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Spring Budget 2017: key policy decisions

Local Government Lawyer sets out a number of the key policy decisions contained in the Chancellor of the Exchequer’s Spring Budget 2017 and affecting the sector.

Source: Spring Budget 2017, published by HM Treasury.

Governance and devolution

  • Future announcements – the government will shortly be announcing the Midlands Engine Strategy, and is continuing to build the Northern Powerhouse.
  • Devolution: London – the government has agreed a Memorandum of Understanding on further devolution to London. The agreement with the Greater London Authority (GLA) and London Councils includes joint working to explore the benefits of, and scope for, locally-delivered criminal justice services; action to tackle congestion; and a taskforce to explore piloting a new approach to funding infrastructure. The agreement also commits to explore options for devolving greater powers and flexibilities over the administration of business rates and greater local influence over careers services and employment support services, as well as working with the GLA and London Councils to ensure that employers can take advantage of the opportunities offered by the apprenticeship levy. The government and London partners will agree a second Memorandum of Understanding on Health and Social Care.
  • Devolution: Manchester – the government is in discussions with Greater Manchester on future transport funding. 
  • City deals in Scotland and Wales – The government “continues to make good progress” towards city deals for Edinburgh and Swansea and is working  with local partners and the Scottish and Welsh Governments respectively to achieve this. The government has also opened negotiations for a city deal for Stirling and will consider proposals as they are brought forward for a Tay Cities Deal and a North Wales Growth Deal.

Social care and the NHS

  • Social care: medium term – the government will provide an additional £2bn to councils in England over the next three years to spend on adult social care services. £1bn of this will be provided in 2017-18, “ensuring councils can take immediate action to fund care packages for more people, support social care providers, and relieve pressure on the NHS locally”. Councils will need to work with their NHS colleagues to consider how the funding can be best spent, and to ensure that best practice is implemented more consistently across the country. This funding will be supplemented with targeted measures to help ensure that those areas facing the greatest challenges make rapid improvement, particularly in reducing delayed transfers of care between NHS and social care services. "Overall, local government will be able to increase social care-specific resources in real terms in each of the remaining three years of the Parliament."
  • Social care: long term – the government is committed to establishing a fair and more sustainable basis for adult social care, in the face of future demographic challenges. Proposals will be set out in a green paper to put the system on a more secure and sustainable long term footing.
  • Accident & Emergency (A&E) capital investment – the government will provide an additional £100m to the NHS in England in 2017‑18 for capital investment in A&E departments. This will enable trusts to invest in measures to help manage demand on A&E services and ensure that patients are able to access the most appropriate care as quickly as possible.
  • Sustainability and Transformation Plans – the government recognises the progress that local NHS leaders have made, working collaboratively with partners, to develop local Sustainability and Transformation Plans. The government will invest £325m over the next three years to support the local proposals for capital investment where there is the strongest case to deliver real improvements for patients and to ensure a sustainable financial position for the health service. In the autumn, a further round of local proposals will be considered, "subject to the same rigorous value for money tests". Investment decisions will also consider whether the local NHS area is playing its part in raising proceeds from unused land, to reinvest in the health service.

Education: Schools

  • Schools investment – the government is committed to giving parents greater choice in finding a good school for their child, and will deliver the manifesto commitment to open 500 new free schools by 2020. The government will extend the free schools programme with investment of £320m in this Parliament to help fund up to 140 schools, including independent-led, faith, selective, university-led and specialist maths schools. Of these 140 schools, 30 will open by September 2020 and count towards the government’s existing commitment. The new free schools will be located where they are most needed to improve the choice of schools available to parents, following a rigorous assessment of local factors.
  • School maintenance – to improve the condition of the school estate, the Budget provides a further £216m investment in school maintenance.
  • School transport – the government is expanding the current ‘extended rights’ entitlement for children aged 11 to 16, who receive free school meals or whose parents claim Maximum Working Tax Credit. They will now get free transport to attend the nearest selective school in their area, bringing it in line with free transport provision for those travelling to their nearest school on faith or belief grounds.

