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November 2018
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2018 Budget: GPSJ readers send us their comments

Reporter: Stuart Littleford

Government & Public Sector Journal readers have sent us their comments on today’s budget:

Ben Jackson, CEO of early payment provider, Oxygen Finance, said:

“Today was a missed opportunity for the Chancellor to deliver on his Spring Statement pledge to stamp out late payment. All we’ve had since then is further consultation on the issue, but no decisive action.

“While further legislation isn’t the answer to this deep-rooted problem, there is a case for strengthening existing measures. In practice, this would mean immediate financial consequences for businesses who pay late. The existing rules see late payers merely reporting on the extent to which they pay late, with the onus on suppliers – who will be reluctant to bite the hand that feeds them – to trigger any financial penalty.

“Cashflow is the lifeblood of any business and without the certainty of regular, timely payments businesses cannot put their growth plans into action, which, at best, leaves them operating in a short-term fashion and at worst puts their very survival in jeopardy. While the Budget did include business-friendly measures, they mean very little when firms still aren’t being paid on time for the goods and services they provide.”

Responding to today’s Budget, Richard Murray, Director of Policy at The King’s Fund, said:

“The social care system cannot continue to get by on last-minute, piecemeal funding announcements. Adult social care in England needs at least £1.5 billion more per year simply to cope with demand meaning that the funding announced today, which will also need to cover children’s social care, falls far short. This highlights the need for a long-term plan for how social care will be funded and structured so that it can meet increasing demand. Successive Governments have dodged tough decisions on social care and the forthcoming Green Paper must now ensure social care gets the long-term plan it so desperately needs.

“Two billion pounds for mental health confirms the early signals that this would be a key priority for the forthcoming NHS long-term plan. But years of underfunding have taken their toll and this is no more than a small step on the road to parity of esteem. Mental health services need more than money to meet demand. A chronic shortage of mental health staff means that, despite the new funding, the service won’t improve until the Government and the NHS provide a plan to increase the workforce.”

Mayor of Greater Manchester, Andy Burnham told GPSJ:

“Today’s Budget had a number of welcome steps but Greater Manchester will need more from the Chancellor in the upcoming spending review if we are to face up to the big post-Brexit challenges.

“The skills funding package for Greater Manchester that’s been announced today is welcome but should only be another step on the journey towards full devolution of post-16 education.

“The nearly £70 million of additional investment in transport from the Transforming Cities Fund in 2022-23 is also positive but I know people in Greater Manchester wanted to hear more from the Chancellor on the chaos that’s affecting commuters and harming the Northern economy now.   Greater Manchester needs similar powers to London if we are to fix our roads and railways.  That’s why I’m calling on people across Greater Manchester to join our campaign to Take Control of our Transport at takecontrolofourtransport.co.uk.

“I also hope that the Government’s decision to refresh its Northern Powerhouse Strategy next year is a recognition of what Northern Leaders have been saying to Ministers over recent years.  The promises made to the North need to be delivered and the Northern Powerhouse urgently needs new momentum.

“On the vital issue of social care, any new funding for social care is welcome and critically needed, but the Chancellor’s announcement doesn’t address the scale of social care underfunding. Rather than sticking plasters, we need a long-term settlement for social care to ensure older and disabled people get the care they need.”

Glen Garrod, President of the Association of Directors of Adult Social Services (ADASS), said:

“It would seem that that era of austerity is indeed not at an end for older and disabled people.

“The detail in the Red Book reveals that the announced funding of £650 million for social care is in fact a core of £410 million which will need to be negotiated in local Councils between children and adult services – both of which are hard pressed. Whilst this additional funding is indeed positive, it is both inadequate and temporary. There is also £240m in 2019/20 to continue the winter pressures funding that supports the NHS.

“The detail in the budget creates an invidious situation affecting older and disabled people locally.  Their needs will be competing with those of different Council departments, projected overspends, dwindling or exhausted reserves, supporting NHS needs and the needs of children and young people.

