CHANCELLOR’S BUDGET 2018 – Local Impact

The full Budget document is available on the Government’s website at this link:

However, in summary:

  1. Economic Indicators

    1. The economy has performed more strongly than expected and as a result a number of one-off funding plans were announced. However, these are all dependent on the deal that is achieved for Brexit, so the Chancellor explained many times that these plans may change!
    2. The Government has reported that it remains on track to meet three of its four fiscal objectives:
      • Bringing the structural deficit below 2%.
      • Ensuring debt falls as a percentage of GDP.
      • Keeping welfare spending below its cash limit.
    3. Inflation – the Office of Budget Responsibility forecasts CPI inflation to be 2.6% in 2018 but will then fall again to around 2.0% for the rest of the forecast period. 9The Consumer Price Index (CPI) is the weighted average of prices of a basket of consumer goods and services)
    4. Forecasts for borrowing are to be £11.6bn lower in 2018/19 than was previously forecast at the Spring Statement. That is equivalent to 1.2% of GDP.
  2. Local spending – what will the Council have?

    1. For the next Spending Review period of five years there will be an average real terms increase in annual Resource Departmental Expenditure Limits (RDEL) of 1.2%, per annum. This compares to an average of minus 3.0% during the period of the Spending Review 2010 and minus 1.3% during the period of Spending Review 2015
  3. Social Care

    1. A further £240m was announced for 2019/20, which is on top of the £240m announced for 2018/19 last month, it is not yet confirmed how much RBKC will receive.
    2. An additional £410m was announced for 2019/20 to be spent on children’s and adults social care. Although any conditions are not yet known it stipulates that Local Authorities should use the funding to ensure additional demand on the NHS is not created.
    3. Across the country an additional £55m of funding for the Disabilities Facilities Grant in 2018/19 to support adaptations in homes.
  4. Business Rates

    1. For two years, up until the next Revaluation in 2021, all retail premises with a rateable value below £51,000 will have their bills reduced by one third. This new relief is expected to cost £490m in 2019/20 and £450m in 2020/21. This will bring less money to the Council, unless this is re-imbursed.
    2. An additional £675m fund to support future high streets and town centres, including £55m for heritage based regeneration.
    3. A 100% mandatory relief will be introduced for public lavatories.
  5. Housing and Planning

    1. New planning measures were announced to support high streets, including more flexibility for mixed use developments – ie both housing and commercial. A consultation is also planned to give additional freedoms to Local Authorities over the disposal of land.
    2. An extension of the stamp duty relief for first time buyers to shared ownership and properties up to the value of £500k.
    3. £663m was announced to fund strategic partnerships for nine housing association. It is not yet clear if our local Council will benefit.
    4. Community Infrastructure Levy – Government plans to simplify the system by removing restrictions on Section 106 funding.
    5. A register of empty properties will be trialled on selected Local Authorities – Kensington and Chelsea have previously written to Government to ask for increased powers here.
    6. Government has previously announced the removal of the HRA borrowing cap. Government is expecting Councils to build an additional 10,000 new homes.
  6. Health

    1. The NHS was identified as a top priority and the budget will increase in real terms by 2023/24 by £20.5bn.
    2. £250m of funding for mental health services was announced and a donation of £10m to support armed forces personnel with mental health needs.
    3. Government gave their commitments not to enter into any other PFI deals but also to establish a Centre for Excellence to manage existing projects. Kensinton and Chelsea fortunately did not sign up for PFI deals, but this has affected many other hospitals and important services.
  7. Taxation, Welfare and social services:

    1. Most people will pay less income tax from next April after the personal allowance and higher rate tax thresholds were both increased in the Budget – but higher earners will see part of the gain cancelled out by stealth rises to national insurance.
    2. From April 2019, the amount you can earn without paying any income tax – will be raised from £11,850 to £12,500.
    3. Overall the changes should mean an extra £155 a year in your pocket if you earn between £12,500 and £50,000, and an extra £566 if you earn between £50,000 and £100,000.
    4. Universal credits – announced £1bn of funding for an additional package of measures to aid the transition to the new system over the next five years.
    5. The national Living Wage will increase from £7.83 to £8.21 from April 2019 an increase of 4.9%. The London Living Wage is currently £10.20 per hour.
  8. Infrastructure

    1. An additional £420m was announced for 2018/19 to tackle pot holes, repairs to damaged roads and maintaining bridges.
    2. An announcement on Crossrail 2 is expected as part of next year’s Spending Review based on recommendations of the Independent Affordability Review.
    3. An additional £5m has been announced for the Westminster Ceremonial Streetscape Project which improves security and traffic flow.
  9. Education and Skills

    1. An additional £400m of capital funding was announced for this financial year for equipment and facilities in schools. This equates to approximately £10,000 for the average primary school and £50,000 for the average secondary school.
    2. An additional £450m to support apprenticeships training and £140m to halve the levy for smaller employers.
    3. An additional £28m of capital funding to support T Levels (Technical levels) in 2020.
    4. An additional £100m for the National Retraining Scheme to provide new career guidance and work opportunities.
    5. £200m to fund activities for 10 – 14 year olds working with those at risk of youth violence.
October 31st, 2018

Photo Diary

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Vulnerable people falling through the gap of the Covid-19 safety net

The new Government designation for “vulnerable”, has proved contentious, separating as it does those who can access additional help, quieter shopping times, and food or medicine deliveries from those who cannot.

I am calling on the Government to include in it carers and families with SEND (Special Educational Needs and Disabilities) and those with hidden disabilities. We have been promised parity for those with mental health conditions, but there is no evidence of this in the current Government list of those deemed “vulnerable”.

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Listen to it here.

Now also available on PodBean and Apple Podcasts

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If you haven’t completed my survey yet, there’s still time to do so by clicking here.

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The Rt Hon Theresa May MP, Prime Minister
The Sunday Times
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