Education: Skills

  • T-levels: 16-19 Technical education – the government will deliver the recommendations of Lord Sainsbury’s panel on technical education. The government will increase the number of programme hours of training for 16-19 year olds on technical routes by more than 50%, to over 900 hours a year on average, including the completion of a high quality industry work placement during the programme. To ensure the routes are well-designed and colleges properly prepared, they will be introduced from 2019-20, increasing funding in line with this roll out, with over £500m of additional funding invested per year once routes are fully implemented.
  • Further Education maintenance loans – the government’s aim is to encourage students to continue their training at high quality institutions such as National Colleges or Institutes of Technology. This will create real parity with the academic route and develop the higher-level skills employers demand. From 2019-20, the government will provide maintenance loans, like those available to university students, to students on technical education courses at levels 4 to 6 in National Colleges and Institutes of Technology. This will also support adults to retrain at these institutions.
  • Lifelong learning pilots – the government will spend up to £40m by 2018-19 to test different approaches to help people to retrain and upskill throughout their working lives.
  • Return to work support – the government will work with business groups and public sector organisations to identify how best to increase the number of returnships, supported by £5m of new funding.
  • Part-time maintenance loans – To promote equality with full-time undergraduate study and support lifelong learning, the government confirms the terms of maintenance loans for part-time undergraduates, previously announced at Spending Review 2015. These loans will become available for degree level study in 2018-19, with an extension to distance learning and sub-degree study in 2019-20.
  • Doctoral loans – The government confirms the terms of doctoral loans for 2018-19, previously announced at Budget 2016. These new loans will provide up to £25,000 for doctoral study and have the potential to reach a wider range of students and research than before. 

Business rates

  • Business rates – the business rates revaluation takes effect in England from April 2017. In addition to the £3.6bn transitional relief which was announced in November 2016, the government will provide £435m of further support for businesses facing significant increases in bills from the English business rates system. This includes: support for small businesses losing Small Business Rate Relief to limit increases in their bills to the greater of £600 or the real terms transitional relief cap for small businesses each year; and providing English local authorities with funding to support £300m of discretionary relief, to allow them to provide support to individual hard cases in their local area. The government will also introduce a £1,000 business rate discount for public houses with a rateable value of up to £100,000, subject to state aid limits for businesses with multiple properties, for one year from 1 April 2017. Local government is to be fully compensated for the loss of income as a result of these measures. 

Transport and infrastructure

  • Local transport – National Productivity Investment Fund (NPIF) allocations have already been made for 2017-18, supporting local projects like improvements in Blackpool town centre, improving the A483 corridor in Cheshire, major maintenance of the Leicester Outer Ring Road, and a new roundabout at Hales in Norfolk. £690m more will be competitively allocated to local authorities, with £490m made available by early autumn 2017. 
  • National road network – the government has completed a strategic study on relieving congestion in the south-west sections of the M25 and will now develop options ahead of the next Road Investment Strategy. There will be regional allocations of the £220m NPIF investment for pinch points on the strategic road network, with details of individual schemes to be announced by Department for Transport shortly. 
  • Digital infrastructure – the NPIF will invest £740m in digital infrastructure by 2020-21, to support the next generation of fast and reliable mobile and broadband communications for consumers and businesses. The government’s 5G Strategy sets out steps for the UK to become a world leader in the next wave of mobile technology and services.
  • Full-fibre broadband – starting in 2017, the government will invest £200m to fund a programme of local projects to test ways to accelerate market delivery of new full-fibre broadband networks. These will combine the following approaches: bringing together local public sector customers, to create enough broadband demand to reduce the financial risk of building new full-fibre networks; offering full-fibre broadband connection vouchers for businesses, to increase take-up of services where new networks are built through the programme; directly connecting public sector buildings, such as schools and hospitals; opening up public sector assets, such as existing ducts, to allow fibre to be laid more cheaply.
  • Digital Infrastructure Investment Fund – this fund will be launched in spring 2017. Government investment of £400m will be at least matched by private sector investors, and will accelerate the deployment of full-fibre networks by providing developers with greater access to commercial finance.

Regulatory

  • Consumers and markets green paper – The government will shortly bring forward a green paper to examine markets that are not working efficiently or fairly. There will be legislation at the earliest opportunity to allow consumer enforcement bodies, such as the Competition and Markets Authority, to ask the courts to order civil fines against companies that break consumer law. Proposals will be developed to protect consumers from facing unexpected payments when a subscription is renewed or when a free trial ends. Consideration will also be given to how to make terms and conditions clearer, simpler and shorter for consumers to engage with, building on a call for evidence on terms and conditions last year.
  • Air quality – the government will consult on a detailed draft plan in the spring which will set out how the UK’s air quality goals will be achieved.
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