“It is however, welcome, that more money for the Disabilities Funding Grant is available, which is £10 million more than the Chancellor announced in his speech. It is positive the Government is making  more money available for social care overall. We must have a long-term funding solutions for adult social care and the Government must bring these forward in the green paper urgently.”

Ben Jackson, CEO of early payment provider, Oxygen Finance, said:

“Today was a missed opportunity for the Chancellor to deliver on his Spring Statement pledge to stamp out late payment. All we’ve had since then is further consultation on the issue, but no decisive action.

“While further legislation isn’t the answer to this deep-rooted problem, there is a case for strengthening existing measures. In practice, this would mean immediate financial consequences for businesses who pay late. The existing rules see late payers merely reporting on the extent to which they pay late, with the onus on suppliers – who will be reluctant to bite the hand that feeds them – to trigger any financial penalty.

“Cashflow is the lifeblood of any business and without the certainty of regular, timely payments businesses cannot put their growth plans into action, which, at best, leaves them operating in a short-term fashion and at worst puts their very survival in jeopardy. While the Budget did include business-friendly measures, they mean very little when firms still aren’t being paid on time for the goods and services they provide.”

Peter Hogg, UK Cities Director, said:

“The Chancellor was keen to share the love around the UK in today’s budget. Whilst he may have come to bury one of his predecessor’s pet policy initiatives – austerity, he went out of his way to praise the other – devolution. No part of the Union was denied Mr Hammond’s generosity, with devo deals for Tayside, Belfast and Mid Wales, whilst Northern Powerhouse Rail, the Oxford-Cambridge rail link and the devolved authorities all got additional funding or extended funding windows. This, linked to pledges on the Transforming Cities Fund, Future Mobility Zones, infrastructure, health, schools and defence, adds up to a very regionally focused budget.

“This is good news for the UK’s overall competitiveness at a critical time and will helpfully encourage confidence and investability. It is also reassuring to see the Chancellor recognise the need to enable growth in our cities and the corridors that connect them. It is disappointing – if understandable – to see limited funding for London. The HIF funding (Housing Infrastructure Fund) of the DLR extension and inclusion of Lower Thames Crossing in the Roads Investment Strategy 2 settlement are welcome, but it feels like a missed opportunity to see nothing on Crossrail 2, The Bakerloo Line Extension or indeed the regeneration of Thames Gateway.” 

Simon Rawlinson, Head of Strategic Research and Insight, said:

“The end to the use of the PFI for social and economic infrastructure is good politics as no deal has been signed since 2016.  However, finding the finance to plug the gaps left by the EIB – which the budget does not address – along with public sector expertise to deliver publicly funded programmes, may prove to be longer-term liabilities. Meanwhile, given the raft of announcements in connection with future capital expenditure on housing, roads and the high street, the lack of an announcement on the progress of the construction sector deal points to the need for greater coordination between Government Departments.”

Will Waller, Head of Market Intelligence, said:

“Noticeable by its absence in Hammond’s speech was any mention of the ‘Help to Buy’ Equity Loan Scheme.  But the housebuilding community won’t be disappointed.  The red book heralds a new Help to Buy Equity Loan scheme that will run from April 2021 for 2 years to the tune of almost £9bn.  Even better, it also won’t be contingent on any site-specifics or new planning policy. This is a huge win for housebuilders in minimising uncertainty, particularly crucial as an average of 40% of revenue of the top ten house builders is supported by the scheme and it has played a huge part in driving profitability in an increasingly challenging market.  Equally, it will allow more first time buyers to get on the ladder. That said, whilst this policy will provide renewed comfort and opportunity, the red book makes it clear that March 2023 will be the definite end to the scheme.  The big house builders will need to invest  in evolving business and delivery models.”

Natalie Sauber, Market Intelligence Lead for Manufacturing & Technology, said:

“The Chancellor’s cash injection of £90 million to create future mobility zones is a positive move. Smart transport solutions present a huge opportunity to radically transform how we live, work and travel. It is reassuring to see the Government take another important step in its campaign to embrace the next generation of citizen driven mobility. Now is the time for local authorities and transport bodies to get ahead of the game.”

