The Government is going in the right direction, but Reeves' welfare cuts are the wrong choice at the wrong time

27 March 2025, 23:51 | Updated: 28 March 2025, 00:28

You would be forgiven for missing the positive announcements made by the government this month.

A huge investment in housebuilding, more employment support for young people and increased spending on rough sleeping are significant interventions that show ministers are serious about tackling homelessness and getting the government working again.

If you missed them – it will likely be because these measures have been overshadowed by the finer details of last week’s ‘Pathways to Work’ Green Paper and more recently, the Chancellor’s Spring Statement. In the statement, she announced incapacity benefits will be halved and frozen to balance the books. This is on top of last week’s news that under 22s will no longer be able to claim this health top-up.

Unfortunately, we’ve been here before – and we know it doesn’t work.

There are plenty of examples over the decade or more of tightened government spending – but a more recent one springs to mind.

On the eve of the first lockdown then Chancellor Rishi Sunak froze Local Housing Allowance (LHA), the housing benefit supposed to help those on the lowest incomes pay the cheapest rents.

By the time it was unfrozen, the government saved somewhere north of three-quarters of a billion pounds. But real life can’t be captured in a spreadsheet and this real terms cut was a disaster.

Homelessness increased – though the full impact was contained by measures like the Universal Credit uplift and eviction ban. Then, when these safety nets were removed, it soared to near-record levels. You can’t blame the LHA cut entirely for this – but it is widely accepted to be a key driver.

Setting aside the human misery of homelessness or the life-threatening danger of rough sleeping, the cost to the taxpayer of getting someone off the streets and into emergency accommodation is enormous. So big in fact, it’s repeatedly cited as the cause of several councils teetering on the edge of bankruptcy.

These connected problems – of record homelessness and councils unable to cope with demand – were a tricky inheritance for the new government last year and ones they had so far sought to address.

Until last week’s announcement of benefit cuts, there was a coherence to their approach in ministers’ recognition that the whole of government needed to face the same way if these problems were to be solved.

The Spring Statement has not blown that aside – but these cuts only create confusion at a time when clear thinking and concentrated action is more important than ever.

Homelessness continues to increase – the number of 16-24-year-olds facing homelessness is at record levels – just as young people struggling to find work remains stubbornly high.

The government is going in the right direction, but these cuts feel like the wrong choice at the wrong time.

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