Oxfordshire Director of Legal

Slide background
Slide background

Budget 2020: reaction from the sector

Local Government Lawyer rounds up the reaction to Rishi Sunak’s first Budget as Chancellor of the Exchequer.

Cllr James Jamieson, Chairman of the Local Government Association

“Long-term investment in public services is desperately-needed so it is encouraging that today’s Budget signals a shift towards more spending on local priorities, such as building homes, boosting connectivity and filling potholes.

“Councils are best placed to ensure that infrastructure investment meets the needs of communities. With local control over how it is spent, councils can play a key role in providing genuinely affordable homes, fixing the nation’s roads, delivering high-speed broadband and high-quality mobile connectivity, boosting local economies, and tackling environmental challenges.

“There is clear and significant evidence that lives are improved, and the country gets better value for money when councils have the freedoms, funding, and maximum flexibility to make local decisions, so we are pleased to see further progress on new and improved devolution deals announced today.

“This should trigger renewed momentum around the devolution process to all parts of the country so councils can do more to help the Government grow local economies and improve the lives of their communities. This will require different approaches for different areas, including how they are governed.

“Councils in England faces an overall funding gap of almost £6.5 billion by 2025, just to meet inflationary and demographic pressures. We are pleased the Chancellor has signalled the start of the Spending Review process and we look forward to working with government to ensure it provides a sustainable, long-term funding settlement for councils.”

Cllr Ian Hudspeth, Chairman of the Local Government Association’s Community Wellbeing Board

On the measures announced in Budget 2020 to help communities, businesses and the economy cope with the coronavirus crisis: “The announcement of hardship funding and business rates support is good news and will be a huge relief to people and businesses who may struggle financially as a result of the coronavirus. Councils will need maximum flexibility over hardship funding to ensure it can be distributed as quickly as possible and where there is most need.

“Council staff are doing an amazing job in hugely difficult and fast-moving circumstances to help cope with coronavirus and will continue to do all they can to support residents and businesses.

“Keeping older people and those with underlying health conditions safe from the virus will be absolutely crucial.

“Councils have plans in place for every possible scenario, which include looking at how they could best use their staff and mobilise resources to continue supporting the most vulnerable. However, a widespread coronavirus epidemic across the country would inevitably have a huge impact on an already-stretched adult social care system. We are therefore pleased the Government has pledged a £5 billion fund for NHS and public services coping with the coronavirus and look forward to seeing the full details.

“It is clear that local government needs the same commitment the NHS has received from the Chancellor today, that it will get any immediate financial support it needs to help adult social care services keep vulnerable residents safe and reduce pressure on the NHS.

“It is disappointing that the Budget was not used to announce councils’ public health grant for the next financial year, which is only just over two weeks away. The public health grant must be published by the Government with the utmost urgency to ensure councils can not only cope with the coronavirus crisis but to continue providing other vital public health services for the long term.

“The LGA continues to liaise with Public Health England and the relevant government departments regarding the outbreak. We are raising councils’ concerns on a range of issues including the impact on adult social care, emergency funding, support for residents and staff, workforce capacity, the use of volunteers and arrangements for the local elections.”

Jonathan Carr-West, Chief Executive of LGiU

“This budget was dominated by the Government’s response to coronavirus. No one could argue with that, but for local government it provides more questions than answers.

“Social care has been all but absent in the response to Covid-19. Hospitals will not be able to cope if large numbers of older sufferers cannot be discharged because of a lack of social care provision and social care providers will not be able to cope if a fifth of their already stretched workforce is off sick. This could create a dangerous and vicious circle.

“The £500 million hardship fund the Chancellor announced for local government will help with this, but will it be enough? Mr Sunak promised “whatever it takes” for the NHS, but once again, we risk forgetting the symbiotic relationship between health and social care.

“Councils will be at the front line of our response to coronavirus and will be a crucial player in long term economic transformation. However, local government may feel that it has dropped through the middle somewhat as the Government attempts to get so many other things done.”

Tonia Secker, Partner and head of affordable housing at Trowers & Hamlins

“Housing has done pretty well overall out of today's budget – perhaps a surprise after its virtual exclusion from the majority of pre-budget speculation.

“Today's budget announcement surrounding housing investment are to be welcomed – both in terms of additional funding, programme duration and focus. Whilst the shift of focus of the Affordable Homes Programmes back towards home ownership is not unexpected, the level of increases – an additional £9.5 billion suggests that rented products will not be entirely overlooked. We await details of the new programme and the Government's thinking on how such funds will be worked to generate the anticipated private sector investment. 

