An extra £30 billion of spending was announced in the Budget in March, much of it aimed at dealing with the coronavirus outbreak.
Building homes, boosting connectivity and filling potholes were among the local priorities to benefit from announcements in Rishi Sunak’s first Budget as Chancellor.
While Mr Sunak’s statement was dominated by measures aimed at combatting the coronavirus outbreak, there were some encouraging signs of a shift towards more local spending, with significant and welcome investment in infrastructure and public services.
The Chancellor announced more than £600 billion for road, rail, housing and broadband projects over five years; an additional £360 million for the Welsh Government; £240 million for new city and growth deals; and £200 million for local communities in England to build flood resilience, with a promise to double investment in flood defences.
There were also announcements on business rates, devolution, the spending review, adult social care, air quality and reducing plastic pollution.
However, according to the LGA’s pre-Budget analysis, councils in England face an overall funding gap of almost £6.5 billion by 2025, just to meet demand and inflation pressures, before any consideration of service improvements or investment needed in preventative services.
We are therefore looking forward to working with the Government on its (delayed) Comprehensive Spending Review, to ensure it provides a sustainable, long-term funding settlement for councils. This will allow councils to protect and improve local services, grow our economy and make a positive difference to the lives of our communities.
Business rates account for around a quarter of all council spending power, and money raised is used to pay for vital local services. Councils agree the system needs to be modernised and improved, and we will engage with the Government’s (delayed) business rates review.
This is an opportunity to ensure online businesses make a fair contribution, tackle business rates avoidance, reduce the risk of appeals on councils and provide local government with a sustainable income stream. Urgent clarity is needed on how this review will impact on reforms that will allow local government to keep more business rates income from April 2021.
It was pleasing to see further progress on devolution, with the announcement of a £1.8 billion deal for a West Yorkshire mayoral combined authority and the promise of a White Paper.
There is clear and significant evidence that lives are improved and the country gets better value for money when councils have the freedoms and funding to make local decisions. All councils should have the opportunity to progress with devolution. Developing new deals will require different approaches for different areas, including how they are governed.
Flooding
- Spending on England’s flood and coastal defences will double to £5.2 billion over the next six years.
- £120 million to repair assets damaged by this winter’s storms.
- £200 million over the next six years for a place-based resilience programme for areas where flooding and coastal erosion is inevitable.
LGA view: “We will be working with government to ensure councils are able to access funding for their local communities.”
Planning
- Proposed reforms to be set out shortly, followed by a Planning White Paper in the spring.
- Greater government intervention where planning authorities fail to meet their local housing need.
LGA view: “The planning system is not a barrier to house building, with nine out of 10 applications being approved. Councils need powers to tackle the housing backlog and step in where a site with planning permission lies dormant and house building has stalled.”
Waste and recycling
- A new plastic packaging tax from April 2022.
- An additional £700,000 to establish the Extended Producer Responsibility (EPR) scheme.
- £2 million to improve evidence on where fly-tipping happens and the best ways to deter it.
LGA view: “The LGA will be pressing to ensure that the EPR scheme provides additional funding for councils to cover the cost of dealing with packaging waste, including littered and fly-tipped packaging items.”
Social housing
- Interest rates for investment in social housing cut by 1 per cent.
- An extra £1.15 billion of discounted loans available for local infrastructure projects.
LGA view: “We called for the implementation of a discounted local infrastructure rate for crucial projects including housing, which would otherwise be under threat.”
Building safety
- An additional £1 billion to remove unsafe cladding from residential buildings above 18 metres tall.
LGA view: “This announcement is welcome. We have been calling for government action to fund councils and housing associations to remove non-aluminium composite material (ACM) dangerous cladding for more than two years.”
Fire safety
- £20 million for fire and rescue services to increase inspection and enforcement capability and build a strategic response to the Grenfell Tower Inquiry’s findings.
LGA view: “The UK has a shortage of fire engineering expertise. This is a welcome start, but needs to be matched with investment in local authority building control.”
Adult social care
- Commitment to long-term reform of adult social care, with ministers writing to parliamentarians to begin building cross-party consensus.
- £1 billion extra in social care over the next 10 years, as per the 2019 Spending Round.
LGA view: “It is disappointing that the Budget includes no additional new funding for adult social care. Even with this £1 billion investment, we estimate that adult social care faces a funding gap of £810 million in 2020/21, rising to £3.9 billion in 2024/25.”
Business rates
- The Government is to carry out a business rates review, after the COVID-19 emergency is over.
- An extra £11.5 million to address the appeals backlogs and manage more frequent evaluations.
LGA view: “Councils want to see a business rates system that is buoyant, responsive to local needs and fair to all. The review should consider the full suite of funding options available to finance local services, such as a tourism levy and an e-commerce levy.”
Housing
- An extra £9.5 billion for the Affordable Homes Programme and £400 million for local areas to establish housing on brownfield land.
- Confirmation of £1.1 billion from the Housing Infrastructure Fund for nine different areas.
LGA view: “With more than one million households on council waiting lists, it is vital that the Affordable Homes Programme is re-focused towards support for truly affordable homes, including those for social rent… All councils should have access to funding to support housing delivery on brownfield land.”
Homelessness
- Confirmation of £237 million for accommodation for up to 6,000 rough sleepers.
- A further £144 million for associated support services and £262 million for substance misuse treatment services.
LGA view: “This will help councils’ efforts to get people off the streets and into safe accommodation. It’s essential that the additional funding for substance misuse services is firmly aligned with public health funding provided through the public health grant to local authorities.”