In a Budget billed as the end of austerity, chancellor Phillip Hammond praised local government’s contribution to rescuing public finances and doled out cash for adult social care, mental health, high streets and roads.
Mr Hammond said: ‘Local government has made a significant contribution to repairing the public finances.’
The Budget document said: ‘Local government has a vital role to play in delivering high quality public services for local communities.
‘The Government is already taking steps to empower local councils, giving them greater choice in how best to serve their local area… the Budget provides additional funding to help support local authority financial sustainability.’
The Chancellor’s budget unveiled a raft of new measures impacting on local government, including £650m for adult social care, with an additional £45m for disability allowance and £84m for children’s services over the next five years.
Extra funding promised for the National Health Service was confirmed, along with more funding for mental health services.
The Chancellor has turned his attentions to struggling high streets, pledging a £1.5bn package of support, including small business rate relief totalling £900m and £675m to improve transport and reinvigorate empty shops.
Fears that the rate relief would come out of local government’s share of business rates, cancelling out the benefits of extra funding for adult social care, have been dismissed by Local Government Association chairman Lord Porter.
Speaking immediately after the Budget, Lord Porter told The MJ: ‘If it does [come out of local government’s cut of business rates] it’s a major departure from what we’ve agreed in the past.’
He describe the Budget as ‘a statement of confidence in the ability of local government’. ‘It’s the best Budget we have landed since I have been here.’
Following controversy over the disastrous introduction of universal credit, the Treasury has ploughed an extra £1.7bn into the scheme to ease the transition.
A £28.8bn National road fund will support roads infrastructure and local authorities will also receive a further £420m for potholes and other road maintenance issues, and £150m to tackle ‘traffic hotspots’.
In his final Budget before Brexit, the Chancellor said he would not shy away from making the Spring Statement a ‘full fiscal event’ should the implications of leaving the European Union change the financial picture of the UK.
Responding to the Budget, LGIU chief executive Jonathan Carr-West said: ‘Has the Chancellor saved local government? Or are councils being given hush money to quit complaining while we continue to mask the serious structural problems that have led to hundreds more newborn babies being put into care while elderly people are refused it.
‘Instead of giving councils ring-fenced pocket money, the government needs to engage with the systemic funding problems in local government, find a locally responsive way of integrating health and social care and initiate a genuine conversation about how we fund local services.
‘Local government finances are in such a desperate state that any additional money will help, of course, but attempting to plug the holes in the dam with specified pots of money from Whitehall is a cause of the problems local government faces not a cure for them.’
Localis chief executive, Jonathan Werran, said: ‘Today’s Budget acknowledged the contribution local government has made to historic deficit-reduction.’
He welcomed the measures to fix roads, tackle the woes of the high street and hand a ‘solid £650m slug of cash for social care’, but he added: ‘If ending austerity also means ensuring real wage growth, then looking beyond the Northern Powerhouse and Midlands Engine, a moribund devolution agenda has to be reinvigorated so all regions of England can benefit from attempts to boost productivity levels through improving skills and infrastructure provision.’
- Other measures in the budget include:
- An end to new Private Finance Initiative contracts
- A 2% digital services tax on large digital firms
- 100% rate relief on public lavatories
- Changes to the apprenticeship levy to support employers
- Extending IR35 to the private sector
- National living wage will increase to £8.21 from April 2019
- Personal allowance will increate by £650 in April 2019
- Higher rate tax will increase from 46,350 to £50,000 in April 2019
- Increased funding to help government departments plan for Brexit
- A pledge to clamp down on single use plastics
With extra wriggle room from better-than-expected tax and spending figures, the chancellor was able to spread some largesse to cash-strapped councils in his Budget, especially in social care, highways and the high street. Michael Burton reports (£).