Spending review 2015 summary
The following is a summary of the key announcements in the 2015 spending review, which affect disabled people
Education and Skills
Special educational needs
The government is investing in new school places for children with special educational needs and disabilities.
To reduce government debt, the student loan repayment threshold for Plan 2 borrowers will be frozen until April 2021. The discount rate applied to student loans will be revised to 0.7% above RPI, to bring it into line with the government’s long-term cost of borrowing. Taken together, this will reduce the government’s estimate of the long-term student loans subsidy to around 30%. This may increase student repayments.
The government will expand tuition fee loans to 19 to 23 year olds at levels 3 and 4, and 19+ year olds at levels 5 and 6 to provide a clear route for learners to develop high-level technical and professional skills. This will benefit an estimated 40,000 students a year. The government will also consult on introducing maintenance loans for people who attend specialist, higher-level providers, including National Colleges.
Financial support for higher education will be increased to enable people to study for a degree. The government will lift the age cap on new loans to postgraduates from 2016-17 so they are available to all those under 60.
The government will introduce new part-time maintenance loans from 2018-19 to support the cost of living while studying. The government expects 150,000 part-time students could benefit each year by the end of the Parliament.
For all STEM subjects, tuition loans will be extended to students wishing to do a second degree from 2017-18.
At Summer Budget it was announced that three million new apprenticeships will be created by 2020, funded by a levy on large employers.
The apprenticeship levy will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill. A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3 million.
Less than 2% of UK employers will pay the levy.
Into work support
Introduction of a new Work and Health Programme after current Work Programme and Work Choice contracts end, to provide specialist support for claimants with health conditions or disabilities and those unemployed for over 2 years.
Local authorities will be able to levy a "social care precept" of up to 2% in council tax which must be spent exclusively on social care. There will also be an extra £1.5 billion in the Better Care Fund.
However, in future, local authority funds may reduce for some councils with the abolition of the revenue support grant, currently paid out from the pooling of LA business rate collections. The Department for Communities and Local Government (DCLG) will consult on changes to the local government finance system to pave the way for the implementation of 100% business rate retention by councils (the consultation will take into account all the main resources currently available to councils, including council tax and business rates) and the phasing out of the revenue support grant.
Mental health spending
There will be £600m extra funding for mental health.
The review promises to deliver 400,000 affordable housing starts by 2020-21, focussed on low cost home ownership but also refers to an additional commitment to building an additional 8,000 specialist homes for older people and people with disabilities.
£500 million allocated by 2019-20 for the Disabled Facilities Grant, which will fund around 85,000 home adaptations that year. This is expected to prevent 8,500 people from needing to go into a care home in 2019-20.
The Warm Home Discount scheme will also be extended to 2020-2021. This currently gives certain low-income households a one-off reduction of £140 on their electricity bill. People can apply for the scheme online through their supplier.
NHS England will receive £10 billion more a year in real terms by 2020 than in 2014-15.
Benefits and tax credits
The tax credits income threshold will remain at £6,420 from April 2016 and the tax credits taper will remain at 41% of gross income
From April 2016 the amount by which a tax credit claimant’s income can increase in-year compared to their previous year’s income before their award is adjusted (the income rise disregard) will be reduced to £2,500 as announced at Summer Budget, ensuring tax credit entitlement better reflects claimants’ actual income
With reference to tax credits and the extension of 30 hours free childcare for working families. Those on tax credits will be eligible in cases where a parent or their partner (if they have one) is in work and the other parent is disabled or a carer; or where a parent or their partner (if they have one) is taking time away from work on paid sickness or parental leave.
Additional Discretionary Housing Payment funding will be made available to local authorities to protect the ‘most vulnerable’ including those in supported accommodation.
Cap on the amount of rent that Housing Benefit will cover in the social sector to the relevant Local Housing Allowance, which is the rate paid to private renters on Housing Benefit. This will include the Shared Accommodation Rate for single claimants under 35 who do not have dependent children. This will apply to tenancies signed after 1 April 2016, with Housing Benefit entitlement changing from 1 April 2018 onwards
Limit Housing Benefit and Pension Credit payments to 4 weeks for claimants who are outside Great Britain, from April 2016. At present, Housing Benefit recipients can go abroad for up to 13 weeks while continuing to receive Housing Benefit.
A commitment to provide greater up-front support for claimants with disabilities and health conditions from the start of their claim and enable them to be referred to specialist support from day 1 where appropriate. To support this the Spending Review announces a real terms increase in funding to help people with disabilities and health conditions to get work and remain in work. This includes:
- a real terms increase in spending on Access to Work, providing specialist IT equipment, or support workers, to help a further 25,000 disabled people each year remain in work
- expanding the Fit for Work service supporting more people on long-term sickness absence with return to work plans
- over £115 million of funding for the Joint Work and Health Unit, including at least £40 million for a health and work innovation fund, to pilot new ways to join up across the health and employment systems
In addition to these measures the government wants to improve links between health services and employment support, recognising timely access to health treatments can help individuals return to work quicker. The government will publish a White Paper in the New Year that will set out reforms to improve support for people with health conditions and disabilities, including exploring the roles of employers, to further reduce the disability employment gap and promote integration across health and employment.
The Government's intention is to extend job search conditionality to a further 1.3 million claimants per year by 2020-21.
From next year the basic state pension will rise by £3.35 to £119.30.