SpringBudget 2017 policy update
8 March 2017
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This briefing provides an initial overview of the main announcements made today by the Chancellor in his Budget speech. A further briefing exploring the financial implications in greater detail will be available later this week.
Social care and the NHS
- An additional £2 billion to councils over the next 3 years to spend on adult social care services. £1 billion of this will be provided in 2017-18.
- The government will set out proposals to achieve a fair and more sustainable basis for adult social care in a green paper to put the system on a more secure and sustainable long term footing.
- An additional £100 million to the NHS in 201718 for capital investment in A&E departments.
- £325 million will be invested in a first set of the best local Sustainability and Transformation Plans (STPs).
- Business rate revaluation process will be reformed ‘making it smoother and more frequent’. A preferred approach will be announced at the Autumn Budget 2017 with consultation ahead of the next revaluation in2022.
- £435mof further support for businesses facing significant increases in bills including:
£300mof discretionary relief for councils, to allow them to provide support to individual hard cases in their local area.
£1,000 business rate discount for pubswith a rateable value of up to £100,000, for one year from 1 April 2017.
- Local government will be fully compensated for the loss of income as a result of these measures.
- The Government will consult on proposals to redesign rent-a-room relief, to ensure it is better targeted to support longer-term lettings.
- New T-levels for 16 to 19 year old technical students will be introduced from autumn 2019. Students will be able to choose from 15 different routes such as construction, digital or agriculture.
- The government will increase the number of programme hours of training for 16-19 year olds on technical routes by more than 50%, including the completion of a high quality industry work placement during the programme.
- Further Education maintenance loans to encourage students to continue their training at high quality institutions such as National Colleges or Institutes of Technology.
- £40mspending by 2018-19 to test different approaches to help people to retrain and upskill throughout their working lives.
- £5m funding for return to work support to help people who have taken lengthy career breaks achieve a clear route back to employment.
- £90m to provide 1,000 new PhD places, including in science, technology, engineering and maths.
- £210m to create new fellowships to conduct research in areas such as bioscience and biotechnology, quantum technologies, and satellite and space technology.
- £320mextension of the free schools.programme to help fund up to 140 schools, including independent-led, faith, selective, university-led and specialist maths schools.
- £216minvestment in school maintenance.
- Free school transport to attend the nearest selective school for 11 to 16 year olds in receipt of free school meals or whose parents claim Maximum Working Tax Credit.
- Schools White Paper to be published.
- AMemorandum of Understanding on further devolution to London covering joint working to explore opportunities around locally-delivered criminal justice services; action to tackle congestion; a taskforce to explore piloting a new approach to funding infrastructure; greater powers and flexibilities over the administration of business rates; greater local influence over careers services, employment support services and the apprenticeship levy. A second Memorandum of Understanding on Health and Social Care is also planned.
- The government is in discussions with Greater Manchester on future transport funding.
- An additional £20mover the Parliament to support organisations working to combat domestic violence and abuse, and to support victims.
- The government will investigate ways to protect consumers from unnecessary costs and inefficiencies, including:
making terms & conditions simpler and clearer including in digital contracts, like when you sign up to a social network.
fining companies that mislead or mistreat consumers.
Transportation
- £690mcompetitive fund for new local transport projects, to improve congestion on roads and public transport.
- £220mto improve congestion points on national roads, with £90mgoing to the North and £23mto the Midlands.
- 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.
- The government will legislate to set new statutory packaging recycling targets for 2018 to 2020.
- Tax-Free Childcarewill provide up to £2,000 a year in childcare support for each child under 12.
- Working parents in England will also be able to apply for an additional 15 hours of free childcare for three and four year olds, bringing the total to 30 hours a week.
Further information
Further information is available on the following web page:
- National Policy website page
HM Treasury: Budget document in full
Spring Budget 2017: Philip Hammond's speech
Spring Budget 2017: tax-related documents
LGA reaction
Memorandum of Understanding on further devolution to London
State of the economy
- UK second-fastest growing economy in the G7 in 2016
- Growth forecast for 2017 upgraded from 1.4% to 2%
- But GDP downgraded to 1.6%, 1.7%, 1.9% in subsequent years, then 2% in 2021-22
- Inflation forecast to rise to 2.4% in 2017-18 before falling to 2.3% and 2.0% in subsequent years
- A further 650,000 people expected to be in employment by 2021
- Annual borrowing £51.7bn in 2016-17, £16.4bn lower than forecast
- Borrowing forecast to total £58.3bn in 2017-18, £40.8bn in 2018-19, £21.4bn in 2019-20 and £20.6bn in 2020-21
- Public sector net borrowing forecast to fall from 3.8% of GDP last year to 2.6% this year, then 2.9%, 1.9%, 1% and 0.9% in subsequent years, reaching 0.7% in 2021-22. But borrowing still predicted to be £100bn higher by 2020 than forecast in March 2016
- Debt rose to 86.6% this year, but will fall to 79.8% in 2021-22.
- The government will consult on how the tax system could be made fairer and more coherent, including by looking at the taxation of benefits in kind and employee expenses.
- Changes to national insurance for the self employed - Class 2NICsto be abolished and Class 4NICswill rise to 10% in April 2018 and to 11% in April 2019.
- Only a self-employed person with profits over £16,250 will have to pay more as a result of these changes.
- Commitment to increase tax thresholds to £12,500 and £50,000 by end of Parliament.
- From 13 March 2017, the duty rates on beer, cider, wine and spirits will increase by RPI inflation.
- Duty rates on all tobacco productswill increase by 2% above RPI inflation from 8 March 2017.
- From 1April 2017 theVATregistration threshold will increase from £83,000 to £85,000 and the deregistration threshold from £81,000 to £83,000.
- Soft drinks levy will be imposed at 18p and 24p for the main and higher bands.
- Increase to the standard rate of Insurance Premium Tax to 12% from 1 June 2017.
- Vehicle Excise Duty (VED) – From 1 April 2017,VEDrates for cars, vans and motorcycles registered before April 2017 will increase by Retail Prices Index.
- A three-year NS&I Investment Bond with a market-leading interest rate of 2.2% will be available for 12 months from April 2017.
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