Matt Whittaker, CEO of Pro Bono Economics, said:

“The Chancellor can rightly celebrate the modest overall improvement to economic prospects today’s OBR figures anticipate compared to our previous fortunes. The country is no longer stuck in reverse but beginning a slow first-gear crawl forward. Combined with energy costs falling, the National Insurance cut will help growth roll forwards a tad faster and push the UK’s average living standards out of the doldrums they were sinking into previously.

“But behind these averages, too many face challenges that continue to deepen. A significant minority of the UK population cannot afford to heat their homes or to eat healthy food. The number of people in temporary accommodation has hit record levels, while physical and mental health continues to deteriorate. The OBR expects household debt servicing costs to rise by £24 billion over the next year, taking repayments as a share of income back to levels last seen in 2010. And unemployment is projected to rise to 1.6 million by the end of 2024. Notions of recovery will therefore remain an illusion to many of the people across the UK who have the lowest wellbeing.

“While temporary maintenance of the Household Support Fund is welcome, there is little else in today’s announcement designed to support those in the greatest need. That is likely to mean demand on the nation’s charities continuing to climb. The charity sector is just beginning to emerge from the pandemic and cost of living crisis, and capacity remains tight – with a third of charities expecting to be unable to meet demand for their services this quarter. Indications are that charity income will gradually improve over the next year, but that recovery is fragile.

“The Chancellor’s emphasis on public sector productivity is likewise welcome but insufficient. Investing in delivering better services is the right thing to do, but he should have done more to offset the £20 billion a year real-terms reduction in spending on unprotected public services that is currently pencilled in for 2028. Failing to act on this implies a level of Austerity 2.0 which is simply unrealistic at a time when local government is faltering and courts, prisons and social care are already wrestling with difficulties. Whoever is in charge of HM Treasury at the next Spending Review will inevitably have to change course.

“For all that the Chancellor pulled a rabbit out of the hat on National Insurance, his real sleight of hand was on disappearing the crisis in local government in his statement. Councils are issuing section 114 notices at unprecedented rates, and cuts are following rapidly, including to vital community services. Among the 60% of charities responding to PBE surveys that say they work with local authorities, 28% expect a reduction in council funding over the coming year. This follows a cumulative loss of £13.2 billion to charities from local government between 2009-10 and 2020-21. People with the lowest wellbeing and the charities that support them will continue to struggle as long as this crisis remains unaddressed.”

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