Budget doesn't get the job done


By Rob Whiteman, CIPFA CEO

Today’s Budget was an opportunity. An opportunity to take bold action on a number of challenges facing the country. But in many ways, it fell spectacularly short. We’re pleased to see funding increases for the NHS, housing and education – but we’re also concerned about what the Budget is missing. New Chancellor Rishi Sunak repeated the tagline ‘this government gets the job done’ – but does it really get it done for local government in the long run?

Of significant importance were the alterations made to business rates - the introduction of a tax holiday for many, the provision of cash grants for some and increases in rate relief for others. While it is absolutely right that communities and individuals are supported during this difficult time, it is also essential that thought is given to the funding implications for local government.

However, while businesses and individuals will no doubt be relieved at today’s announcements, the question of how public services will be funded remains. The legislative framework for local government continues to increase councils’ reliance on business rates to fund everything from police to schools; so, if business rates are being scrapped for some, how will these funds be replaced? There are already long-standing concerns about how vital public services will continue to be provided to those who need them as demand continues to rise. The Budget this afternoon did not provide an answer.

While we welcome the swift response to the coronavirus outbreak in the form of additional funding for the NHS and relief for small businesses, the Budget was distinctly lacking in details around social care funding. As the spread of COVID-19 progresses, there will arguably be more pressure on social care and public health services provided by local government. Will the NHS blank cheque extend to them as the crisis escalates? The government has once again demonstrated that the burden of paying for these fundamental services may continue to fall on the citizen.

The population continues to live longer in poor health – all factors adding pressure to health and social care services. These are all things we’ve said before, and at this point we sound like a broken record, but radical changes must be made if we are to continue the same standard of life into the foreseeable future.

On a positive note, there were mentions of significant cash injections into flood recovery and prevention, the expansion of safe and affordable housing and an investment into green initiatives – all steps forward that we have called for in the past and fully support in their implementation.

We’ve been pushing for the Treasury’s Green Book to be rethought in an effort to bring equality of investment to 'forgotten’' areas of the country for some time. We’re pleased to see that a commitment was made to encourage devolution and bring prosperity to local communities throughout the UK. There has been a longstanding need to invest in roads, railways and infrastructure to ensure that everyone has the tools to succeed in life. We applaud that those steps may soon be taken.

While there is much to praise in today’s Budget announcement, we can’t afford to forget the needs of local government. Public services are on their knees and will continue to struggle if one of their primary sources of funding, business rates, are cut for the next year.

In the interest of those who will continue to rely on public services in their local communities, we must have clarity on how to recuperate these lost funds. The only way that we can truly ensure our future prosperity is by taking care of the most vulnerable people in our society, beginning locally. Without this, we’ll never get the job done.

This article first appeared in Public Finance.

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