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Adam Lent: What local government should expect from the Budget

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The big Budget announcements for local government may have already been made. 

The prime minister told us about the removal of the housing revenue account borrowing cap in her party conference speech. And the Sunday papers were reporting a £1bn one-off cash boost for social care and £570m to fix local roads. There’s also the news that there will be £900m of business rates relief for small businesses and that £2bn of the £20.5bn ‘birthday present’ for the NHS will be earmarked for mental health services.

What the precise implications of these announcements are for local government will reside in the detail – much of which may not appear in the chancellor’s statement but in the voluminous documents that are issued alongside his speech.

For example, will there be more detail about any conditionality or timing around the HRA cap removal? It’s common knowledge in Westminster that the Treasury was unhappy with the prime minister’s big announcement, so this could be their chance to push back.

The same question applies to the social care and roads money: who is it going to and based on what criteria?

The business rates cut is particularly interesting. While many councils will welcome anything that takes some pressure off their struggling high streets, there is the obvious question about what this means for the large portion of local government funding that comes from business rates. Will the chancellor make good any shortfall?

The mental health money seems to be directed not solely at acute NHS services but also early intervention and employment. It would make sense for councils, particularly children’s services and public health, to be part of that mix so maybe that is the first sign that the NHS ‘birthday present’ will be spread around more widely (and wisely) to ensure the shift to greater prevention.

Chancellors notoriously keep at least one or two surprises back to cheer their backbenchers and wrongfoot the opposition. Given we are told that austerity will soon be a fading memory, could there be something else for the public sector and even councils?

Maybe but really the big deal is next year’s spending review which, assuming Brexit doesn’t tip the economy over a cliff, should be the moment that the light at the end of the austerity tunnel becomes clearly visible.

The chancellor will announce today what the overall ‘spending envelope’ will be for the review: rumours are it will be quite a roomy manilla. It will be at that point that the real battle starts to ensure that the much hoped-for, long-term financial settlement for local public services will begin.

By Adam Lent, director, New Local Government Network 


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