Heather Jameson 23 November 2016

Autumn Statement Overview: No 'respite' to local authority finances

Chancellor Philip Hammond has unveiled an Autumn Statement which has given no real respite to local authority finances.

Expected measures to ease the pressure of adult social care failed to materialise in a speech which pledged to help people who are ‘just about managing’.

Scrapping future Autumn Statements, in favour of an autumn budget with a Spring Statement to respond to the Office of Budget Responsibly figures, the Chancellor revealed details of plans for housing, infrastructure and regional economic growth.

Speaking after the announcement, Solace president Jo Miller suggested many measures in the budget were welcome ‘but the elephant in the room is social care’.

She said it was ‘disappointing’ and added: ‘We can only hope that, in the public spending review the Chancellor announced, the Government is developing a serious plan to ensure the future sustainability of our health and care systems.’

Mr Hammond told the House: ‘Devolution remains at the heart of this government’s approach to supporting local growth.’

There was a pledge of more borrowing powers for the mayors of combined authorities and revealed plans to extend devolution to the London Mayor, including money for housing, adult education budget and employment help.

He also vowed to reveal more devolution for the Midlands Engine at a later date, and extend existing city deals, including a new deal for Stirling.

Mr Hammond did offer other measures for local government. Stating there would be a housing white paper ‘in due course’ but he said the government would ‘more than double’ annual capital spending in housing ‘to deliver a housing market that works for everyone’.

There would be a £2.3bn housing infrastructure fund, and a further £1.4bn for an extra 40,000 affordable homes.

Giving more cash to Local Enterprise Partnerships in a bid to tackle the productivity and growth, he also committed to cash for transport, infrastructure and broadband, including 100% business rate relief for five years for fibre infrastructure.

‘My ambition is for the UK to be a world leader in 5G,’ he said.

The Treasury has raised the National Living Wage from £7.20 to £7.50 – in a move which is set to put further pressures on local authority wage bills.

Public spending is set to by 40% of GDP this year, down from 45% in 2010, but debt will rise from 84.2% last year to 87.3% this year before peaking at 90.2% in 2017-18.

He outlined three new fiscal rules:

- Borrowing should be below 2% by the end of this parliament

- Public sector net debt as a share of GDP must be falling by the end of this parliament

- Welfare spending must be within a cap, set by the government and monitored by OBR

For the devolved nations, he offered £250m in Barnett formula for Northern Ireland, £400m for the Welsh Government and £800m for the Scottish Government.

Mr Hammond said: ‘This Autumn Statement responds to the challenge of building on that strength, while also heeding the warnings in the OBR’s figures, as we begin writing this new chapter in our country’s history.

‘It re-states our commitment to living within our means. And it sets out our choice to invest in our future. It sends a clear message to the world that Britain is open for business, and it provides help to those who need it now.’

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