?If you were listening to the budget today you’d be forgiven for thinking that George Osborne was living in a world of sunlit uplands. The Chancellor brushed over the key economic figures showing that growth has slowed and unemployment is rising higher than predicted (apparently due to the harsh winter), instead setting out measures for growth over the long term. He probably did enough to guarantee good headlines tomorrow, certainly the immediate cut in fuel duty will be popular but what does it mean for local authorities?
To start there was no reversal of the unprecedented cuts to their budgets this year and in the years to come. And for charities, there was yet more disappointment that the ‘transition’ fund to help charitable organisations facing severe cuts, has not been extended.
There was good news for some councils. Twenty one areas will have a new Enterprise Zone. Birmingham and Solihull; Leeds City Region; Sheffield City Region; Liverpool City Region; Greater Manchester; West of England; Tees Valley; North Eastern; the Black Country; and Derby, Derbyshire, Nottingham and Nottinghamshire, will want to make the most of the EZ status. 10 more areas, picked from those that have Local Enterprise Partnerships established, will be granted the special status in the Summer.
To achieve this many councils will have to gear up to participate in a somewhat patronising beauty parade in order to win the government’s favour. This is hardly the new relationship we want to see between central and local government. Many in local government will ask why should only a few areas have the freedoms and benefits of Enterprise Zone status while the majority lose out? I will be keen to find out the criteria for choosing the areas named today, and those to be named in the Summer.
On the positive side, for those areas that do have Enterprise Zone status there are very substantial benefits. These will include a 100% business rate discount for new businesses; local authorities will receive all business rates growth within the zone for a period of at least 25 years; there will be radically simplified planning approaches; and the government will support the roll out of superfast broadband. The government is also looking at further benefits including enhanced capital allowances; the use of Tax Incremental Finance; and extra help from UK Trade and Investment on inward investment and trade opportunities.
All local authorities were told by the Chancellor to prioritise growth. To support this he emphasised a new presumption in the planning system to approve new developments. Help for first time buyers and other housing market measures will be welcome. As will measures to support small businesses, including rate relief, new export credits, and income tax relief on enterprise investment.
There were welcome announcements too on apprenticeships and work experience opportunities. Investment in new centres for innovation at nine universities will provide a welcome boost for these council areas. Other nods to local government included the already announced £100 million for potholes, and the deal between central and local government to prevent council tax rises. Don’t get me wrong, local government will take any extra resources it gets, but these populist bungs reinforce a narrow view of what local government is about, and its future. Where for example was the commitment to new approaches, such as community budgets? The Chancellor did reference the Local Government Resources Review, but he gave nothing away.
It will take some days and weeks to pick over the details of the budget and see the full picture. In the meantime, whilst some local communities were clearly given a boost today, the majority will feel little effected. The course of the next four years has already been set and there was little today to alter it. The Chancellor has embarked on a massive real time experiment with the economy with the assumption that cutting the deficit so fast will encourage growth and not dampen it. We know that will hurt but we won’t know for years if it will work.
This article was first published on the Guardian website