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Rob Whiteman: Autumn statement lived up to our low expectations

Rob Whiteman
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This was never going to be an easy autumn statement for the new chancellor, Philip Hammond.

Even before trying to respond to the financial impact of Brexit, the chancellor inherited a public sector already thoroughly squeezed by spending cuts and a set of fiscal targets for 2020 that had already been abandoned.

But despite the obvious strains, it was a statement that needed to convey confidence in a Britain independent of the EU, and to show a government in control and with a firm grasp on how new infrastructure and innovation would bolster productivity and trade.

He delivered it all with aplomb, I thought, but it reminded me of the line in Gilbert and Sullivan’s When Britain Really Ruled the Waves: “the House….did nothing in particular, but did it very well”.

Mr Hammond did formally abandon the target we all know was abandoned anyway, which means consolidation of present departmental spending limits rather than new savings; and the focus on infrastructure and housing is welcome.

There were a few other welcome announcements, most of which were recommitments to devolution deals. Combined mayoral authorities will have new borrowing powers to reflect their new responsibilities, although it is unclear what these new powers will be. There will also be devolution of new funding streams to London, which will include an adult education budget and greater control over employment support services. London will also receive £3.15bn, which is its share of the national affordable housing funding.

But all in all, I thought it was a disappointing outcome for local government.

First, sadly, I don’t for a moment believe that the hint to review for the next parliament the current costly protection of certain budgets and commitments such as the pension triple lock will actually change anything. The next general election will probably see the usual promises to keep the status quo.But more materially, there was nothing, nothing at all, about the dangerously low levels of social care funding now seen across in councils. Perhaps something on the precept and better care fund is being saved for the local authority settlement, but let’s not hold our breath. This is further exacerbated by the increase from £7.20 an hour to £7.50 an hour in the national living wage, which while welcome for low paid staff will put further pressure on some services, not least adult social services.

The announcement of further business rates relief, through the rural rates relief increase to 100%, will be welcome news to small businesses. Although the government has indicated this will not impact on councils’ spending powers when matching budgets are devolved under rate retention, the sector should be concerned that such moves reduce the total income raised through business rates. Since the government decided to let councils keep business rates, it really is now making a habit of reducing the tax base at every opportunity! Principle here is important because elsewhere the government sees the importance of growing the tax bases and yields to its own sources of finance.

Mr Hammond told us that he intends to do very little in the new spring statements. The last autumn statement certainly lived up to these low expectations for local government.

Rob Whiteman, chief executive, Chartered Institute of Public Finance & Accountancy

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