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The Budget 2014: by practice area

Local Government Lawyer identifies some of the key policies contained in the 2014 Budget and affecting local authorities.

Housing, property, projects and regeneration

  • Help to Buy equity loan scheme: This scheme will be extended to March 2020 “to help a further 120,000 households to buy a new-build home”.
  • Ebbsfleet Garden City: The Government will form an Urban Development Corporation, in consultation with local MPs, councils and residents, to deliver a new garden city at Ebbsfleet.
  • Barking Riverside: The government will work with the Greater London Authority (GLA) to develop proposals for extending the Gospel Oak to Barking line to Barking Riverside “to unlock up to 11,000 new homes”.
  • Brent Cross regeneration scheme: The Government will work with the London Borough of Barnet and the GLA to look at proposals for the Brent Cross regeneration scheme, “subject to value for money and affordability”.
  • Greater Cambridge: The Government has confirmed a Gain Share deal with Greater Cambridge, providing £100m over five years (2015-16 to 2019-20) to fund local infrastructure. “This agreement could be worth up to £500m over 15-20 years, dependent on the economic impact of their investments.”
  • Glasgow City Deal: The Government is now engaged in detailed discussion with Glasgow to develop a City Deal “that will drive employment and economic development across the city region”.
  • Estate regeneration: The Government will introduce a £150m fund “to kick start regeneration of social housing estates”.
  • Builders’ Finance Fund: To support SME access to finance, the Government will create a £500m Builders’ Finance Fund, “which will provide loans to developers to unlock 15,000 housing units stalled due to difficulty in accessing finance”.
  • Custom build: The Government will consult on a new ‘Right to Build’ giving custom builders a right to a plot from councils and test the operation of this approach with vanguard local authorities. The Government will also create a £150m repayable loan scheme to provide up to 10,000 serviced plots, and will look to extend the Help to Buy: equity loan scheme to cover custom build.
  • Strategic Land and Property Review: The Government Property Unit has concluded its Strategic Land and Property Review which had identified scope to release £5bn from government land and property, “creating opportunities for housing and economic development”.
  • Zero carbon homes: The Government will shortly publish its response to its consultation in 2013.
  • Right to Move: The Government will shortly consult on the design of a priority ‘Right to Move’ for social tenants “to increase their mobility for work-related reasons”. Options would include “giving such tenants priority when a new social home becomes available, and setting aside a pool of vacant lets to enable them to move across local authority boundaries”.
  • Development benefits: The Government will launch a government-funded staged pilot for passing a share of the benefits of development directly to individual households, including further research and evaluation of the approach.
  • Garden City prospectus: The Government will publish a prospectus by Easter 2014 setting out how interested local authorities could develop their own, locally-led proposals for bringing forward new garden cities.
  • Public Works Loan Board (PWLB) limit: The Government will take the legal powers needed to increase the current PWLB lending limit of £70bn to up to £95bn in future to enable local authorities to continue to borrow from the PWLB.
  • Government Property Unit: The Government Property Unit will increase its work with local areas on better use of public sector assets, linking in with Growth Deals and building on the Strategic Land and Property Review. “As with the One Public Estate pilots already taking place, this work will focus on opportunities for cross public sector working, efficiency and growth.”

