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Spring Budget 2023: reaction from the sector

Local Government Lawyer looks at the reaction of the sector to Chancellor of the Exchequer Jeremy Hunt's Spring Budget 2023.

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Cllr James Jamieson, Chairman of the Local Government Association

“It is good that the Chancellor has acted on council calls for funding and measures to widen employment support, improve local roads, protect swimming pools from rising costs and funding for vital regeneration efforts. Lower borrowing rates for councils will also provide a boost for vital council housebuilding projects.

“A third round of levelling up funding will give councils the opportunity to forge ahead with ambitious plans to transform their communities and unlock potential for more local growth. However, we remain clear that levelling up should be locally led by evidence of where crucial investment needs to go to, not based on costly competitive bids between areas.

“Given this is a ‘back-to-work’ Budget, it is disappointing there is no further investment in adult social care, public health and children’s services, which all play a vital role in supporting economic growth and helping people back into work, alongside boosting people’s health and wellbeing.

“We are pleased the Government has acted on our calls for investment in early years education and childcare. Councils have a duty to ensure sufficiency of local provision and so will need to be given a key role in making sure they succeed. Delivering on today’s announcements will also require significant investment into the workforce and early years’ facilities.

“Every local economy is different, and people can find themselves ‘economically inactive’ for different reasons. With control over fragmented and disjointed national employment and skills funding and schemes, councils could build on their track record of helping get people back into the workplace - including those who are furthest from the jobs market - and plugging growing skills gaps.

“We want to work with government on a long-term funding plan which ensures councils have adequate resources to deliver local services for our communities. Alongside sustainable long-term investment in local services, bringing power and resources closer to people is also key to improving lives and building inclusive growth across the country, and many more places are ambitious to follow in the footsteps of the devolution trailblazers which are a positive step towards more local decision making.”

Andy Burnham, Mayor of Greater Manchester

“This is the seventh devolution deal Greater Manchester has agreed with the government and it is by some way the deepest. This Deal takes devolution in the city-region further and faster than ever before, giving us more ability to improve the lives of people who live and work here.

“I have always been a passionate believer in the power of devolution, and I’ve been in the privileged position of being able to exercise those powers and make a positive difference to people’s lives.

“We’ve worked hard to secure this Deal and have achieved a significant breakthrough by gaining greater control over post-16 technical education, setting us firmly on the path to become the UK’s first technical education city-region; new levers and responsibilities to achieve fully integrated public transport including rail through the Bee Network by 2030; new responsibilities over housing that will allow us to crack down on rogue landlords and control over £150m brownfield funding; and a single block grant that will allow us to go further and faster in growing our economy, reducing inequalities and providing opportunities for all.

“With more power comes the need for great accountability and I welcome the strengthened arrangements announced in the Deal.

“While we didn’t get everything we wanted from the Deal, we will continue to engage with government on those areas in the future. For now, our focus will be on getting ready to take on the new powers and be held to account on the decisions we will be making on behalf of the people of Greater Manchester. Today is a new era for English devolution.”

Cllr Georgia Gould, Chair of London Councils

“More ambitious action is still needed for tackling the worsening homelessness crisis. Our latest figures show at least one child in every classroom in London is homeless. There are 81,000 children in temporary accommodation across the capital, worrying about where their family is going to live.

“We had hoped to see the Chancellor announce a rise in the Local Housing Allowance, which would go a long way to making housing more affordable for low-income Londoners. We also need much more support for building the affordable homes that our communities desperately need. 

“Further devolution to the capital is vital. Boroughs would be in a much better position to tackle many of London’s longstanding challenges if we could take the lead on policy decisions and direct resources for investing in services.

“Boroughs remain as committed as ever to working with the government on these issues and in securing a fairer, more prosperous, and more sustainable future for London that delivers for our residents and for the UK economy.”

Jonathan Carr-West, Chief Executive, Local Government Information Unit (LGIU)

“There was some good news for localists in today’s budget. Multi-year finance settlements and a single budget for Greater Manchester and the West Midlands is a positive step and one that we have long called for at LGIU. We should note though, that this budget only covers devolved policy areas, so large elements of public service spending are left outside it.

“There will be few tears shed in the sector over the demise of LEPs. Local government is more democratically accountable and better positioned to drive strategic economic development and to facilitate the necessary local partnerships.

“Three quarters of councils in our recent State of Local Government Finance report called for a 100% business rate retention and will be pleased to see the Chancellor confirming his intention to introduce this.

“But while we should welcome moves to localise growth and empower local leaders, other aspects of the budget appear to confirm the Government’s unfortunate tendency to command and control.

“More competitive bid funding in the Levelling Up Fund, investment zones to be decided on by central government, even the £63 million on swimming pools will be within the Government’s gift.

“On top of which we see reports that the Mayors in West Midlands and Greater Manchester will now be subject to scrutiny from committees of MPs. This is a move in the wrong direction when we should instead be strengthening their accountability to local people, not Westminster.

