Budget 2018 round up for public services
“The era of austerity is finally coming to an end”, said Philip Hammond.
Theresa May’s announcement in September that austerity was ending may have been premature but in yesterday's budget the Chancellor reiterated that austerity was no longer a government imperative. In fact government was: ‘setting out a new path for public spending ahead of the Spending Review in 2019’.
Providers of public services may be breathing a sigh of relief at signs of new investment but relief from existing budget restraints may not be forthcoming. There was no detail on what would happen to planned cuts.
Ahead of confirming allocations at the Spending Review in Spring next year, what was promised on 29 October however, was increased funding in current budgets for adult and children’s social care, schools, defence and police.
The Prime Minister has already committed to an extra £20.5 billion each year for three years to the NHS (in England).
The Autumn Statement announced much-needed social care windfalls for councils:
- £240 million in 2018/19 and £240 million in 2019/20 for adult social care, plus £410 million in 2019/20 for adult and children’s social care.
- £55 million in 2018/19 for the disabled facilities grant.
- £84 million over five years for children’s social care programmes for 20 further councils with high or rising numbers of children in care.
More detail on long-term funding may be in the postponed green paper on social care, due out soon.
Schools, defence and police
The Chancellor committed £400 million to schools for: 'little extras' plus £1 billion to defence and an extra £160 million for counterterrorism.
To coincide with the Budget, important strategic partnerships between Homes England and nine registered providers to deliver units under the Affordable Homes Programme (AHP), were announced. These are: Platform Housing Group, Optivo, Southern Housing Group, Orbit, Thirteen, Vivid and a partnership of Guinness Partnership and Stonewater. These collectively received £653 million in funding from the AHP. The aim is to deliver 13,475 affordable homes by March 2022 in areas with: ‘high affordability pressures’.
The Budget also contains the largest ever roads investment package, along with an additional £770 million to improve transport infrastructure in cities. Local authorities will be pleased to see £420 million committed to pothole repairs. This funding for potholes is on top of an existing sum of almost £300 million.
Chancellor Hammond announced new PF1 and PF2 contracts, where private companies provide public services and public infrastructures, will be abolished. The collapse of Carillion influenced this government decision.
He also revealed a new centre of excellence would manage ongoing government PFI contracts: “we will establish a centre of excellence to actively manage these contracts in the taxpayers' interest, starting in the health sector.”
It is as yet unclear how the discount on business rates for small business owners (amounting to a £900 million cut) will affect councils, or in fact whether business rate income will be retained wholly by local government or split with central government from 2019/20.
One positive for councils is that owners will no longer pay business rates on public toilets.