The Goverment’s Spending Review: the other details

In the third and last blog post on the recent the Government’s Spending Review; I thought I would cover the other subjects and a general round-up on the review. Sorry in advance, it is a long post.

It has been clear in the review; the Government is continuing to wage its war against local authorities. One of the targets is the assets owned by local authorities and wants to further encourage local authorities to release surplus assets.

In Cornwall we are already going to a large-scale office rationalisation programme and have halved our building assets from 180-odd to 93. This will be scaled down further to around 50 buildings/offices.

The review gives details on updating the Transparency Code which will require all local authorities to record details of their land and property assets in a consistent way on the government’s electronic Property Information Management System (e-PIMS). It will also extend the One Public Estate with £31m funding to support local authorities to work with other local public sector property owners and design more efficient asset management strategies. Again, like the office rationalisation, we in Cornwall are doing this with partners such as health.

Local authority salaries will be targeted with a new guidance to local authorities to encourage them to reign in excessive salaries and do more to drive efficiencies for local taxpayers. Though what is deemed excessive is yet to be clarified. We all want value for money on how our taxes are spent, but why only target local authorities? Why not include Health too? I know nationally there are some eye-watering salaries for health execs.

The Government will also review sickness absence in public sector workforces and will not rule out legislation where necessary.

The Spending Review will strengthen the existing legislation around ‘Right to Contest’ to allow local communities to challenge the use of land and property that is in use by local authorities. In another ‘Right to’ the Government will launch a pilot scheme with five Housing Associations which will inform the final design of the extended Right to Buy programme.

On the subject of land, a cornerstone of the review was the areas of housing and local development. The housing budget will be doubled to £2bn per year from 2018-19 to make house building a priority, with more than 400,000 “affordable homes” to be built-in England.

How those homes will be built will no-doubt be made easier with the Government bringing forward further reforms to the planning system, including establishing a new delivery test on local authorities that will ensure delivery against the number of homes set out in local plans. In other words, planning will be made easier for development. The Government recognises the key role that local authorities can play by selling land for housing, and will set the contribution local authority land disposal can make by the Budget.

Though on the other hand, the Government wants to protect England’s countryside through the Common Agricultural Policy by assigning it £3bn. There will be protection of over £350m funding for public forests, National Parks and Areas of Outstanding Natural Beauty over the Spending Review period. Though, wanting to build more houses, but at the same time protect the countryside and AONB’s does seem at odds with each other.

Second homes and Buy to Let homes will be having a new Stamp Duty surcharge of 3%. It is expected that this will raise £3bn over four years. However, how will the Government know if it is a second home? I mean a purchaser cold say I am buying another house to move into, but then don’t. Will there be some time period where the Government could retrospectively demand the 3%

Though the government will use some of the additional tax collected from the Stamp Duty surcharge to provide £60m for communities in England where the impact of second homes is particularly acute, such as Cornwall. No details on how this will work.

After an effective campaign which highlighted the folly of the new police funding formula, the Police budget has been protected in real terms over the Spending Review period (£900m in cash terms by 2019/20). Council Tax precepts for the Police service will be allowed to rise by up to 2% or £5, whichever is higher.

Beefing up the role of the Police and Crime Commissioners (PCC) has been rumoured for sometime. The review will bring forward legislation to enable PCC’s to take on responsibility for fire and rescue services, subject to a clear business case, which the local fire service will have to provide. For the transfer of responsibilities it would need local support.

However, it is not clear what local support means, but as Cornwall Fire and Rescue Service is part of Cornwall Council I guess it would require the Council to say yes before anything could happen. We all know how the Government is a deft hand at changing legislation if something gets in the way of their plans, so I would not be surprised if councils were made to transfer the service.

Furthermore, a new statutory duty will be introduced for the emergency services to collaborate by early 2017 – subject to parliamentary approval – on areas such as procurement, new stations and vehicle maintenance.

In the review there will be at least £74m of funding for the Emergency Services Mobile Communications Programme. This will help fire and rescue services benefit from the latest mobile digital technology.

Tourism gets a boosts by the creating a new £40m Discover England Fund to boost tourism across England.

The Government will spend over £150m to keep South West Water household customers’ bills £50 lower for the rest of this Parliament, in recognition of the higher water costs faced by consumers in the South West. This will help 750,000 households.

It is good to see some Cornwall persific items in the Spending Review, with:

  • The extension of the Cornwall & Isles of Scilly Enterprise Zone will bring new investment opportunities and retention of further Business Rates growth;
  • An improved transport link to the South West with the government funding new air routes from Newquay to Leeds Bradford (more details to follow);
  • Commitment to fully fund the Roads Investment Strategy; Highways England will deliver 112 major schemes including the dualling of the A30 Carland Cross to Chiverton Cross.
  • Projects such as the A391 in Cornwall will be able to bid for funding from the £475m Local Majors Fund.
  • Network Rail’s programme of investment will fund the re-signalling programme for Cornwall.

In conclusion, much of the headlines have been around the Welfare Reforms and the U-turn on Tax Credits. The have also been headlines on the ‘end of austerity.’ In fact the spin has hidden the facts that Cornwall Council still has to deal with 30% cuts in its budget.

How this review will affect Cornwall Council is hard to tell at the moment, as the devil is in the details, and that detail will not be released to local authorities till the end of December or early January.

This is not the end of austerity, austerity is still here alive and kicking for councils, who as we all know, deliver so many essential services.

In case you missed the other two blog on the Spending Review, they are here: Education and Precept/business rates.


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