Rip-off News round-up. Our pick of the last week's media (Thu 2nd Mar)

Schools in England 'to see first real-terms funding cuts in 20 years'

Spending per pupil is to fall 6.5% by 2019-20, according to the Institute for Fiscal Studies (IFS), although it added that school funding had been well protected over the past two decades. Sixth-formers have been facing a continuing squeeze on budgets, with spending per further education (FE) student falling by 6.7% between 2010-11 and 2015-16 and a further drop of 6.5% expected over the next few years. It means that funding for 16- to 18-year-olds is no higher than it was almost 30 years ago. The IFS study examines education spending for different age groups – from early years to universities – over a number of years. It found that the biggest spending increases over the past 20 years have been on schoolchildren in England, with £4,900 currently spent on each primary school pupil and £6,300 spent per secondary student. In both cases, this is around double, in real terms, the amount spent in the mid-1990s. But the report shows that school spending is now falling and will drop by 6.5% over the course of this parliament. Regarding older children, the IFS report warns that 16-18 education has been “the biggest loser from education spending changes over the last 25 years”, adding: “It experienced larger cuts in the 1990s than other sectors, smaller increases during the 2000s and is currently experiencing the largest cuts. This long-term squeeze in resources is a major challenge for the sector as a whole.” Further education spending per student was 45% higher than secondary school spending in 1990, but will be around 10% lower in 2019-20. Luke Sibieta, one of the report authors and an IFS associate director, said: “Over the next few years, both further education and schools are due to experience cuts... For FE, this comes on the back of tight funding settlements for decades that will leave spending per student the same in 2020 as it was in 1990. The lack of priority given to FE by successive governments in spending settlements does not seem sustainable.” GUARDIAN

Typical household incomes in the UK will not grow for the next two years

In five years' time, median income will be 4% higher than it is now, the Institute for Fiscal Studies (IFS) predicts. This is due to the "long shadow" of the financial crisis. The recession and tepid recovery mean that from the start of the crisis to 2021, households will suffer the worst income squeeze for 60 years, it says. They will be £5,000 a year worse off than they might have expected. Tom Waters, an author of the report, said: "Even if earnings do much better than expected over the next few years, the long shadow cast by the financial crisis will not have receded." This was generally the result of small increases in wages, low productivity levels, tax and benefit policies and the state of the UK economy. The squeeze would be felt worst by low-income households with children, he said, owing primarily to the four-year freeze in working-age benefits. In contrast, pensioners would see their income growing faster than working-age households - a reversal of the position a decade ago. "Once you account for their lower housing costs and smaller household size, median income is projected to be nearly 8% higher for pensioners than for non-pensioners by 2021-22, having been nearly 10% lower in 2007-08," the report said. Campbell Robb, chief executive of the Joseph Rowntree Foundation, said: "These troubling forecasts show millions of families across the country are teetering on a precipice, with 400,000 pensioners and over one million more children likely to fall into poverty." He added: "It is essential that the prime minister and chancellor use the upcoming Budget to put in place measures to stop this happening. An excellent start would be to ensure families can keep more of their earnings under the Universal Credit." BBC NEWS

State pension age 'could rise above lifespan' in poorer areas, says MPs committee

The Work and Pensions Committee said the state pension age would need to rise above 70 by 2060 to make the current policy of increasing the pension amount sustainable. Currently, the state pension age is set to be 67 for both men and women by 2028. The committee said male life expectancy was below 70.5 in 162 areas in Scotland, and in 26 areas in England. By contrast, male life expectancy in the area of Westminster, which includes Mayfair and Covent Garden, was 92.9 years. State pensions rise each year by the inflation rate or whichever is highest of average earnings or 2.5% - as part of the so-called pensions triple-lock. The government said it was committed to the policy until 2020 at least. As a result of triple-lock policy, the state pension has risen by £1,100 since 2010. Back in November the committee said the policy should be scrapped. Frank Field, committee chairman, said: "With the triple-lock in place, the only way state pension expenditure can be made sustainable is to keep raising the state pension age. This has the effect of excluding ever more people from the state pension altogether. Such people will disproportionately be from more deprived areas and manual occupations, while those benefitting most will be the relatively prosperous." He said that the state pension will be at a level by 2020 where it will provide a "decent minimum income" for the older generation and the triple-lock "will have done its job and it will be time therefore to retire it". Instead of the triple-lock, the committee said the new state pension and basic state pension could be linked simply to average earnings - which the Institute for Fiscal Studies estimates would save 0.8% of GDP (Gross Domestic Product) a year. That would be a real terms reduction of £15bn at today's prices, the equivalent to 4p on the basic rate of income tax, it said. Historically, pensions were linked to inflation rather than earnings, which reduced pensioner incomes relative to those of the working population. BBC NEWS

'Rigged' system means 83% of working families living in rented homes cannot afford to buy a new-build property

