Being one of those who had hoped to see a second fiscal stimulus that invested heavily in local government in particular and public services in general in an attempt to spend our way out of the current recession I have got to admit to being slightly underwhelmed by the Chancellors offering today.
However, having examined the detail it is fairly ob vious that with public borrowing reaching £175b this year and then slowly falling over the next four years to £97b his room for manoeuvrability was extremely limited. And indeed additional expenditure today may have resulted in much harsher cuts to public finances in coming years.
So what does it mean for local government overall. Well the overall increase in public sector efficiency savings next year to £15b equates to an increase of £600m for local government, this is a 12% rise from the target of £4.9b to £5.5. Whilst this will present challenges I suspect that local government may have been bracing itself for something worse. And with the final year of the 3 year grant settlement remaining unchanged and not up for renegotiation then financial Armageddon may have been avoided in the short term. However with economic circumstances creating a higher demand for public services during these tough times then perhaps the real strain could be somewhere just over the horizon.
Looking then to specific measures for local government, the £100m of funding for local authorities to invest in new environmentally friendly council housing is welcome, however the impact is likely to result in authorities building a couple of thousand units a year rather than the couple of hundred at present.
For the 1.8m people on council house waiting lists and hundreds of thousands more living in overcrowded conditions with friends and families this is hardly going to change the world for them. With the maximum mortgages available being 90% most are looking at a £15,000 deposit on an average house price and this is therefore way beyond their means. Perhaps Ministers will now fast track the review of the national housing revenue account system, which could really make a difference to local authority’s ability to supply new housing units at meaningful levels.
The Chancellor made some interesting noises about investing in green technology and perhaps this along with the energy saving schemes mentioned will encourage local authorities to really push the boat out on carbon reduction and give a lead to not only the public sector but the rest of the economy. For those authorities who have been plagued by abandoned cars and the problems of having to dispose of them, I am sure the £2,000 trade-in scrappage scheme announced will also be welcome.
Exciting times also for the North of England with the announcement that Leeds will join Manchester as the second city region pilot scheme.
Overall, for one of the most anticipated budgets in decades it all felt a bit subdued to me.