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3:29 PM 30th October 2024
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Round Up Of Responses To The Budget

 
Dr Jonathan Carr-West, Chief Executive, LGIU, said:
“The Chancellor billed this as an historically consequential budget of hard choices. That’s certainly true in many areas with £40bn of tax rises announced and significant changes to the government’s debt rules.

For local government, however, it is a budget of choices deferred. It could have been worse – there’s an additional £1.3bn in funding including money for social care and additional funding for housing and special educational needs: the very areas that are driving many councils to bankruptcy.

But this extra funding is not even half the gap that councils currently face.

The longer-tem change that the sector desperately needs is all deferred for now. We are waiting on the Local Government Finance Settlement, on the Devolution White Paper and on a broader redistribution of funding through a multi-year settlement from 2026-27.

There were some welcome highlights: retaining 100% of right to buy receipts and integrated settlements for Greater Manchester and the West Midlands and possibly for other places in future.

Is this a start? Yes. Is it enough? Not by a long shot. At least not yet. There’s a positive direction of travel set out, but there’s a long way to go and the pressure on council finances means there’s a real risk that some councils will not be able to hang on long enough to get there."


CLA’s comments on inheritance tax reliefs and frozen Defra budget – ‘nothing short of a betrayal’

CLA President, Victoria Vyvyan said:

“Labour has made repeated assurances over the last 12 months that it would not tamper with inheritance tax reliefs, and its decision to now rip the rug from under farmers is nothing short of a betrayal.

“This puts dynamite beneath the livelihoods of British farming, and flies in the face of growth and investment. We estimate that capping agricultural property relief at £1m could harm 70,000 UK farms, damaging family businesses and destabilising food security. In its attempts to raise more revenue the government will cause great damage, jeopardising the future of rural businesses up and down the country.

“Many farmers, operating on slim margins, will now face having to sell land to pay inheritance taxes. At a time of profound change in the industry, adjusting to new agricultural policies, the government is offering no vision for a positive economic future for us in the rural community. We will continue to argue the case for these vital reliefs.”

Commenting on the Defra budget, Victoria Vyvyan, said:

“The government was elected on a promise of growth, but has done nothing for the countryside but freeze the agriculture budget and raise taxes.

“The decision to freeze the budget at the same level since 2014 – a cut in real terms – will have consequences for hard-pressed farmers, consumers and the environment. It will damage confidence and stability across the industry, risking farm profitability. It could hit sustainable food production and undermine improvements to wildlife habitats, flood management and access to nature.

“Defra’s proposal to accelerate the end of direct payments would be incredibly damaging to investment in farming and diversified businesses.

“A recent CLA survey found that 80% of respondents said they ‘strongly agreed’ or ‘agreed’ that payments through farming schemes are critical to ensure their businesses stay viable. There is enormous growth potential in the countryside, but we need the government to be working with us, not against us.”



Commenting on changes to how the Treasury measures debt and an additional £500m funding for the government’s affordable homes programme, Peter Ware, Head of Government at UK and Ireland law firm Browne Jacobson, said:
“Fiscal rule changes that unlock borrowing for infrastructure investment are long overdue, while social landlords will be energised by extra funding and five-year fixes to rent increases – but these only represent a small part of the jigsaw if we are to solve Britain’s economic growth puzzle.

“The bigger picture ultimately requires government to set the conditions that are conducive to private sector investment, which can effectively supplement any new public funding to improve the social apparatus that influences livelihoods.

“Investors tell us they have the funds ready to inject into projects with a positive social purpose as part of their broader mission, and are yearning for a return to the type of investment environment that was evident in the 1990s and 2000s.

“At the time, the private finance initiative (PFI) provided a gateway for public and private sector partners to join forces in delivering vital public infrastructure, such as schools, roads and hospitals.

“PFI was cancelled in 2018 after receiving criticism for issues including perceived poor value for the taxpayer and windfalls for investors that refinanced debt at lower rates following the riskier construction phase.

