Watch out for the unintended traps

The law of unintended consequences is a new government’s nightmare, and to mix metaphors, the chickens usually come home to roost a year or two after it has been in power, invariably as a general election looms.
In making its combination of sudden policy shifts, scrapping of quangos and CSR cuts, the coalition has opened itself wide open to the law of unintended consequences (LUC). For example, the abolition of the regional development agencies has raised a sudden question mark over the future of the unallocated EU regional funds, worth a hefty £1.3bn. If the RDAs are going, which organisation is, therefore, placed to assume the regional mantle that EU rules require for the receipt of funding?
The word ‘region’ has been banned from the CLG, to be replaced by ‘localism’, but unfortunately, the news has yet to percolate to Brussels. Watch this space, for negotiations are ongoing between UK officials and their EU counterparts, as you can be sure the coalition will not want to lose £1.3bn of funding when it is busy slashing elsewhere.
Welfare, of course, is the worst area for the LUC. The coalition has already faced flak over the abolition of child benefit for upper taxpayers with one parent at home. But take the ceiling on housing benefit. It is understandable ministers want to impose a cap. But the LUC means that families living in expensive houses in central London will, therefore, move out to cheaper boroughs, thereby placing new burdens on schools and social services there, the tab having to be picked up these councils.
As for giving local authorities control over council tax benefit, while also cutting the amount by 10%, the LUC means many councils will have to pick up this bill as well, on top of the CSR cuts. And the funding of next year’s council tax freeze means those local authorities planning modest rises to maintain their tax base in future years will lose out.
Ministers can only hope that announcements made during weeks of sleepless hyperactivity in their first months in power do not come back to haunt them.