The Budget 2014: the reaction

Local Government Lawyer rounds up the reaction of the sector - including the Local Government Association - to the 2014 Budget.

Sir Merrick Cockell, chairman of the Local Government Association

“The national housing shortage and lack of jobs for young people are two of the most pressing issues facing the country today. The Chancellor is right to address these in this year’s Budget and extra support announced for home buyers and small builders, along with additional funding for apprenticeships, are positive steps.  

“Much more can be done to build new homes, create jobs and stimulate the economy if local government’s hands were untied by the Chancellor to drive this through at a local level. We will continue pressing government to unlock the potential of local areas to solve these national problems through putting local businesses, colleges and councils in control of tackling youth unemployment and giving local authorities greater freedom to invest in new housing and infrastructure.

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“Bringing down spending on benefits through a welfare cap will only be truly effective when government also frees councils to build more social housing.

"While this Budget has not brought further cuts for local government, it has not changed the fact that the next two years will be the toughest yet for people who use and rely upon the services which councils provide. The black hole in funding for local bus services, a £10.5bn backlog in road repairs and continuing uncertainty over funding for much-needed reforms of the adult social care system have yet to be properly addressed.

"By next year, council budgets will have been cut by 40% from where they were at the start of this parliament. As the economy improves, people will increasingly start to question why councils are having to reduce and withdraw from providing the services that underpin their daily lives.

"If we are to avoid an upturn in the economy coinciding with a decline in public services, we need nothing less than a fundamental reform of the way the public sector works and an honest reappraisal of how public services are provided and paid for in post-austerity Britain.”

Dr Jonathan Carr-West, chief executive of LGiU

“A penny off a pint, fuel duty rises cancelled and bingo duty halved. As widely predicted, George Osborne’s fifth budget contained lots of popular measures. It was in many ways the definition of a pre-election budget: rewarding saving, reducing taxes for lower and middle income workers and support for pensioners.

“Local authorities will welcome extra support for housebuilding, with a £500m pot to provide financing to developers, a £150m pot to stimulate regeneration of housing estates and reform to the planning system to allow increased flexibility in change of use and a new retail class which could exclude betting shops and payday lenders.

“These measures are all things that local government has called for and will welcome. They will give democratically elected local councils more freedom to stimulate house building thus providing homes for local people and a boost to local economies and will help them regenerate high streets in interesting and varied new ways.

“Only local government has the local know how, the democratic mandate and the strategic vision to lead growth, though it must work with partners in the private and wider public sector to do so.

“This budget hints that central government finally gets that, but perhaps old habits die hard. The Chancellor also announced a £200m ‘challenge fund’ for pothole repair. Welcome money no doubt, but we might wonder if ‘challenge funds’ is just a fancy new phrase for ring fencing?”

David Simmonds, chairman of the LGA’s Children and Young People Board

"We are encouraged that the Government has recognised the excellent work councils have been doing to support families who need it most. The commitment to enable councils to help more families access the Troubled Families programme earlier will mean we are able to do more of the essential work that has already seen 62,000 families getting the help that they need.

"We will now look to work with the Government on the details to ensure that there is as little bureaucracy around the programme as possible so that councils can continue to lead the process and concentrate their efforts on helping families.

"The success of the Troubled Families programme should serve as a lesson to the rest of government in the savings and improvements to public services that can be achieved by adopting a community budget approach to delivering other local services."

Cllr Mike Jones, chairman of the LGA’s Environment and Housing Board

"By freezing the rate of landfill tax for 2015, Government has recognised the significant work by local authorities and residents to radically reduce waste sent to landfill by nearly 40% in the last five years.

"The landfill tax has achieved its goal of diverting waste from landfill and should be subject to a long-term freeze. It stands to raise the Treasury over £600m from taxpayers in 2014/15. This money should be returned to local taxpayers to be invested back into recycling and waste projects that will support local jobs and growth, rather than being used to boost Government funds."

Hugh Ellis, head of policy at the Town and Country Planning Association

“The announcement of the long-awaited garden city prospectus is undoubtedly an exciting and challenging opportunity for the government to use garden city principles to develop beautiful, well designed and inclusive new communities. Garden Cities are an essential part of the solution to the housing crisis along with the regeneration of our existing communities.

“From the principles of land value capture for the benefit of the community and long term stewardship of assets, to green infrastructure standards and mixed tenure homes that are affordable for all members of society, the garden city principles are key to realising the principles of sustainable development and delivering the low carbon communities of the future.”

