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Budget key points for local government and the public sector

March 24, 2010

Public borrowing and Growth

• Following higher than predicted tax receipts, public sector net borrowing in 2009-10 is now projected to be £11 billion lower than forecast in the 2009 Pre- Budget Report to £167bn.

• Budget 2010 announces that £10.8 billion of efficiencies had been delivered by autumn 2009.

Key Highlights: Local Government and Public Sector

• The Government will work with local areas to run 11 Total Capital Asset Pathfinders, which will aim to improve the value of capital investments, help transform services and deliver better outcomes

• The role of city regions in delivering growth and inclusion will be strengthened, and provide new flexibility for places to shape spending, including on skills. Newly empowered regional ministers will play a stronger role in regional planning and the allocation of funds to regions and city-regions

• Regional Development Agencies, Homes and Communities Agency and Government Offices will be co-located

• The Government will give local authorities new discretion over £1.3 billion of funding that is currently ring-fenced and reduce the number of funding streams from central to local government from 110 to 94. Alongside this the Government has reduced the set of indicators for local authorities by 18

• a £120 million grant for Accelerated Development Zones

• a £100 million fund to repair local roads following recent cold weather; and investing £250 million in the road network to improve capacity

• the NHS will deliver annual efficiency savings of £15 to 20 billion by 2013-14

• ‘tough choices’ on public sector pay and the reform of public sector pensions

• £11 billion of efficiencies and other cross-cutting savings through streamlining government

• The government has accepted the results of the Senior Salaries Review Body (SSRB) review of senior pay in the public sector, including committing to a new Code of Practice on senior pay setting.

• publishing Ending Child Poverty; Mapping the Route to 2020 alongside Budget 2010, setting out ways that child poverty could be reduced in line with the 2020 target.

• a temporary increase in the level of small business rate relief for half a million businesses

Key Highlights: General

• introduce a new right to open a basic bank account

• publishing a Strategy for national infrastructure, including plans to create a Green Investment Bank and additional funding for transport

• extending the Young Person’s Guarantee after March 2011 to ensure that young people adversely affected by the recession continue to be guaranteed a Future Jobs Fund job, training or work experience if they cannot find work within six months;

• a two-year stamp duty relief for first time buyers for property purchases up to £250,000 from alongside an additional 5 per cent rate of stamp duty for residential property purchase over £1 million from 2011-12.

• the creation of a Small Business Credit Adjudicator with statutory powers to enforce its judgements. The Adjudicator will work closely with an expanded Financial Intermediary Service to ensure that small businesses are treated fairly when applying for loans

• increase the contribution made by the banks to the community lending sector

• frontline resource spending in schools will rise by 0.7 per cent in real terms; resource spending for 16-19s participation will rise by 0.9 per cent in real terms; and resource spending on Sure Start Children’s Centres will rise in line with inflation.

• sufficient funding will be available to enable Police Authorities to maintain the current number of warranted Police Officers, Police Community Support Officers and other staff exercising police powers;

• improved targeting of housing growth and regeneration funding, saving £340 million: including £40 million by concluding the New Deal for Communities, and a further £300 million from rationalising Regional Development Agency regeneration spending and programmes, including the Working Neighbourhoods Fund, the Local Enterprise Growth Initiative, and the Housing and Planning Delivery Grant

• reducing unlawful occupation of social housing, saving at least £35 million in housing benefit costs; ending smaller Communities and Local Government (CLG) funded time-limited communities programmes, saving £25 million; and rationalising other smaller CLG programmes, saving a total of £160 million.

• Budget 2010 announces that the Government is taking action to tackle excessively high Local Housing Allowance payments for a small number of tenants in the most expensive areas, saving another £50 million a year by 2014-15.

LGiU member councils will receive an in-depth analysis of the Budget examining its impact on key policy areas for local government.

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