Spending Review: George Osborne to pledge housing cash amid cuts

http://www.bbc.co.uk/news/uk-politics-34915218

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George Osborne is to set out government spending plans up to 2020 later, which will include billions of pounds in cuts but also new money for housebuilding.

The Autumn Statement and Spending Review will detail £20bn of cuts to Whitehall budgets and £12bn to welfare.

But the chancellor will pledge almost £7bn to make housebuilding a priority, with more than 400,000 "affordable homes" to be built in England.

Plans to mitigate the effect of tax credit cuts have also been promised.

BBC political editor Laura Kuenssberg said Conservative MPs were expecting a "serious pulling back" from the government on planned £4.4bn cuts to working tax credits, which were rejected by the House of Lords last month.

Mr Osborne, she added, would have to find a "awful lot of money" from elsewhere to cover the cost of any u-turn while some of his other spending decisions - in areas like policing and social care - were likely to be very "contentious".

The combined Autumn Statement and Spending Review, to be announced from 12.30 GMT, will set departmental spending limits for the next five years and give details of the government's taxation and deficit reduction plans.

Ministers have pledged to cut annual welfare spending by £12bn, and government departments have been asked to find a total of £20bn in savings under plans to achieve a £10bn budget surplus by 2019-2020.

The chancellor also hopes to raise £5bn with a crackdown on tax avoidance.

Mr Osborne will promise to address a "crisis of home ownership in our country", pledging a "bold plan to back families who aspire to buy their own home".

The Treasury said the chancellor would unveil "the biggest affordable housebuilding programme since the 1970s".

It will include:

Stewart Baseley, executive chairman of the Home Builders Federation, told BBC Radio 4's Today programme that attempts to stimulate supply in the last few years were beginning to feed through and recent housebuilding statistics, particularly in England, had been "very encouraging".

But Labour said the Conservatives' record had been one "of failure on every front" since 2010, with home ownership at its lowest level in a generation and a halving in the number of affordable homes to buy.

"If hot air built homes, then Conservative ministers would have our housing crisis sorted," said shadow housing minister John Healey.

"A matter of weeks ago the housing minister promised a million more homes, now George Osborne is saying they'll build 400,000 more. Rather than rate them on what they say they will do, people will judge them on what they've actually done."

The Spending Review is a five-year projection of government spending. In effect, it decides how £4 trillion of taxpayers' money will be spent by setting caps on government departments.

Explained: Which government departments will be affected?

Analysis: Latest from BBC political editor Laura Kuenssberg

Special report: Full in-depth coverage of the Spending Review and Autumn Statement

Watch: The BBC's TV coverage begins on BBC Two and the BBC News Channel at 11:30 GMT, with BBC Radio 5 Live coverage from 11:55 GMT

The Treasury has already announced that front-line NHS services in England will get a £3.8bn, above-inflation, cash injection next year. Defence spending is to be increased, as set out in Monday's Strategic Defence and Security Review.

Schools and international aid will escape cuts but the other, unprotected departments are braced for reductions to their budgets.

These include local government, the Ministry of Justice and the Home Office, with police forces expected to face more cost-cutting.

Analysis

By BBC political editor Laura Kuenssberg

This won't be a Spending Review, ministers say, that displays an attitude of cutting a little bit here and there, moving money around the balance sheet to try to smooth out the pain.

Instead they see it as a programme of strategic cuts that, while difficult, add up to something: a country where work is rewarded, where anyone who wants to get on is helped to do so, and where the state has a careful approach to spending taxpayers' money, using it judiciously where it helps and not being afraid to scrape it back where it does not.

But choosing priorities - not just protecting but substantially increasing spending on areas like health, significant new spending on housebuilding, including billions going directly to housebuilders to encourage them to get spades into the ground, and retaining what many see as generous welfare payments to the older generations - inevitably means others will lose out.