Budget 2016: key policy decisions by practice area

March 24, 2016

We highlight a number of the key policy decisions set out by the Chancellor of the Exchequer in 2016.

Housing and planning

Garden villages and towns: To support areas that want to establish garden villages the government will: provide capacity support for local authorities; introduce new legislation that will speed up and simplify the process for delivering new settlements; announce planning incentives to support areas seeking to bring forward new settlements, in return for commitments to significant housing delivery.
Moving to a more zonal planning system: The government will bring forward measures to enable a more zonal and ‘red line’ planning system, “where local authorities use their local plans to signal their development strategy from the outset and make maximum use of permission in principle, to give early certainty and reduce the number of stages developers must go through to get planning permission”.
Local Plans: Following the ongoing consultation on the delivery of Local Plans by 2017, the government will set out later this year details of measures to encourage the production of Local Plans. As recommended by the Local Plans Expert Group report, the government will also look at the scope to reduce the weight of outdated plans in decision-making. The government will consult on the other recommendations made by the Group until 27 April 2016.
‘Building Up’: Following the consultation on building up in London and to help increase densities on brownfield land and reduce the need to ‘build out’, the government will consult with city regions on extending similar powers as part of devolution deals.
Streamlining the use of planning conditions: To minimise delays caused by the use of planning conditions the government intends to: legislate to ensure that pre-commencement planning conditions can only be used with the agreement of the developer; and review the process of deemed discharge for conditions, to ensure it is effective and its use maximised.
Transparency of the land market: The government will consult on proposals to increase transparency in the property market, including by improving the visibility of information relating to options to purchase or lease land.
Secretary of State planning decisions: The government will set statutory three-month deadlines for Secretary of State decisions on called-in applications and recovered appeals to prevent time-delays on decisions on infrastructure, housing and regeneration projects.
Stations regeneration: The Homes and Communities Agency will work in partnership with Network Rail and local authorities to bring forward land around stations for housing, commercial development and regeneration, and will announce proposals for specific sites shortly.
Compulsory Purchase Order reforms: The government will consult on a second wave of Compulsory Purchase Order reforms with the objective of making the Compulsory Purchase Order process clearer, fairer and quicker.
Mobile communications infrastructure: Following a call for evidence published alongside the Productivity Plan, the government will announce details of greater freedoms and flexibilities in England to support the deployment of mobile infrastructure.
Enterprise zones: A new MarineHub Enterprise Zone in Cornwall will be created following the transfer of Wave Hub to Cornwall Council. Subject to the necessary business case approvals and local agreements, the government will also create new Enterprise Zones in Brierley Hill in Dudley, and Loughborough and Leicester, as well as extending the Sheffield City Region Enterprise Zone. The government will also ensure that all zones are able to offer Enhanced Capital Allowances for eight years following the establishment of the ECA site.
Private Rented Sector (PRS) Guarantee: The government will extend the PRS guarantee scheme until December 2017 to encourage long term institutional investment in the private rented sector.
Starter Homes: The government will launch the Starter Homes Land Fund prospectus. This prospectus invites local authorities to access the £1.2bn of funding to remediate brownfield land to deliver Starter Homes.
Investment in low-cost homeownership: The government will explore options for encouraging private investment in low-cost homeownership, including the scope to use guarantees.
Help to Buy: Shared Ownership: The government will launch the Help to Buy: Shared Ownership Prospectus in April. The prospectus will invite private developers to come forward and bid for funding to build Shared Ownership homes.
Local authority land: Local authorities will collaborate with central government on a local government land ambition, working with their partners to release land with capacity for at least 160,000 homes, helping to support the government’s policy of regenerating council housing estates. The government will continue to work with the sector to look for opportunities to go further, with a view to raising the ambition.
Homelessness: To support vulnerable rough sleepers off the streets and to help those who are recovering from homelessness, the government will: invest £100m to deliver low-cost ‘second stage’ accommodation places for rough sleepers leaving hostel accommodation and domestic abuse victims and their families moving on from refuges; invest £10m over two years in initiatives to support and scale-up innovative ways to prevent and reduce rough sleeping, particularly in London, building on the success of the No Second Night Out initiative; double funding for the Rough Sleeping Social Impact Bond announced at the Spending Review, from £5m to £10m, to drive innovative ways of tackling entrenched rough sleeping, including through ‘Housing First’ approaches; help rough sleeping EU migrants to return to their home countries - building on the Operation Adoze pilot, the government will roll out a new approach in which immigration officials work with local authorities and outreach workers to connect rough sleepers to services that can return them home.
Supported accommodation: The government "recognises the important work of providers of supported accommodation", including the providers of homelessness shelters and other services for those who may otherwise be sleeping rough. On 1 March 2016 the government confirmed that the date from which Local Housing Allowance caps apply to new tenancies in the supported accommodation sector will be delayed by one year. It will now apply to tenancies in this sector signed after 1 April 2017. The evidence review of the supported accommodation sector, due to report in the spring, will provide a foundation to support further decisions on protections for the supported housing sector in the long term.
Right to Buy pilot: As announced at Autumn Statement, the government is piloting the Right to Buy with five housing associations, to inform the design of the final scheme.
Home ownership: The government will explore ways to extend home ownership to social tenants who cannot afford to take advantage of existing schemes.
Pay to Stay taper: The government will introduce a taper within Pay to Stay, so that rents rise gradually above the minimum income thresholds of £40,000 in London and £30,000 outside of London.
Making Pay to Stay voluntary for housing associations: As announced as part of the government’s deregulatory strategy for the housing association sector, Pay to Stay will be implemented on a voluntary basis by housing associations.
Improvements to the home buying process: The government will shortly publish a call for evidence looking at the process of buying a home.

