Spending cuts will hit vulnerable hardest, campaigners warn

Chancellor Jeremy Hunt has said the country faces ‘scary’ spending cuts, leading charities and campaigners to warn of the impacts this could have on vulnerable people.

Mr Hunt has signalled he would pursue renewed austerity to plug the government’s financial black hole after reversing on nearly all his predecessor Kwasi Kwarteng’s planned tax cuts.

But these measures are insufficient to balance the government’s fiscal books, and Hunt said that the planned two-year cap on energy unit costs would be reduced to six months, with an unspecified targeted scheme likely to replace it when it expires in April.

He also warned that further spending cuts would be necessary to restore investor confidence in government finances, despite many public services operating in a state of rolling crisis after more than a decade of austerity.

Adam Scorer, chief executive of campaign group National Energy Action, said: ‘This is an almighty trade-off. In seeking the confidence of markets, the government has created huge uncertainty for households. Everyone knows why decisions have been made at breakneck speed, but there are questions that need to be answered, and answered quickly.

‘Who will still get support? Will it include vulnerable households not on welfare benefits? Will that support be deeper for those in greatest need? What do they mean by incentivising energy efficiency?

‘Households on the lowest incomes are already rationing their energy usage to dangerous levels. £2,500 is beyond their means. Many vulnerable people were holding on by their fingertips. Government has to be very, very careful it doesn’t prise them away.’

Since Hunt has warned there will be public spending cuts, the Local Government Association (LGA) has launched a campaign to save local services, as councils finances are ‘on a cliff edge.’

There is a risk local government could lose out on £3.4 billion of funding in 2023/24 and £4.5 billion in 2024/25, with inflation already dramatically affecting budgets.

Cllr James Jamieson, Chairman of the LGA, wrote for Politics Home: ‘Without certainty of adequate funding for next year and beyond, and given the funding gaps councils are seeing, councils will have no choice but to implement significant cuts to services including to those for the most vulnerable in our societies.

‘Local government remains the fabric of our country, as has been proved during the hugely challenging few years we have faced as a nation.

‘With long term funding – to cover increased cost pressures and invest in local services – and certainty, councils can make innovative and meaningful decisions over their finances, change lives and communities for the better, alleviate pressures on other parts of the public sector and support growth.’

Story by Chaminda Jayanetti and Georgie Hughes

Photo by QuinceCreative