Manchester City Council

Cheshire East Council

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Budget 2021: reaction from the sector

Local Government Lawyer looks at the reaction of the sector to Chancellor Rishi Sunak’s Budget.

Click here for some of the key measures in this year’s Budget.

Cllr James Jamieson, Chairman of the Local Government Association

On local recovery

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“Tackling the economic challenges ahead is a huge task. It is councils who know their local areas best and must be able to lead efforts to rebuild and level up our economy, get people back into work and create new hope for communities. It is good that councils have been placed at the heart of the delivery of new funds such as the Levelling Up Fund and Community Renewal Fund. We look forward to working with Government on the detail but are concerned by the prospect of competitive bidding processes at a time when councils want to be fully focused on protecting communities and businesses from the impact of the pandemic.”

On business support

“Emergency government grants distributed by councils have been a vital lifeline to struggling businesses worried about the future during the pandemic. It is good that further funding will be provided to support businesses and councils remain ready to use their local knowledge and expertise to distribute this new money quickly.”

On furlough/jobs

“The COVID-19 pandemic could lead to the number of long-term unemployed people across England reaching 1.2 million. The furlough scheme has been vital in securing jobs that may have otherwise been lost so it is important that it has been extended. It will be crucial to ensure people seeking to re-enter the labour market get the local support, advice and training they need to face the future. Councils stand ready to work in partnership with the Government at the earliest stage to shape new and re-design existing Plan for Jobs initiatives, so they are effective and connected on the ground to ensure no community is left behind.”

On Universal Credit

“Many households could be economically vulnerable for some time so we are pleased that the Chancellor has announced an extension to the universal credit uplift. We remain clear that this must be kept in place for as long as it is needed so that households are not pushed into financial hardship as a result of vital support being withdrawn. The mainstream benefits system will need to provide the first line of support to those in need with councils given adequate local welfare funding to provide additional help.”

On council funding/social care

“Councils continue to lead local efforts to protect lives and livelihoods from COVID-19 but still face substantial cost pressures and income losses. The Government has provided a significant financial package of support so far to help but the ongoing financial impact and unpredictability of the pandemic means this support must be kept under review. We continue to call on government to meet – in full - all cost pressures and income losses incurred by councils as a result of the pandemic.

“Further action is also desperately needed to immediately shore up social care services, and to secure the long-term future of care and support. The Government must urgently bring forward its proposals, including a clear timetable for reform, so that we can finally put social care on a sustainable footing and enable people to live the lives they want to lead.

“Public finances are undoubtedly under huge strain but investment in our local services will be vital for our national economic and social recovery. Alongside sustainable long-term investment for councils in the forthcoming Spending Review, bringing power and resources closer to people is the key to improving lives, tackling deep set inequalities and building inclusive growth across the country as we move forward.”

David Hutton, partner and head of local government at national law firm Bevan Brittan

“The response to the pandemic by local government has been extraordinary – and all in the context of unprecedented and continued financial pressures.

“It is disappointing that there was no mention or indication in the budget of a multi-year spending settlement to allow councils to plan and support their communities as they recover from the pandemic.

“While it seems there will be no immediate help for councils with pressures on their revenue budgets (and no mention of social care), it was encouraging to hear more details on previous announcements from the Chancellor that will help councils with capital projects and local investment into infrastructure. As councils look to facilitate the growth of their towns and cities and re-imagine future needs arising from climate; changes in the future of work; retail and community spaces, more Town Funds and the launch of the Levelling Up Fund plus the National Infrastructure Bank may be supporting factors provided monies can flow quickly and minimise repeated applications to Government for pots of money. However, unless there is a way to accelerate these capital schemes, they will take years to deliver and may leave communities questioning whether levelling up is happening. We await the National Infrastructure Commission Towns and Regeneration with interest.”

Jonathan Carr-West, Chief Executive of LGIU

“The Chancellor’s Budget has fallen short when it comes to what councils up and down the country desperately need to help their communities out of this pandemic.

“While everyone’s attention has been on Covid-19, no strategic progress has been made on any of the key issues that matter to councils, even as they get progressively worse. No social care green paper, no Fair Funding Review, no business rate retention scheme, no devolution white paper.

“The state of local government finances is not only unsustainable it is failing fast. Our survey of those leading across local government has shown this time and time again.

“All these problems have been decades in the making with councils left to pick up the pieces, all while operating in conditions of deep uncertainty. And as councils across the country set their budgets on the basis of another ad hoc one year financial settlement, these uncertainties make their job even harder.

“The Chancellor made much of the UK’s potential as we recover from the pandemic but that recovery will depend on local government being as fighting fit as possible, and that fitness is undermined in many key areas by our failure to address these long-standing policy dilemmas.

“Local government is at the centre of communities and provides the services that matter most to people in their daily lives. The pandemic has highlighted that, but neither local government nor the local public service workers we have spent the last year so effusively praising see any benefit from this budget. Unless we are building prosperous, resilient, well governed places then the Chancellor’s vision of a green, high tech, high skills economy will be built on sand.

“We still have a long way to go.”

Cllr David Williams, chairman of the County Councils Network

“This Budget understandably focuses on the ongoing pandemic and economic recovery efforts. We are pleased that the government has listened to the County Councils Network and has acknowledged the strategic role of county authorities in helping to drive growth and recovery through their lead role in delivering the new UK Community Renewal Fund and in bidding for key projects through the Levelling Up Fund. Counties will put forward ambitious proposals, working with local partners.

