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Adam Lent: The Budget leaves councils at Boris Johnson's mercy

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The chancellor was clearly feeling the hand of history on his shoulder. A new chapter and a turning point were declared as Phillip Hammond informed the house that austerity was now ending just like the prime minister said it would.

From the point of view of local councils, that historical hand was giving the chancellor a very light shoulder massage rather than a firm and resolute squeeze. There was a lot of one-off cash boosts for adult social care, children’s services, roads, and housing infrastructure. Even fly-tipping got a slug of money. But anything akin to the NHS’s £20.5bn increase in annual budget was absent.

No-one expected that the Budget would come up with the long-term, sustainable financial settlement for local government that the National Audit Office recently said was vital if local public services are to avoid irrevocable deterioration. But a hint or two that such a thing might be on the cards would have been nice. To be fair, there was a promise of a green paper on social care funding. But given that was first promised in March 2017, no-one working in local government is holding their breath.

The real action, if there is to be any, will come with next year’s spending review. At the moment, however, that is looking like quite a mild affair. As the chart from the Budget red book below shows, the spending review will by 2023 only take us halfway back to where spending was when George Osborne first swung the axe.

Does that leave enough room for Mr Hammond and his successors to find the necessary cash to plug the widening holes in local service delivery, as well as plough an extra £20.5bn into the NHS? I wouldn’t want to bet on it.

The red book is careful to point out that this is only an initial stab at the new spending envelope. It will be the spending review itself that sets the final figure. The chancellor was clear in his speech that if the prime minister secures a good deal on Brexit and gets it through Parliament, then he fully expects a sudden boost to growth, which would generate lots of tax receipts and thus much more generous planning around the review.

So, councils and the people they serve are now reliant on the vagaries of the negotiations happening in stuffy rooms in Brussels and, somewhat more worryingly, the tactical manoeuvrings of Jacob Rees-Mogg and Boris Johnson. A new chapter, indeed.

Adam Lent, director, New Local Government Network

 

 

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