Charlotte Morton, Chief Executive of the Anaerobic Digestion & Bioresources Association (ADBA), said: 

“We were disappointed that the Budget did not confirm a commitment to introducing universal food waste collections in England or any further funding support to encourage local authorities to introduce these where they haven’t already done so. 

 “We strongly urge the Treasury, BEIS and DEFRA to ensure the forthcoming Resources & Waste Strategy includes these measures to help end the scandal of valuable organic materials being wasted in incineration or landfill – meeting our Carbon Budgets depends on it. As highlighted by the Committee on Climate Change, we also need urgent action on replacement for the Renewable Heat Incentive by the end of the year to ensure that generation of renewable heat continues to receive government support. 

“ADBA welcomes the confirmation that Ministers will maintain the difference between alternative and main road fuel duty rates until 2032 to support the decarbonisation of the UK transport sector – this recognises the valuable role that clean fuels such as biomethane need to play.” 

In its Budget Submission, ADBA set out the case for rollout of universal food waste collections in England to replicate the improvement in food waste recycling rates seen in Scotland, Wales, and Northern Ireland as the result of a similar policy. As well as helping to divert food waste away from environmentally damaging landfill or incineration, the National Infrastructure Commission has estimated that introducing universal food waste collections in England would save local authorities up to £400 million in capital costs and £1.1 billion in operational costs between 2020 and 2050.

The Budget states that if current policy fails to reduce the amount of waste going to incineration and landfill ahead of recycling, the Government is prepared to introduce a higher tax on incineration, though it declined to set out a firm timetable for this.

ADBA will continue to strongly push for support for universal separate food waste collections in the forthcoming Resources & Waste Strategy, and will continue to make detailed representations to the relevant Departments.

Responding to Budget 2018, Lord Porter, Chairman of the Local Government Association, told GPSJ:

“Today’s Budget shows the Government has started to listen to the LGA’s call for desperately-needed investment in our under-pressure local services, but falls short of what we need in the long-term. Councils were at the front of the queue when austerity started so local services should be at the front of the queue if it is coming to an end.

“The LGA’s Budget submission highlighted the severe funding pressures facing councils in 2019/20. The Chancellor has acted to help tackle some of this immediate funding crisis with £650 million for social care which provides a financial boost for some of our local public services.

“While this funding will ease some of the immediate financial pressure facing councils and our local services, it is clear that this cannot be a one-off. Today’s funding is a start, but the real test will come in the Spending Review next year.

“Local government in England continues to face significant funding gaps and rising demand for adult social care, children’s services and homelessness support will continue to threaten other services our communities rely on, like running libraries, cleaning streets and maintaining park spaces. Councils also continue to face huge uncertainty about how they will pay for local services into the next decade and beyond.

“Investing in local government is good for the nation’s prosperity, economic growth and the overall health and wellbeing of the nation. We now look forward to working with the Government to ensure the forthcoming Spending Review delivers a truly sustainable funding settlement for local government, and its adult social care Green Paper puts social care on a firmer, long-term financial footing for the people who depend on care and support.”

Commenting on the Budget, Dan Burke, public sector strategy partner at PwC, said:

“Public service leaders will be pleased to receive extra short term cash to cover major pressures in areas such as social care, universal credit, roads, housing and defence. But all the big decisions will have to wait until next year’s Spending Review.

“The end to austerity in public spending will depend on a Brexit ‘deal dividend’ that the Chancellor hopes we will be enjoying by next Spring.

“Whatever happens, it’s clear that the long term future for public services depends on finding new ways to deliver them, using the new technology that is already driving innovation in the rest of the economy.”

Adam Lent, the Director of the New Local Government Network (NLGN) thinktank told GPSJ:

“Local public services have endured more cuts than any other part of the public sector over the last eight years. This has thrust councils into a growing financial crisis. The Chancellor’s long list of one off and relatively small cash boosts are welcome but are really nothing more than sticking plasters. If austerity is genuinely to end then councils need a long-term settlement that delivers financial sustainability. Councils will now look to the Spending Review next year for this but given the Chancellor’s modest prediction for spending growth, they will look forward more in hope than expectation.”

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