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Tony Travers: a spending freeze is what passes as good news

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The Budget promised local government little. The previously-made commitment to uncap the housing revenue account was confirmed, but otherwise councils were given few signs that, for them, austerity is about to end. 

Social care was allocated additional resources for 2018-19 and 2019-20, and there is £675m worth of extra support for high streets, though it is not clear if councils are expected to lead ‘local area’ bids.

Within the planning system, the government is proposing to add a number of new permitted development rights. This is a further incursion into the local planning system. Certain kinds of high street businesses will be allowed to change use to offices or residential as of right, as will some temporary uses.

Looking ahead into the period covered by the forthcoming spending review, the government has decided to spend additional resources predominantly on the NHS. The chancellor was given a windfall of extra cash because of changes to Office for Budget Responsibility tax and growth projections. Almost all of this money will go to health.

Institute for Fiscal Studies calculations suggest that ‘protected’ parts of revenue expenditure (including the NHS) will see real terms increases in expenditure of about 15% between 2018-19 and 2023-24, while for ‘unprotected’ services will effectively be frozen in real terms all the way from this year till 2023-24.

For councils, this is what passes for good news. If local authority spending were frozen in real terms for the period of the coming spending review it would, in effect, level-off council spending at a baseline set by the 30% real terms cut between 2010-11 to 2018-19.

Of course, the ‘fair funding’ review, if it is to have any effect at all, will shift resources from council to council. For the losers, there would be little more than ‘flat cash’ for the four years after 2019-20. Unless, of course, the government removed or moderated council tax capping so that councils which lost out because of the funding review could raise extra money from local taxpayers.

The NHS, social security, education and funding the national debt will together continue to take an increasing share of all public expenditure. This process is unsustainable.

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