The chancellor has unfrozen housing benefits and announced positive devolution news in his Autumn Statement, but signaled tighter public spending despite raising the National Living Wage.
Jeremy Hunt used his set piece financial speech to confirm the uprating of the Local Housing Allowance rate ‘to the 30th percentile of local market rents’, giving ‘1.6m households an average of £800 of support next year’
Localis chief executive Jonathan Werran said the Chancellor of the Exchequer ‘had put on his listening ears to take heed of the local government’s plea for short-term assistance’ with the move, giving ‘welcome immediate relief to those local authorities that risked being sunk financially by burgeoning costs of homelessness and temporary accommodation’.
On devolution, Mr Hunt announced more powers will be offered to areas with a level 3 deal and confirmed new deals with Greater Lincolnshire and Hull and East Yorkshire.
Cornwall Council will get a level 2 deal and Lancashire CC, Blackpool Council and Blackburn with Darwen BC have agreed a plan to create a Lancashire Combined County Authority.
Phil Riley, leader of Blackburn with Darwen Council, said: ‘It’s a real triumph for everyone involved to have finally made a start on the devolution of powers to Lancashire after many false starts.
‘This will give Lancashire a voice both nationally and, in the North West, allowing the region to start to compete on an even playing field with our neighbours in Manchester and Liverpool.’
But there was worrying news for local government with the chancellor’s focus on ensuring growth in public spending is lower than growth in the economy.
So-called ‘unprotected’ Whitehall departments face further budget tightening despite a pledge in the statement to increase public sector productivity.
Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities (SIGOMA) said: ‘With a 1% rise in spending on public services set for the coming years, unprotected departments like local government will face another round of damaging austerity, following the decade of cuts since 2010.’
This bad news has been compounded with the announcement of a hike in the National Living Wage (NLA).
While the increase will provide a much-needed boost to public sector personnel at the lower end of wage spines – such as social care staff – the move will increase many councils’ pay bills considerably during continued sector austerity.
The Autumn Statement also revealed councils will be able to recover the full costs of business planning applications in return for being required to meet faster timelines, an ambition to ensure all Local Government Pension Scheme (LGPS) funds are invested in asset pools of £200bn, and a promise that extended business rates relief will be fully funded for councils.
But the overall reaction within local government was less than positive.
Jonathan Carr-West, chief executive of Local Government Information Unit (LGIU) said: ‘The chancellor’s Autumn Statement will have done little to boost that confidence. Indeed, local authorities will be left wondering what it will take to have their concerns recognised and addressed by the government.
‘Instead of grasping the nettle on the bold changes needed to bring stability and consistency to the sector, we have today seen yet more tinkering around the edges…’
See all of The MJ’s coverage of the Chancellor’s Autumn statement here:
Autumn Statement: Unprotected departments face further cuts
Councils to be able to recover planning costs
Living Wage hike places council budgets under pressure
Business rates measures to be fully funded
Autumn Statement: Hunt announces surprise LGPS plan
For the full Autumn Statement documents, see here