“Other economic support, such as an extension to the furlough scheme, grants for businesses, new infrastructure bank and next round of Town Deals are all welcome. England’s counties are particularly vulnerable, with over half of their workforce in jobs at risk of widespread closures so it is crucial that this funding is quickly distributed to those sectors and individuals, and the possibility of more support if needed is kept on the table.

“To date, the government has provided local authorities with a sizeable amount of support during the pandemic – but this must be kept under review in the case further substantive costs are incurred this year.

“The Chancellor is right to say that public spending reductions should not bear the burden of reducing the national debt in future years. Councils still face a funding gap that pre-dates Coronavirus which must be addressed in the Spending Review later this year. In tandem with this, it is imperative that the government brings forward proposals to reform funding for adult social care and its Fair Funding Review for councils, both of which were delayed until we get over the worst of the Coronavirus.”

Jonathan Werran, Localis chief executive

“The recovery Budget will be judged by how quickly furloughed employees return to work and the quality and numbers of new jobs created, in traditional as well as high-growth innovation sectors, in the aftermath of lockdown.

“Last year there was much talk of a modern day ‘Marshall Plan’ to target investment where it was most needed and would deliver the greatest growth dividends.  So in this context, the recovery will succeed or fail in how efficiently and directly these cash pots - whether the £5bn high street fund, the new wave of town deals, the Levelling Up or UK Shared Prosperity funds - are parcelled out to local delivery agents and put to immediate good use in restoring place prosperity.

“Support for community assets in the £150m fund which is open to help shore up some of the nation’s pubs from closure is also to be greatly welcomed.  Pubs are social anchors without equal and are central in building a sense of community cohesion.   It’s easy to say ‘We will miss them when they’re gone’, but they are simply irreplaceable. This is especially the case in rural and left-behind areas where their loss could unravel the social fabric in our cities, towns and villages.”

Jenny Coles, President of the Association of Directors of Children’s Services

“Today’s Budget announcement will provide some much needed relief for some of those families that have been impacted hardest by the pandemic. It is right that the £20 uplift to Universal Credit will continue for a further six months and we welcome extra funding for programmes supporting victims of domestic violence. However, it is deeply disappointing that the Chancellor was silent on the rising pressures in children’s services, or even any of our public services. The difficulties that local authorities and frontline workers face will continue beyond the next six months and the government needs to do all it can to back these vital services.

“Since 2010, funding for local authorities has been halved while need has risen, even before the pandemic first hit. More families that did not previously rely on our services are now needing our support and we are only just seeing some of the long-term impacts of the pandemic on vulnerable children and families. We must do what is right for these children by being able to invest in early help services and meeting their needs before they escalate.

“If this government is truly serious about ‘levelling up’ then greater focus and prioritisation needs to be given to children and their families, particularly the most vulnerable. Our peak in activity is yet to arrive, but when it does we must be fully resourced so that all children receive the support they deserve.”

Kate Henderson, Chief Executive of the National Housing Federation

“This budget is an important step in helping the country get back on its feet, as we navigate our recovery from the pandemic.

"Housing associations see every day how the Universal Credit uplift provides much needed relief for those living on the lowest incomes - so its short-term extension is welcome. This extra £20 a week helps families buy enough food to feed themselves and pay their rent. That said, we are concerned that families and children will face the same risk of financial hardship in six months' time, when the effects of the crisis will still be felt. 

"It's good to see the government bring forward exemptions to the shared accommodation rate, ensuring independent living is more affordable for people under 25 who have experienced homelessness and care leavers. This will also help people to move on from emergency accommodation more easily. Extra funding to support survivors of domestic abuse is also welcome news and we’ll look forward to seeing more detail on this.

"The announcement of a new MMC taskforce is positive, as well as the focus on helping people get onto the housing ladder. We must not forget for those on the lowest incomes who cannot afford to buy their own home, building more social housing in the coming years will also be crucial to recovery.” 

Victoria Hills, Chief Executive of the Royal Town Planning Institute

“We all welcome the return of non-essential services to the high streets and local businesses will be helped by the announcements today. However, we are concerned that our high streets’ revival from the pandemic will be undermined by the proposals by Government to allow developers carte-blanche to turn our high street shops and services to residential without going through the democratic planning process that supports a mixed-use approach to placemaking. This will really impact local economies and communities at a time where it is vital we re-open our high streets.

“Housing supply could have been increased instead through Government loans guaranteed for developers to build on currently uneconomically viable sites within our cities and towns. We believe that the chancellor has missed a trick.”

Phillip Woolley, Head of Public Services Consulting, Grant Thornton UK

“Local government featured in a limited way in this year’s Budget, but it’s positive to see that the Chancellor confirmed there will be no step back into austerity measures. The sector will have been eager for an update on the timing of this year’s Spending Review, and the period it will cover, with the sector remaining uncertain of its funding position beyond March next year – but this was not forthcoming. There was also no indication from the Chancellor on the future funding of social care which has seen acute increases in demand this year partly as a result of the pandemic.

“The numerous programmes, initiatives and additional funding announced to support the economic and societal recovery are welcome and much needed, and will help support towns and communities as they start to recover from the pandemic. While some measures are targeted at specific regions, such as the new freeports, new economic development funding for local government appears to be limited to the funding from the new UK Infrastructure Bank; designed to increase infrastructure investment and promote economic recovery as part of the government’s levelling up agenda.

“An interesting element of the new Infrastructure Bank is the creation of a new advisory service which will provide support to project sponsors in the development and structure of projects. There are parallels with the advisory services provided by Scottish Futures Trust, and it’s encouraging to see support now set to be on offer across the whole of the UK.”

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