Tiffany Cloynes Joanna Phillips 06 November 2018

What does the Budget really mean for local authorities?

What does the Budget really mean for local authorities? image

A theme of the 2018 Autumn Budget is that of long-awaited increases in public services spending with the Treasury promising that 'spending on public services will grow 1.2% above inflation a year from next year until 2023-24'. Announcements on social care, the living wage, and infrastructure may the Government states provide welcome relief both for individuals and local authorities respectively.

Social care

Local authorities have been promised an additional £650m for social care in the next year of which £240m is specifically earmarked for adult social care. The budget also promises to 'empower local councils' to allocate social care spending depending on the particular needs of the local area, with the remaining £410m free to spend as needed (as long as additional adult social care services do not increase any strain on NHS services).

The focus for these extra provisions is seemingly for the 'public services people care about the most' such as older people, people with care or disability needs, children and young people however there is a lack of guidance as to how councils should best use this funding. Given challenges regarding dealing with ringfenced funding, further guidance is crucial. A £650m injection of cash into social care may not be enough to solve crises in the sector but it is a step.

National Living Wage

It was announced that the National Living Wage is to increase from £7.83 an hour to £8.21 effective April 2019 which the Government predicts will result in a '£690 annual pay rise for a full-time worker' and will benefit roughly 2.4 million workers. This increase will boost such workers’ income to above the current rate of inflation but falls short of the voluntary Living Wage Foundation’s figure of £8.75 (which they state is the minimum amount workers need to earn to live and support their families).

Infrastructure

A National Infrastructure Strategy has been promised for 2019 as well as a review of its existing support for infrastructure finance. Announcements in the budget of funding for infrastructure are supported by changes which seek to tackle existing issues surrounding development and regeneration.

The budget announced £675m of funds for local regeneration and development schemes called the Future High Streets Fund to help councils 'make their high streets and town centres fit for the future', including a dedicated High Streets Task Force which will guide local authorities towards successfully utilising additional funding.

Responding to the challenges and changes that the high street has faced, the budget seeks to enable local authorities to boost town centres with 'mixed-use business models' in line with a preference for the inclusion of cultural and leisure facilities around retail centres by introducing new Permitted Development Rights which will make ‘change of use’ processes easier.

The budget also aims to tackle the existing issue of unused empty commercial spaces by trialling a register of the same which can then be used to 'connect community groups' to those spaces as well as promising a consultation on converting commercial spaces into housing.

Further to the injection of additional funds, the budget promises reforms to make systems relating to infrastructure and affordable housing developments simpler, promising 'more certainty for developers and local authorities'.

This includes:

  • simplifying the process for setting a higher zonal Community Infrastructure Levy in areas of high land value uplift;
  • removing all restrictions on Section 106 pooling towards a single piece of infrastructure; and
  • a Strategic Infrastructure Tariff for Combined Authorities and joint planning committees with strategic planning powers

Housing and transport have also both received a boost. An extra £770m has been allocated to improve transport in cities further to the £420m for road maintenance promised. Multiple announcements regarding housing infrastructure include £500m added to the Housing Infrastructure Fund, £635m for partnerships with nine housing associations, and the lifting of the Housing Revenue Account cap which should enable local authorities to build as many as 10,000 new homes per year.

Tiffany Cloynes partner and Joanna Phillips of Geldards Law Firm

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