One day to go and the predictions for the Budget are getting gloomier by the hour. Better hope that we don’t follow the much-heralded Canadian model for cuts too closely.
The National Housing Federation (NHF) warns this morning that the housing budget could be cut by a third, putting at risk 140,000 homes and 200,000 jobs and adding 350,000 families to waiting lists.
This week’s Inside Housing has a survey showing that a fifth of senior housing professionals believe the cuts could be more than 30% and Caroline Thorpe has an interesting take on three different Budget scenarios. At this rate her imagined £1m bet on New Zealand to win the World Cup is looking like the best option.
Meanwhile a poll commissioned by the Chartered Institute of Housing (CIH) says that the housing shortage is already so acute that 63% of adults believe their children will not be able to afford a home in the community where they live.
But it’s still unclear how much we’ll really know tomorrow. The emergency budget covers this financial year although it will also set the tone for the rest of this parliament. However, the detail for the years ahead may only come in the spending review in the Autumn.
In the meantime, departments will have to justify all their programmes in front of a star chamber of senior ministers and outside experts.
That was the technique adopted by the Liberal government in Canada to cut public spending in the early 1990s. That turned a big budget deficit into a healthy surplus within a few years and is now widely held up as a model for Britain to follow.
The Canadian system is very different from ours, not least in having a federal system, but there are some uncanny parallels too.
The cuts there included ending the federal government’s national affordable housing program (sound familiar?) and devolving responsibility for housing to provincial governments. Associated funding for repairs and subsidised rents was cut year on year after that. There was no more federal funding for housing for another 15 years and even then it was a time-limited two-year initiative.
The results of the cuts in housing and other social programmes such as health and education were a big increase in inequality and a surge in homelessness. According to social policy expert Michael Shapcott of the Wellesley Institute: ‘Before the 1990s homelessness was mostly seen as a involving single, transient men. After the cuts we saw homeless families and young children for the first time and seniors [people 65 and older] began turning up at shelters for the first time.’
Homeless shelters were overwhelmed by demand and tent cities grew up in major cities. Churches, synagogues and mosques responded by opening their basements as shelters and the government was eventually forced to provide emergency funding. In Toronto, even now 4,000 people a night including 700 seniors sleep in shelters.
‘Canada provides an excellent example of exactly what not to do,’ Shapcott told me for what is sadly the last-ever issue of ROOF magazine. ‘We have a very clear record of how housing cuts and cuts to other social programmes led to devastating consequences for disadvantaged communities and individuals.’
Perhaps most tellingly, what is seen here as an ideal way to cut the deficit is now seen there as an over-reaction. Michael Ignatieff, the current leader of the Canadian Liberal Party, has several times apologised publicly for the excesses of the cuts in general and the housing cuts in particular.
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