“Overall this feels like a budget of a government that recognises the importance of local leadership but just can’t bear to let go.”

Nicola Gooch, Planning Partner at Irwin Mitchell

“The Budget has set out yet another re-invention of 'Investment Zones', a policy that has been widely trailed over the last few days. The proposals are significantly scaled back, when compared to last year’s iteration of the policy, but would still provide additional investment and resources to twelve ‘investment zones’ across the UK including eight mayoral authorities in the Midlands and the North of England. The main purpose of the new Investment Zones, appears to be to act as incubators for new industries or start-ups – as they are largely centred on universities. We also have the promise of more funding for new infrastructure projects and regeneration schemes across the country, again in service of the Levelling-Up Agenda. We have also had promises of new levelling-up partnerships and greater devolution, with consultations promised on how best to give local authorities greater power and also – for the first time – to allow mayors outside of London to set the strategic direction of their own Affordable Housing Programmes. This is a long overdue acknowledgement that centrally set targets for affordable housing products, such as first homes, simply do not work for all parts of the country.

“The biggest news in the budget for planning, however, was not investment zones, but the promise of additional help in tackling nutrient neutrality issues throughout England and, in particular, to provide funding for local nutrient neutrality schemes. Whether local nutrient neutrality schemes will be able to help, will in part depend on how quickly councils are able to get them up and running - but given that the HBF estimates that nutrient neutrality rules are currently holding up the development of at least 120,000 new homes, anything that can help ease the situation is to be welcomed- particularly as the proposals in LURB to force water companies to tackle pollution at source are not likely to become effective until 2030.”

Suzanne Benson, Partner and Head of the Manchester office at Trowers & Hamlins

"It was good to see an acknowledgement of the importance of regeneration in this Budget with investment zones identified and funding pots announced to support local regeneration projects as well as further funding for new levelling up partnerships. At this stage the pots are relatively limited, so the challenge for government will be to work with local partners – both public and private – to maximise the impact for communities.

"The detail of the long awaited Trailblazers devolution deals includes an ability for Greater Manchester to set its own investment targets for the Affordable Housing Programme which will hopefully bring with it an increased flexibility for local delivery which to date has only been available in London."

Phillip Woolley, Head of Public Sector Consulting, Grant Thornton UK LLP

"Levelling Up remained a core focus in today’s Budget, with trailblazer areas getting more power to make local decisions on critical elements such as transport and skills, and the announcement of 12 new investment zones.

“The direction of travel is clear, with focused pockets of further devolution giving greater autonomy to these local leaders, empowering them to address local challenges and seize the opportunities available to deliver sustainable local growth. However, the needs of local areas differ greatly across the UK and this move towards a more place-based approach is still too narrowly focused on just a handful of select regions, with a lack of clarity on what this means for devolution across the rest of the country.  

“As their powers grow, local leaders will likely face increased scrutiny and heightened expectations to deliver. They will need to focus on ensuring that there is transparency in their actions, adequate capacity and capabilities to deliver on any promises made, and that any commitments are backed up by clear KPIs and monitored closely with appropriate governance arrangements.

“With less than £1billion of additional funding for Levelling Up announced today - the main challenge remains the availability of funding to deliver meaningful change in our local areas.

“While there is a long-term commitment to the trailblazer areas retaining 100% of their business rates, the Budget failed to provide greater financial sustainability for the rest of the public sector, and uncertainty remains around key issues such as local government funding."

Cllr Tim Oliver, Chairman of the County Councils Network

“Today’s Budget was delivered in a challenging set of financial and economic circumstances. Key to addressing this is supporting county authorities to promote and secure local growth, and today had a range of positive announcements.

“The County Councils Network (CCN) has long argued that county roads and infrastructure are the arteries of England’s economy. Last week the network warned that its councils will have to scale back roads maintenance and infrastructure improvements due to inflation, so the announcement of an additional £200m of capital funding for councils shows that the government has acted on our calls and provided a significant boost to local authorities.

“Whilst this funding, alongside the announcement of £63m for leisure centres will make a big difference, they do not address all of the extra inflationary costs impacting on councils, and some difficult decisions will still be required.

“The Budget also took important steps forward in enabling local leaders to drive local growth. CCN strongly supports the government’s intention to transfer functions of Local Enterprise Partnerships to councils. County and unitary authorities are best placed to deliver local skills and business support programmes, in close collaboration with business partners, and we will work closely with ministers to develop their proposals through the consultation.  

“This must be combined with devolving greater powers and funding to local leaders to drive local – and therefore national – growth. Confirmation that the government intends begin a new wave of devolution negotiations this year is very welcome. We need to go further and faster on this agenda which is why CCN has called on government for two-thirds of its members to have either agreed a deal or begun negotiations by the end of this Parliament, including all those named in the Levelling Up White Paper.

“The Chancellor has also made an important announcement on trailblazer status for the West Midlands and Greater Manchester Combined Authorities, including devolution of further pots of funding. It is important that county areas have access to the same level of powers and freedoms, and we urge the government to now set out a firm timetable on today’s ambition of single multi-year funding settlements and further powers for other ‘Level 3’ areas too, so that they can maximise their potential and deliver growth.

