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What to expect from the July Budget

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The first county devolution deal and discussions about transferring even more powers to northern combined authorities are expected to be included in chancellor George Osborne’s Budget tomorrow.

LGC reported on Friday that Cornwall was on the cusp of agreeing a deal that would include taking greater control over health and social care spending. The authority wants to have pooled health and social care budgets in full by 2020 and also wants to explore options to include welfare spending, creating a single pot worth about £2bn. The plans do not include provision for a directly elected mayor, LGC understands.

Alexandra Jones, chief executive of Centre for Cities, told LGC: “I expect the chancellor to make more announcements on devolution and to be naming specific places that will be getting more powers over the months and years ahead. I would expect bigger northern powerhouse cities to be identified.”

Since the general election, northern leaders have indicated a willingness to reconsider changes to governance structures if they can win more powers and controls.

The Sheffield City Region and West Yorkshire combined authorities agreed devolution deals in December and March respectively, although those deals were not as comprehensive as that of Greater Manchester. They had not adopted the directly elected mayor model.

In May John Mothersole, chief executive of Sheffield City Council, which is a member of the Sheffield City Region Combined Authority, told LGC “we aren’t going to hang around” asking government for more powers and added members were “open-minded” to adopting an elected mayor.

At the same time West Yorkshire’s chair Peter Box (Lab), leader of Wakefield MDC, said he wanted to find out “what extra powers and resources could be made available to us in return for a change of governance”.

The North East Combined Authority’s chair Simon Henig (Lab), who is also leader of Durham CC, said he had already had a “positive” meeting with communities secretary Greg Clark and added an “ambitious” devolution deal was being developed. Proposals include elements of fiscal devolution, creating a regional body to oversee transport, and reforming public services. Combined authority members will “consider appropriate models of governance” though, the statement said.

Meanwhile, Mr Osborne is expected to announce proposals to give elected mayors and councils powers to set Sunday trading hours.

On welfare, it is anticipated Mr Osborne will reduce the benefit cap from £26,000 to £23,000, although there have been reports it could be reduced to £20,000 outside London, as part of a Conservative manifesto commitment to find £12bn savings. LGC previously reported that cutting the benefit cap was likely to pile pressure on councils’ budgets for discretionary housing payments.

Plans to make local authority and housing association tenants earning more than £40,000 a year in London or £30,000 outside the capital pay market rental rates are also anticipated. Councils and housing associations can already charge market rents to households earning more than £60,000 a year.

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