Janet Askew, Vice President of the Royal Town Planning Institute

On the proposal to pilot financial incentives to individuals to accept development: “The RTPI feels that paying individuals directly to accept development is unsupportable. Whilst it is hard to object to pilot schemes, there are better uses of limited resources. The RTPI urges the Government to deploy its time and effort to look at potentially more effective ways to get homes built.

“Incentives for individuals to accept development have a number of drawbacks. Proposals that extend an incentive-led approach to individuals may lead to developing areas with fewer objections, rather than identifying the optimum location for communities. They send a signal out from Government that new homes are something which requires compensation, rather than something which addresses need. It is not clear how such incentives would work in relation with other mechanisms to mitigate impact such as section 106 agreements and the Community Infrastructure Levy.”

David Orr, chief executive of the National Housing Federation

“We welcome the Chancellor’s focus on housing and the announcement of a new garden city, but we think the Budget is a missed opportunity. Measures like Help to Buy are likely to stimulate demand for housing but the Budget does not go far enough to boost the supply of homes needed to meet that demand.”

On increasing supply: “The Chancellor says the 23% increase in house building is not enough and we agree with him. While he has taken some steps - like a new garden city - to increase supply, we were disappointed that he did not include measures to deliver homes more quickly, at little or no cost to the tax-payer. An effective release of public land for house building, increasing the borrowing capacity of housing associations and extending Government guarantees to back financing for new development, would all have made a significant and immediate boost to the supply of affordable homes.”

On Help to Buy: “While the extension of Help to Buy will assist some people to buy their own home in the short term, in the long term it risks fuelling a house price bubble. The longer that the new build housing market is dependent on Government intervention, the more difficult it will be for them to withdraw in future years. It will be hard for the Government to demonstrate Help to Buy will generate new homes being built that would not have already been developed. It is not the most effective way of using public investment and is far too small an amount to address the crisis.”

On garden cities: “We welcome the announcement of the new garden city in Ebbsfleet, but it will only make a difference if it is the first of many. The new homes in Ebbsfleet must not merely replace homes that would have been built elsewhere.”

Grainia Long, chief executive of the Chartered Institute of Housing

“Historically we know that small and medium sized builders have played a critical part in delivering new homes. We have been calling for government to introduce measures to support SME builders to increase the role they can play in addressing our national housing crisis. Following the credit crunch small builders have found it more difficult to access finance and government moves to help them get building by providing £500m of support are welcome.

“If we are going to build the number of homes that we need to solve the housing crisis, garden cities and other new developments are going to be a huge part of the mix.

“The Chancellor’s announcement of the Ebbsfleet garden city and developments in Barking, Riverside and Brent Cross is a welcome recognition of this. We hope this is start of things to come and that we will see more major announcements that will contribute to the supply of new homes.

“The Chancellor’s decision to extend Support for Mortgage Interest payments is an important recognition that many homes owners will still be recovering from the effects of the recession and need continued government support to remain in their homes.

“However, we are disappointed that the Chancellor did not choose to use the tax system to incentivise standards in the market rented sector. This sector is the fastest growing of all tenures it is vital that we take steps to ensure more consistent standards.

“For many people living in the market rented sector quality and standards are too often left too chance. Changing the tax system would reward landlords for doing the right thing, whilst not costing the government any additional money.

“We need to build 250,000 homes a year to keep up with our growing population, but we’ve been failing to reach that target for decades – the result is a housing crisis in which millions of people are being denied access to a decent home at a price they can afford. In his budget speech the chancellor claimed that the measures he announced would deliver 200,000 new homes, including the 120,000 homes supported by the extension of Help to Buy equity loans. This would be an important step along the road to addressing out housing crisis, but it still leave us with much to do.”

Tonia Secker, housing and regeneration partner at Trowers & Hamlins

On estate regeneration: "The Chancellor has referred to the establishment of a £150m fund to kick-start the regeneration of large housing estates through repayable loans from private sector developers. It's unclear as to what aspects of estate regeneration the fund is intended to address, and we look forward to seeing the detailed proposals for this area of housing, which has struggled to receive investment in recent years."

Brigid Simmonds, chief executive of the British Beer & Pub Association

“This is fantastic news, and George Osborne is again the toast of Britain’s brewers, pubs and pubgoers.  It will protect over 7,000 jobs over two years, mostly jobs of younger people in Britain’s pubs.

“It also shows that the Government has understood our case, that taxes on British beer had become far too high, and action was long overdue. I hope this becomes a trend in future budgets for this British-made, lower-strength drink.”

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