year their rents should be fixed at 80 per cent of the market rent. Thus, the rent of a two-bedroom flat today of £100 a week will rise to a net figure of nearly £300.

Assuming at least half of council tenants draw housing benefits, then the higher benefit bill will roughly equal the higher total rental. 

Gain: Little, if anything.

Here we would see the revolving door phenomenon at work.

To complicate things, because the government’s proposals are hedged with qualifications, it is still not clear whether councils will be given discretionary powers to impose an 80 per cent charge on new tenancies. In other words the charge may not be made at all, depending on a council’s housekeeping and play of politics.

The sums are, in fact, still being worked out by councillors and their advisers at Town Halls – sums based on politically charged statements from Whitehall that make the sort of headlines that fit in with the strategy of the Tory-Lib-Dem Coalition. But statements, nonetheless, that under scrutiny may yield surprises – surprising to all parties.

There has been a gale of propaganda from Whitehall. 

To a large extent this has covered up the detail. 

But the devil remains in the detail – and that is still an unknown.