“Wider announcements to support economic growth, such as policies to incentivise people to re-join the labour market are also important with our recent research showing that 100,000 people have taken early retirement in county areas since the start of the pandemic. The extension of free childcare and funding allocated is welcome and will help encourage more parents of young children back to work, but it is important that government works closely with local authorities to ensure the new entitlement does not destabilise the market or affect childcare sufficiency, particularly in rural areas.”

Cllr Sam Chapman-Allen, chairman of the District Councils Network

“Many of the Chancellor’s measures offer the potential to help councils to drive growth in their communities, but in much of England this will only happen if the Government embraces the unique power of district councils – as the most local principal tier of local government – to deliver prosperity and wellbeing.

“Devolution deals work best when district councils are full constituent members, and Local Enterprise Partnerships’ powers are best localised by placing them with the tier of local democracy which works closest with businesses and understands its local communities best.

“We remind Jeremy Hunt that multi-year financial settlements should not just be the preserve of Greater Manchester and the West Midlands – the universal services provided by district councils, which have a huge impact on health and wellbeing, are reeling from financial uncertainty and could be better supported with similar financial stability.

“District councils – as the housing and homelessness prevention authorities – are working flat-out to help those most feeling the pinch from the rising cost of living. We therefore welcome the news that the Government is extending support on energy bills for an additional three months.”

Victoria Hills, Chief Executive of the Royal Town Planning Institute

“There is much in this budget that will allow planners to have a direct impact on the growth the Chancellor is seeking. It provides the opportunity for plan-led solutions beneficial for the environment, economy and regeneration.

“Consultations on nutrient neutrality, announced today could offer planning authorities a locally-led approach to tackling an issue that has delayed housebuilding across the country. We have been calling for a resolution to this problem, and these consultations make it clear that Government is taking steps towards a sensible solution.

“Decisions to provide Mayors in Manchester and Birmingham with greater control over multi-year funding and policy priorities like housing and transport will open the door for more strategic planning from our members. By working collaboratively, planners can help deliver well-designed, sustainably developed places for communities to thrive.

“When Investment Zones were first announced last year, we warned that they would only succeed if they came with local consent. New Investment Zones announced today reflect these concerns and do more to help local leaders use existing planning levers to stimulate growth through the planning system.

“It remains the case that without the increased resourcing for planning services, long called for by the RTPI, the system will still struggle to deliver all it can. The Government’s proposed planning fees increase remains an important opportunity to alleviate the pressure placed on England’s planning services and we’ll be responding to that consultation shortly.”

Steve Crocker, President of the Association of Directors of Children’s Services

“The greatest opportunity to make a tangible difference to a child’s life is when they are very young and today’s Budget announcement provides some welcome extra funding to support childcare providers. Access to high quality, affordable childcare can give children a better start in life and plays a crucial role in Levelling Up outcomes for children. The announcement to increase the staff to child ratio for two year olds in group setting must be accompanied by appropriate investment in the workforce to ensure that increased ratios continue to provide young children with the nurturing relationships and stimulating environments needed in early years settings.

“The extension of the 30 hours ‘free’ childcare offer will mean more children and families can benefit from this policy, but government must ensure the hourly funding rate for providers significantly increases so it is closer to the actual costs of delivery. Under the current system funding is insufficient and many of the most disadvantaged households are not eligible for support. The shortfall in costs means some providers have had to close or pass costs onto families. Reducing the income threshold would helpfully narrow the policy to focus on the most disadvantaged children and families and the funding saved could be reinvested to help the early years sector recruit, and retain, the high-quality workforce they desperately need.

“The additional funding for care leavers is welcome as is more support to help young people with SEND into employment. Initiatives like Staying Close help to equip young people leaving care with the skills needed to live alone and navigate adulthood, such as how to cook, budget and access support. We are pleased the Chancellor used his Budget to expand the Staying Close Programme and provide additional support for foster carers who make a huge difference to the lives of children in care. We hope this will encourage more people who believe they have the right skills to foster to come forward so all of those children who need a foster placement find one.

“The additional support for households with their energy bills is good news and provides much-needed help for families. However, it remains uncertain what support will be available beyond June, when the Energy Price Guarantee is set to end. The rising cost of living is placing enormous pressure on households and will trap and pull more children and families into poverty. We urgently need a cross party, cross departmental strategy to reduce and ultimately end child poverty that extends beyond a single parliamentary term. If we do nothing we will look back in shame.”

Chris Norris, Policy Director for the National Residential Landlords Association

“The Chancellor spoke of growth yet did nothing to introduce the pro-growth measures that are necessary if the private rented sector’s supply crisis is to be addressed.

“The current system, under which landlords are penalised for providing new homes to rent, only makes it tougher for many renters to access good quality rental properties. Without a comprehensive review of how the sector is taxed, supply and demand issues will only become more acute as time goes on.”