Autumn Budget: first thoughts from IED Executive Director
Please note this represents the personal perspective of the IED Executive Director
The immediate response to a budget speech lasting 75 minutes is that Phil Hammond has shifted the dialogue about budgetary deficit from actual amounts to percentages of GDP and in doing so has allowed any need to completely balance the budget to be kicked into the long grass. The principle reason for doing so appears to have been for him to afford to leave income tax thresholds unchanged and fund increases in the NHS budget which had previously been trailed.
From an economic development perspective, announcements concerning increases to Housing Infrastructure Fund (HIF), the Transforming Cities Fund and the Industrial Strategy were interesting – as was some commentary on further City Growth Deals and Devolution. In general, however, whilst they were mentioned in the speech, when the timetable and geography that they cover is considered, these could not be considered major shifts in policy – but some interesting tinkering with some clear winners and losers.
Meanwhile, the interesting shifts on reversion of retail / commercial space to residential property in town centres and the tax on on-line platforms – as well as the potentially important shift in National Insurance and taxation for sub-contractors – were all announced subject to consultation. In addition, business rate relief and co-funding of transforming retail centres all sounded like a further raid on Local Authorities (albeit with some ring-fenced money for social care to avoid the worst impact of reduced Local Authority funding).
So, when we read the Red Book which contains the detail of what the Treasury are actually intending, there is a risk that we see further reductions in Local Authority funds and, rather than devolution, an increasing stranglehold by Treasury on the items on which Local Authorities can actually spend their money. Meanwhile, proper Central Government funding for essential activities can be reduced – whilst the winners of much publicised competitions for budgets that have been reduced in total – will obfuscate the actual picture.
I will read the Red Book in detail – but I fear that this was further local cuts by stealth beneath a veneer that claimed austerity was almost over. Let’s hope that the detail promises the regions of the UK rather more.
Nigel Wilcock, IED Executive Director