“In the absence of any replacement, we are now falling behind other major economies in delivering infrastructure, with the assets we do build being both the most expensive and delayed in the G7.

“Therefore, if the new government is serious about its mantra to ‘invest, invest, invest’, it must identify a new private finance model that learns from the mistakes of its predecessor to ensure the public purse receives better value and control while remaining attractive to the private sector.

“Alternative models are emerging and worthy of further exploration. In particular, the Future Governance Forum’s recent proposal for infrastructure investment partnerships takes lessons from the non-profit distributing model deployed in Scotland and mutual investment model in Wales to place a greater emphasis on community benefits in any project, cultivates a culture of long-term collaboration and gives local areas more control over their infrastructure.

“A joined-up strategy that can harness greater public and private investment will help the government in its stated mission to foster sustainable growth, enhance national connectivity, and drive innovation – the building blocks of a resilient, forward-looking economy.”

Commenting on planned changes to the Local Government Finance Settlement (2.81 in Autumn Budget document), Peter Ware, said: “Local authority leaders have for a long time called appealed to government to provide certainty over their funding settlements to help with long-term planning and for an end to competitive funding pots, which favour those councils best equipped for bidding.

“Now that the government has signalled an intention to move towards multi-year funding settlements that integrate previous grant funding pots, it’s crucial that local authorities get their act together so they’re able to demonstrate where funding is needed, as this will be crucial to their ability to access new public funding.

“The reason why such small amounts of Levelling Up Fund, Towns Fund and Shared Prosperity Fund money has been spent is because many councils haven’t known how to spend it effectively within the perimeters of those programmes.

“With greater scrutiny over value for the taxpayer on the horizon, government will want to target shovel-ready projects, or at least a clear path towards such schemes. This means local authorities must develop a coherent picture of the greatest investment needs within their areas, and a clear plan for how they would spend any new funding to improve the lives of their populations.”


Carly Caton, Partner specialising in commercial healthcare at UK and Ireland law firm Browne Jacobson, said:
“Any new funding that helps to add capacity will of course be welcomed within the NHS but to prevent this just being a sticking plaster, we must also identify new avenues to generate additional revenue for trusts and their NHS patients.

“The government should actively encourage trusts, backed by funded support programmes, to develop a commercial mindset and explore how to maximise their available resources, while simultaneously improving healthcare services for the general public.

“Increasing private patient activity within NHS hospitals is one of the easiest routes to achieving this. Most trusts already do this to some extent with private patient units but these tend to be relatively small, meaning they provide untapped potential in terms of raising additional income to plough back in to NHS services.

“There are numerous ways of expanding these units and it doesn’t necessarily require significant capital investment if a trust is willing to partner with a private provider. Partnership structures can extend from commercial agreements to developing some form of physical expansion to estates, and all whilst creating new income streams for NHS patients at no cost to the taxpayer.

“Many of our decision-makers are all too keen to shout from the rooftops about the NHS being broken but this isn’t necessarily the case – it boasts world-leading assets and expertise that, if harnessed correctly, provide ample opportunities for healthcare to help drive economic growth as opposed to hampering it.



John O’Connell, chief executive of the TaxPayers’ Alliance, said:

"We were consistently told that there was no need for big tax hikes because of a focus on growth, so taxpayers will be disgusted by the whoops and cheers of Labour MPs celebrating the fact that Rachel Reeves has just condemned the country to a record high tax burden.

"Given wider global uncertainties the stakes are incredibly high, yet we've doubled down on disastrous managerialism and decline. That means growth will flatline over the next five years, which is unsurprising given the assault on aspiration and wealth creation we've just witnessed.

"If the government ever wants to regain the trust of taxpayers it will need to rapidly find a way to halt the growing tax burden."

Responding to the increase in employer national insurance contributions:

“This astonishing hike in national insurance contributions for employers will decimate businesses up and down the country.

“And despite what the chancellor may claim, the grim reality is that the cost of this will ultimately be borne by working people through lower salaries.

“Labour should be apologising for what is clearly a manifesto breach that will do huge harm to taxpayers.”