“Key however to the success of those programmes will be the announcement of the Government's plans on the Future Homes Standard – enhanced standards come at a cost.

“At the other end of the housing spectrum, the announcement of £643 million to alleviate rough sleeping is welcome.

“The anticipated announcement on the Single Housing Infrastructure Fund, trailed in the Conservative's manifesto did not materialise but is promised at the next CSR. This combined with the confirmation of allocations from the Housing Infrastructure Fund of up to £1.1bn and the reduction in the PWLB borrowing rate for social housing and infrastructure suggests that Government is looking at housing delivery from the widest standpoint – beyond the bricks and mortar itself. That can only be welcome.

“For housing providers – whether private or public sector – the announcement of an increase of £1bn for unsafe cladding removal will come as positive news. How the money comes in – loan or grant – and how far it can go to meet the outturn bill remains to be seen.”

Cllr John Fuller, Chairman of the District Councils’ Network

On the announcement of a £500 million hardship fund in the Budget for councils to provide support to vulnerable people in their local areas:

“We are pleased the Chancellor has announced funding for councils to help working people suffering hardship as a result of the coronavirus. The District Councils’ Network had a significant say in the design of the fund and we are delighted to see this announced today.

“It is a time to focus on working quickly to solve problems, which is what district councils do best. We are perfectly placed in the local community to deliver the support where it is needed most, creatively helping hard working families in whatever way they need. 

“To make this investment really count it will be important for it to be channelled directly to district councils, and with full flexibilities and no ring fences so that we can rapidly respond to the range of issues this will throw up across our communities.

“There will be challenging weeks ahead for communities across the country. As ever, councils stand ready to deliver the vital services for families and businesses.”

Paul Dossett, head of local government, Grant Thornton UK

“Ahead of the Budget I, along with many in the sector, called on the Chancellor to provide longer term certainty on local government funding. But this did not happen. The sector will need to wait for the Autumn’s Spending Review for clarity but it was positive to hear that the Spending Review this year will be a three-year settlement.

“It was also positive to see the announcement of a new devolution deal, for West Yorkshire, with a Mayoral election to be held in May 2021, and London style additional funding settlements with the seven other metro mayors totaling £4.2bn.

“Despite the sector facing extreme funding pressures, local government did not feature highly in today’s announcement. Some additional ring-fenced funding was announced, including a £500m hardship fund to support the coronavirus impact on problem debt, a £2.5bn pothole fund, and £242m additional city growth deals. There will also be a cut to interest rates for local authorities on lending for social housing by one percent – which should encourage councils to build and boost social housing supply across the country.

“The Chancellor also announced £5bn of funding to manage the impact of the coronavirus pressures on the NHS, support local authorities to manage social care pressures and support vulnerable people, and help manage pressures on other public services. This fund will be reviewed “as the situation develops”, although the Chancellor did not mention how councils could specifically benefit from this additional funding.

“The ongoing demand-led pressures facing local government are not going to go away and, in many respects, the Budget has raised more questions than answers - how will the UK Shared Prosperity Fund be allocated? How will children’s social care cost and demand pressures be resolved?

“The business rates relief as part of the government’s response to the coronavirus will cost £1bn over the next 12 months, and it was encouraging to see that the government will fully compensate councils for these measures.

“It was perhaps a throwaway remark made by the Chancellor – that he will be consulting on the future of the Public Works Loans Board (PWLB) – but this could have a significant impact on some councils, in particular following the increase to the PWLB borrowing rate announced last year, as the government continues to seek further constraints on councils borrowing for commercial property investments.”

Jonathan Werran, chief executive of thinktank Localis

“This would be a most remarkable Budget even without the pressing need to address the immediate contingencies the coronavirus situation is raising.

“Today’s announcement succeeds in putting unprecedentedly increased levels of capital funding flesh to fully dress the rhetorical bones of the ‘levelling-up’ agenda.

“In this sense the chancellor has unveiled a “Bob the Builder” Budget – if the country needs it we will build it and get it done.

“From digital connectivity to mobility and transport upgrades, from housing growth and infrastructure development to pothole fixing to floods defences and further education, the money is clearly there to match the ambition articulated in last December’s election to rebalance the national economy and extend opportunity across all four corners of the land.

“What is at stake here is the devolution of powers that will necessarily follow the funding, how it is distributed and at what scale.  Will the new inclination of regional political economies encourage genuine local empowerment and self-determination to help shape communities and local economies in a way that accords with their sense of place and identity?

“For this we must await the final contents of the English Devolution White Paper and 2020’s other showstopping fiscal events – the July Spending Review and Autumn Budget.”