Planning, environment, highways, business rates

  • Flood defences: The Government will increase funding by £140m over 2014-15 and 2015-16 to repair and maintain flood defences.
  • Potholes challenge fund: The Government will provide an additional £200m in 2014-15 to set up a potholes challenge fund to increase further the amount local authorities spend on maintaining the local road network. This will include an allocation to devolved administrations.
  • Commercial permitted development and retail: The Government’s review of the General Permitted Development Order will include consultation on creating a much wider ‘retail’ use class, excluding betting shops and payday loan shops. The refreshed approach is based on a three-tier system to decide the appropriate level of permission, using permitted development rights for small-scale changes, prior approval rights for development requiring consideration of specific issues, and planning permission for the largest scale development. “As part of this, the Government will consult on specific change of use measures, including greater flexibilities for change to residential use, for example from warehouses and light industry structures, and allowing businesses greater flexibilities to expand facilities such as car parks and loading bays within existing boundaries, where there is little impact on local communities.”
  • Change of use (planning): The Government has made changes to the General Permitted Development Order to allow more flexibility between use classes. It will consult on further changes to allow more commercial uses, such as warehouses, light industrial or certain sui generis buildings, to become homes.
  • Judicial Review reform: The government, “working closely with the judiciary”, will launch a new Planning Court on 6 April 2014 to fast-track disputes, including big construction projects.
  • Nationally Significant Infrastructure Planning Regime Review: The Government “is committed to making the planning system work for major infrastructure projects” and will shortly publish the outcomes of its consultation on the Nationally Significant Infrastructure Planning Regime, including a series of measures to streamline and improve the process.
  • Enterprise Zones: Availability of business rate discounts and Enhanced Capital Allowances will each be extended by three years as an incentive for new and expanding businesses to locate in Enterprise Zones.
  • Landfill tax rates: The standard and lower rates of landfill tax will increase in line with the RPI, rounded to the nearest 5 pence, from 1 April 2015. Following industry engagement to address compliance, the Government will introduce a loss on ignition testing regime on fines (residual waste from waste processing) from waste transfer stations by April 2015. Only fines below a 10% threshold would be considered eligible for the lower rate. Full proposals will be set out in a consultation document later in 2014. The Government “intends to provide further longer term certainty about the future level of landfill tax rates once the consultation process on testing regime has concluded, but in the mean time is committed to ensuring that the rates are not eroded in real terms”.
  • Landfill communities fund: The value of the landfill communities fund for 2014-15 will be reduced to £71m. As a result, the cap on contributions by landfill operators will be amended to 5.1%. “This reduction takes account of progress that environmental bodies have made to address the Government’s challenge to reduce unspent funds.” The saving will be used to fund an equivalent one-off increase to address waste crime. The Government intends that environmental bodies’ performance against the challenge is published once the final information is available later this year.

Adult and children’s services

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  • Troubled Families programme: The Government will roll-out Phase 2 of the Troubled Families programme in 2014-15, “providing support for up to 40,000 families with multiple and costly problems”.


  • Alcohol duty rates: From 24 March 2014, the duty rate on general beer will be reduced by 2%. The duty rate on low strength beer will be reduced by 6% and the total duty rate on high strength beer will be reduced by 0.75%. The duty rates on spirits and most ciders will be frozen in cash terms this year. The duty rates on wine and high strength sparkling cider will increase by RPI.
  • Alcohol fraud: As announced at Autumn Statement 2013, the Government will introduce new measures to reduce the illicit trade in alcohol products, including a registration scheme for alcohol wholesalers that will start to take effect in 2016 and a requirement for traders to take reasonable steps to ensure their customers are legitimate to take effect later in 2014.
  • Machine games duty: Alongside the work already underway by the Department of Culture, Media and Sport to consider the regulatory treatment of B2 gaming machines which will report before Easter, the Government will create a higher rate of machine games duty at 25% for gaming machines where the charge payable for playing can exceed £5. This change will take effect from 1 March 2015.


  • Pay awards: Pay awards for most public sector workers covered by the recent Pay Review Body recommendations will be limited to 1% in 2014/15, and the intention is to limit awards to 1% in 2015/16.
  • Public service pensions: The Government will introduce new employer contribution rates for the Principal Civil Service Pension Scheme, the NHS Pension Scheme (E&W), the Police Pension Scheme (E&W) applying from 1 April 2015 and for the Teachers Pension Scheme (E&W) applying from 1 September 2015.


  • New efficiency programme: The Chief Secretary to the Treasury has asked the Minister for the Cabinet Office to set out an “ambitious” new efficiency programme to deliver savings from 2016-17 and across the next Parliament, in time for Autumn Statement 2014.
  • Wales: The Government will shortly take forward a Wales Bill that will devolve new tax and borrowing powers to Wales, “enabling the Welsh government to raise more of the money it spends and providing it with further tools to support growth in the Welsh economy”. In advance of implementing these new powers, the Government has also agreed that the Welsh government can use existing borrowing powers to begin investing in improvements to the M4.
  • Social investment tax relief: The Government will set the rate of income tax relief for the social investment tax relief at 30% from 6 April 2014. Eligible organisations will be able to receive up to €344,827 of tax-advantaged investment over three years under the scheme.
  • Magna Carta anniversary: The Government will contribute £1m towards the commemoration events for the 800th anniversary of the Magna Carta.

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