Budget response 2017


By Rob Whiteman, CIPFA Chief Executive

This year’s Spring Budget was professional, it built on the previous Autumn Statement and was delivered by a confident chancellor.

The driving overall context remains that total national debt is too high and productivity too low. And so in response to this, the chancellor has launched a number of short and longer term initiatives that are aimed at tackling the issue, alongside some key support to deal with pressing problems that are happening now, namely social care. 

Recognising the Office for Budgetary Responsibility’s (OBR) warning over continuing low productivity across the UK economy, the Budget included very welcome support for boosting skills and local growth through the introduction of T-level qualifications – which goes a long way to improving the parity of esteem with academic learning – and maintenance loans for adult learners.

Another welcome bit of news came as the chancellor responded to the pressures on the health and social care system. This has meant an investment of an extra £2bn over three years in social care and increasing the NHS capital budget, both of which underpin the proposals in sustainability and transformation plans (STPs). Local authorities and healthcare partners will await clarification on what conditions apply and how this boost to funding will be accessed and distributed.

Of course, pumping more short term money into the system is not a silver bullet solution and so the government’s Green Paper that will examine how to place social care on a more sustainable footing over the long term is well overdue and much welcomed given our ageing population. However, it is worrying that the chancellor has already limited his options by ruling out some of the more radical proposals. It is imperative that all possible solutions are explored.

Investment in education was another key theme of the Spring Budget. The announcement of money to help rebuild and refurbish existing schools is encouraging, as is the recognition of the need and the new money to provide additional school places. But it will be important this modest investment in additional school places is in the areas of most acute need.

For the devolved nations, the additional funds are welcome. And as we move to an autumn Budget, such support for Scotland, Wales and Northern Ireland will be provided with advance warning ahead of setting their own budgets.

Additional financial support to help head off the furore over business rates revaluations was expected and we will just wait to see how that will work in practice, but also how the fundamental issues raised by the revaluation affect the longer term plans for the 100% retention of business rates by local government from 2020 on-wards.

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