Devolution

New devolution deals: Deals with the West of England, East Anglia, and Greater Lincolnshire have been announced. The government has also agreed a £1.2bn city deal for the Cardiff Capital Region with the Welsh Government and local partners.
Greater Manchester and Liverpool City Region - further devolution: A further devolution deal with Greater Manchester and a second devolution deal with Liverpool City Region have been agreed. The government is to work with Greater Manchester on the devolution of powers over criminal justice services, as well as supporting the establishment of a Life Chances Investment Fund. The Liverpool City Region deal gives the area additional new powers over transport, pilots the approach to 100% business rate retention across the city region, and commits the city region and government to work together on children’s services, health, housing and justice.
Devolution deals and single pots of funding: Previously agreed mayoral devolution deals will each receive un-ringfenced single pots of funding to spend on local priorities, worth £2.86bn in total. “This flexibility will allow areas to take more control over strategic investment.”
Business rates retention: The government will pilot the approach to 100% business rates retention in Greater Manchester and Liverpool City Region and will increase the share of business rates retained in London. “This will help to develop the mechanisms that will be needed to manage risk and reward under 100% rates retention and will help authorities to build financial capacity to reform core services and invest in long term economic growth from 2017 – three years ahead of schedule. The offer is open to any area that has ratified its devolution deal.”
Local Growth Fund: Further steps in the allocation of the Local Growth Fund have been announced, including: up to £1.8bn will be allocated through a further round of Growth Deals with Local Enterprise Partnerships later this year; a further £2bn of the Local Growth Fund will be allocated through the Home Building Fund.
LGPS and British Wealth Funds: Proposals have been received from Local Government Pension Scheme administering authorities to establish a small number of British Wealth Funds across the country by combining their assets into much larger investment pools. These pools will deliver annual savings of at least £200-300m. The government will work with administering authorities to establish a new Local Government Pension Scheme infrastructure investment platform, in line with their proposals, to boost infrastructure investment.
Moving civil servants out of Whitehall: An “ambitious” strategy is being developed to move civil servants out of expensive Whitehall accommodation and into the suburbs of London. “Over the next few years the numbers working in central London will reduce significantly.” In addition, by the middle of this Parliament the Ministry of Justice will have a major programme to create substantial centres of expertise outside the capital.

Property, Projects, Transport, Energy

National Infrastructure Commission (NIC): The government accepts the National Infrastructure Commission’s recommendations in its first three reports. The government is consulting on the structure, governance and operation of the NIC, which is currently in interim form, and proposes to introduce legislation to put it on a statutory footing. The public consultation closed on 17 March.
Northern transport: £300m of funding will be provided to improve northern transport connectivity and the green light will be given to High Speed 3 between Leeds and Manchester to reduce journey times to around 30 minutes, in response to the NIC’s report ‘High Speed North’.
Crossrail 2: The green light will be given to Crossrail 2, supported by £80m to help fund development, in response to the NIC’s report ‘Transport for a World City’. The government will ask Transport for London to match that contribution, with the aim of depositing a Hybrid Bill within this Parliament.
Further work by NIC: The NIC will be asked to carry out two new studies on the following infrastructure challenges: an assessment of how the UK can become a world leader in 5G deployment, and how it can take early advantage of the potential benefits of 5G services (this review will include a case study of the south-west of England); and proposals for unlocking growth, housing and jobs in the Cambridge-Milton Keynes-Oxford corridor.
National Infrastructure Delivery Plan: The government will shortly publish a National Infrastructure Delivery Plan, setting out details of over £100bn of public sector investment in infrastructure across this Parliament.
Shale Wealth Fund: The government will consult later this year on the priorities and delivery models for the Shale Wealth Fund, and how it can be deployed in local communities and the North as a whole. “The Shale Wealth Fund could be worth up to £1bn over 25 years and will provide additional funds over and above industry schemes and other sources of government funding.”
Potholes: The allocation of the £50m Pothole Action Fund for England in 2016-17 has been announced, “enabling local authorities to fill nearly a million potholes”.
Flood defences: There will be an additional boost to spending on flood defence and resilience of over £700m by 2020-21. The government will increase maintenance expenditure in England by £40m per year, and deliver more flood defence schemes – including investing over £150m in Leeds, York, Calder Valley, Carlisle and wider Cumbria.
CRC energy efficiency scheme: The government will abolish the CRC energy efficiency scheme (CRC) following the 2018-19 compliance year, "ending a complex scheme with bureaucratic and costly administrative requirements. It will significantly streamline the business energy tax landscape by moving to a system where businesses are only charged one energy tax administered by suppliers rather than CRC participants being required to forecast energy use, buy and surrender allowances”.