Housing charity Shelter found that 83 per cent would not be eligible to buy such a property, even if they used the Help to Buy equity loan scheme, which only requires a deposit of 5 per cent. The charity's research identified the West Midlands as the least affordable region, with 93 per cent of privately renting families struggling to afford to buy an average new home in the area, which costs £206,950. It also found just over half - at 51 per cent - of new homeowners had experienced problems with their properties including issues with construction, unfinished fittings and faults with utilities. Shelter went on to claim that the current housbuilding system was 'rigged' and needed to be replaced. It said the current 'speculative' way that housebuilding worked resulted in a conflict of interests and a highly combative local planning process, with landowners wanting to maximise their windfall up-front, finance providers wanting to minimise risk and the local community wanting to minimise the impact. It called for the current approach to be replaced with a 'new civic housebuilding' system that supports the building of new, affordable high quality homes, with greater powers for local authorities over land in their area. Under the new scheme, land would be sold to the development group with the proposal that most closely met the needs of the community, rather than selling to the highest bidder alone. Shelter said that lower land prices would mean developers did not need to keep house prices 'artificially high' to turn a profit. Under Shelter's proposed initiative, landowners could choose to sell at reasonable prices, or to invest their land as equity and own shares in a development, taking long-term returns and a share of the profit. Shelter said civic housebuilding that met the needs of communities was used to deliver the Georgian 'new towns' of Edinburgh and Bath, the Edwardian garden cities and the post-war new towns. DAILY MAIL

Sir Philip Green's reputation 'still stained' despite BHS pension deal

Retail tycoon Sir Philip Green's £363m payment into the BHS pension scheme does not wipe away the stains from his reputation, a senior MP has said. Business committee chairman Iain Wright told the BBC that the payment does not necessarily safeguard his knighthood. Sir Philip agreed the settlement with the regulator to help fill the failed retailer's pensions black hole. Under the deal with the Pensions Regulator announced on Tuesday, former BHS workers will get the same starting pension that they were originally promised. But the protection against inflation is not as strong. The new scheme offered benefits of around 88% of the value of their full BHS scheme. Sir Philip's contribution is significantly less than the £571m pensions deficit BHS was left with. Sir Philip owned BHS for 15 years before selling it for £1 to former bankrupt Dominic Chappell. Mr Wright welcomed the pensions deal, saying  that Sir Philip had a moral duty to right some of the wrongs committed under his watch. "It sends out a very powerful message. You might try to sell a business. You might try to flog it off on the cheap because you don't want to deal with the pension deficit, but the pension regulator said we'll come after you and we'll make you pay big money in order to safeguard the interests of pensioners and that can only be a good thing," the MP said. He said Sir Philip's knighthood was a separate issue and nothing had changed in his opinion since the House of Commons unanimously backed a non-binding motion to strip Sir Philip of his title last October. BBC NEWS

Bovis to pay £7m to compensate customers for poorly built homes

Bovis Homes is to pay £7m to repair poorly built new homes sold to customers, raising fresh questions about the standards of new-build properties across the country and the regulation of the market. The company – one of the biggest housebuilders builders in Britain – will pay compensation after angry customers formed a Facebook group accusing Bovis of pressuring them to move in to incomplete houses so it could hit sales targets. The boss of Bovis apologised to customers on Monday for the poor quality of their houses and promised to finish them “to their satisfaction”. He refused to state how many homes needed the urgent repair work, or how much it will cost to fix each house. The company also refused to say which developments were worst affected, but it is understood that many of the problem homes are in Kent. The announcement led to more than £100m being wiped off the stock market value of Bovis, with its shares falling 10% to 757p. The news comes amid growing complaints about the quality of new homes and the organisation that sets the standards for new-build properties. Critics claim NHBC , which provides 10-year warranties for most new homes in Britain, is failing to protect consumers. Another recent controversy over new homes has seen Britain’s largest housing association, Clarion Housing Group, agree to buy back some properties on a housing development in the east London borough of Havering. Oliver Colvile, the Conservative MP who chairs an all-party parliamentary group on new builds, called for an independent ombudsman to hold housebuilders to account. He said: “There is a genuine need for more housing but we need to ensure they are going to be good quality housing rather than the sometimes frankly rubbish.” The affected customers have been left nursing problems such as faulty plumbing, no guttering, and half-finished tiling. Rob Elmes said he was offered £3,000 if he and his wife completed on 23 December, but declined the offer because of the defects with their £320,000 three-bedroom property in Inkberrow, Worcestershire. Helen Batt said her £389,995 Bovis home in Maidstone, Kent, had no turf in the back garden, the wrong kitchen units and had not been carpeted. Bovis built almost 4,000 homes last year, but said 180 properties that should have been completed in 2016 had yet to be handed over to buyers. GUARDIAN

Overdraft charges are elephant in the room, say MPs

Bank overdrafts were the major source of high-cost borrowing for millions of people, the All Party Parliamentary Group on Alternative Lending concluded. The costs can exceed those of payday loans, it said in a report. However, further price caps - as seen in the payday sector - may not be appropriate, the MPs said. Banks made £1.2bn in unauthorised charges each year, the committee heard during evidence, paid by those who were least able to bear the cost. The committee said there were concerns over the transparency of charges and how easy it was to compare between different banks. The model of "free banking", whereby banks clawed back costs through overdraft charges, required "government or regulatory attention", it said. In its report on bank accounts published in August, the Competition and Markets Authority decided against a cap on charges. However, the Financial Conduct Authority has now announced that it will examine the issue in detail itself. In its report, the parliamentary group said that regulators should concentrate on competition and conduct. BBC NEWS