Uncertain times have led to an uncertain Budget. Chancellor Philip Hammond freely admitted to Sunday media interviewers, and reiterated in his Budget speech on Monday, that no Brexit deal would most likely require him to return to the Commons with an emergency Budget in the New Year. Although he declared himself “confident” that the UK will secure a deal, the chancellor betrayed his unwillingness to look too far ahead into the future by presenting a Budget full of short-term one-off payments and promises to add funding to existing programmes.
For those in local government, this Budget is mainly a disappointment. While additional resources to support frontline delivery are always welcome, the resources promised in this Budget are simply not enough even to begin to help councils develop sustainable solutions to tackle the ever-increasing demand for critical public services. Take children’s services as an example. UK government figures revealed that councils in England overspent on children’s services by more than £800m in the 2017/18 financial year. The chancellor’s pledge to provide £84m over the next five years to expand children’s social care programmes to 20 more local authorities will barely scratch the surface of what is needed to assist councils to provide suitable care for England’s growing number of vulnerable children and young people.
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Looking at the Budget’s measures to “solve the productivity challenge”, councils will welcome the government’s commitment to co-fund a new Future High Streets Fund of £675m to help them develop formal plans to transform struggling high streets. The crowd-pleasing announcement that businesses with a rateable value of or below £51,000 will see their business rates cut by a third was also packaged as a measure to help high streets. The Treasury has confirmed that councils will be reimbursed for any shortfall that the rates cut causes to revenue raised through business rates retention. This is a positive development that will incentivise councils to reinvigorate their town centres and make them the springboards for enhanced local economic growth.
The loudest silence in the Budget came in the section on devolution. Despite the chancellor triumphantly asserting that the government is set to “go further” on the devolution agenda, the closest he came to a devolution announcement for the English regions in this Budget was the confirmation that a ‘special economic area’ would be developed in South Tees.
The Industrial Strategy received a £1.6bn cash injection, and more money was allocated to the Transforming Cities Fund (taking it up to £2.4bn), regional transport and academic research projects. But creating funds for councils to bid into is not devolution. Devolution is about local leaders having the power and resources to make decisions affecting their local area with no strings attached, and this Budget only confirmed the growing fear in the local government sector that the government has finally ditched the Osbornite zeal for decentralisation. The lifting of the Housing Revenue Account borrowing cap, a rare new fiscal freedom for councils which was promised by the prime minister at last month’s Conservative Party Conference, received a brief mention, but no detail was offered on when the cap would be lifted.
“The era of austerity is finally coming to an end,” boomed the chancellor to the cheers of Conservative backbenchers. The Budget’s planned increase in public spending has created some winners, with the NHS in England set to see a £20.5bn real terms rise in funding over the next five years. But elsewhere, a small number of short-term fixes and new funding pots will not signal the end of austerity. Uncertainty reigns once more, as all eyes now return to the Brexit negotiations that will determine whether this Budget will survive beyond the current financial year.