Education

Soft drinks levy: a new soft drinks industry levy will be introduced and targeted at producers and importers of soft drinks that contain added sugar. The levy is expected to raise £520m in the first year. The monies will be spent on primary school PE and sport, helping schools support healthier lifestyles, extending the school day at secondary schools, and expanding breakfast clubs.
Longer school day: The government will provide up to £285m a year to give 25% of secondary schools increased opportunity to extend their school day.
Expand breakfast clubs: Starting from September 2017, the government will provide £10m funding to expand the number of healthy breakfast clubs.
Every school an academy: The government expects all schools to become academies by 2020, or to have an academy order in place in order to convert by 2022.
National Funding Formula for schools: Subject to consultation, the government’s aim is for 90% of schools who will gain funding increases to receive the full amount they are due by 2020. To enable this the government will provide around £500m of additional core funding to schools over the course of this Spending Review, on top of the commitment to maintain per pupil funding in cash terms. The government will retain a minimum funding guarantee.
Northern Powerhouse Schools Strategy: The government will invest £20m a year to raise education standards across the Northern Powerhouse. This will be achieved by: bringing in support from proven leaders and outstanding schools in neighbouring areas to mentor weaker schools; boosting funding available for turnaround activity in coasting and vulnerable schools; fast-tracking the best local schools to become Teaching Schools and the best local heads to become National Leaders of Education; providing funding to establish a Northern branch of the New Schools Network and investing to expand the best academy chains and develop new sponsors in the North; Sir Nick Weller leading a report into transforming education across the Northern Powerhouse.
Double primary school PE and sport premium: From September 2017 the government will increase the primary school PE and sport premium funding from £160m per year to £320m per year.
Post-16 maths: The government will ask Professor Sir Adrian Smith to review how to improve the study of maths from 16 to 18.
Mentoring: The government will provide £14m over the Spending Review period to deliver a mentoring scheme for disadvantaged young teenagers.
Alternative provider growth: The government will continue to free up student number controls for alternative providers predominantly offering degree level courses for the 2017-18 academic year. The best providers will also be able to grow their student places further through the performance pool.

In-house and legal services

Transparency in local authority services: The government will consult on new rules requiring local authorities to be transparent about the cost of the in-house services they provide.
Competition in legal services: The government will shortly consult on reforms to improve choice and competition in legal services by making it easier for new providers to enter the market.

Litigation and regulatory/trading standards

Claims management companies: The government accepts the recommendations of the independent review into the regulation of claims management companies. “The new regime will be tougher and will ensure CMC managers can be held personally accountable for the actions of their businesses.” In order to ensure that the new regulatory regime is implemented effectively, the government intends to transfer responsibility for regulating CMCs to the Financial Conduct Authority.
Smallest businesses acting as consumers: The government is consulting on measures to ensure that the smallest businesses – including sole traders – understand their rights and have the protections they need when they are acting as consumers.
Criminal justice in Greater Manchester: The government will work with Greater Manchester on the devolution of powers over criminal justice services, as well as supporting the establishment of a Life Chances Investment Fund. “The radical devolution of justice responsibilities will enable Greater Manchester to offer seamless interventions for offenders as they transition between prisons and the community, and to join up public services to tackle the causes of crime and prevent reoffending.”

Employment and pensions

Apprenticeships: The government will deliver three million apprenticeship starts by 2020. As announced at the Autumn Statement 2015, an apprenticeship levy will be introduced in April 2017, and employers that are committed to training “will be able to get out more than they put in”.
Support for disabled people and those with mental health conditions: The government has accepted the recommendations of an independent stakeholder group and will offer new peer and specialist support for those suffering from mental health conditions and young disabled people. Later this year, the government will publish a White Paper focusing on the roles that the health, care and welfare sectors can play in supporting disabled people and those with health conditions to get into and stay in work.
Off-payroll working and the public sector: From April 2017, where the public sector engages an off-payroll worker through their own limited company, that body (or the recruiting agency if the public sector body engages through one) will become responsible for determining whether the rules on off-payroll working should apply, and for paying the right tax. "This strengthens the public sector’s role in ensuring that the workers it engages comply with the rules." The government “also recognises that the current rules are seen as complex and can create uncertainty”. It will therefore consult on a simpler set of tests and online tools that will provide a clear answer as to whether and when the rules should apply.
Public service pensions SCAPE discount rate: The government has reviewed the discount rate used to set employer contributions to the unfunded public service pension schemes. The discount rate is being set at 2.8% and employers will pay higher contributions to the schemes from 2019-20 as a result.
Local Government Pension Scheme: British Wealth Funds: The government will support proposals by local administering authorities to establish both a small number of British Wealth Funds by combining Local Government Pension Scheme assets into much larger investment pools by 2018, and a national Local Government infrastructure investment platform.

Source: Policy paper, Budget 2016, HM Treasury