Heather Jameson 22 November 2017

Budget 2017: Devolution and housing key planks in speech

Philip Hammond’s first Autumn Budget has seen the chancellor unveil a raft of new devolution deals, measures to boost housing and changes to resolve issues with controversial Universal Credit.

Mr Hammond gave a further push to devolution with a promise to get  ‘all parts of the UK firing on all cylinders’.

He confirmed a £1.7bn Transforming Cities Fund, with half the cash going to the metro mayors and the rest open to competition and announced further measures for more devolution to the West Midlands, alongside a deal for North of the Tyne.

With the Industrial Strategy expected on Monday, Mr Hammond added: ‘We’re developing a local industrial strategy with Manchester.’

He announced at least £44bn to address the housing crisis, pledging to deliver 300,000 new homes a year, alongside an urgent review of land banking practices.

The long-awaited rebranding of the Homes and Communities Agency to Homes England was also announced.

But the key housing announcement for local government lies in a promise to lift the Housing Revenue Account cap in areas of high housing demand.

He announced a further £28m to help Kensington and Chelsea LBC in the aftermath of the Grenfell tragedy and urged councils struggling to pay for fire safety work to come to him, although he stopped short of pledging to pay for the work.

On Universal Credit, the chancellor announced a £1.5bn package of measures to ease the pressure and said claimants would no longer have to wait seven days before they were entitled to payments.

While there was no extra cash for adult social care, there was £10bn for capital investment to make Sustainability and Transformation Plans more resilient and a further £2.8bn for the NHS.

Mr Hammond stopped short of a public sector pay increase, adding negotiations on NHS pay were ongoing, but he will fund any increases in the outcome.

On business rates, Mr Hammond said he would change the method of calculating business rates from RPI to CPI two years earlier than expected. 

Whitehall will publish a position paper on the tax challenge posed by the digital economy, setting out its emerging thinking about potential solutions.

The Office for Budget Responsibility (OBR) downgraded expectations over productivity.

Mr Hammond said: ‘The OBR now expects to see GDP grow 1.5% in 2017, 1.4% in 2018, 1.3% in both 2019 and 2020, before picking back up to 1.5%, and finally 1.6% in 2022, with inflation peaking at 3% in this quarter, before falling back towards target over the next year.’

However, the chancellor is back on track to meet his fiscal rules.

Borrowing is forecast to be £49.9bn this year, £8.4bn lower than forecast at the Spring Budget.

The Budget also included the following:

  • £700m has already been spent on leaving the EU, with a further £3bn put aside in the next two years;
  • further investment in transport infrastructure and research and development;
  • investment to encourage maths and science in schools;
  • increase in the national living wage from April to £7.83;
  • a review of the tax system in the digital age; and
  • £28m to tackle pilots for rough sleeping in Manchester, West Midlands and Liverpool.
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