Andrew Jepp comments on Spring Budget 2017

Andrew Jepp, Managing Director, Zurich Municipal, comments on the Spring Budget:

“The Government made its intentions clear well before today’s Budget, when it recently announced that Whitehall departments are modelling scenarios for further cuts of between three and six percent.

“Despite a climate of austerity, local authorities have turned to new and innovative methods to drive down costs and maintain services at a level that the public expects. But the announcement of yet more cuts to public budgets, coming so soon after news that the Ogden rate will be revised down, places even more pressure on already stretched local authority budgets, forcing councils to take on new risks and find new ways to make ends meet.

“While risk-taking is inevitable in this uncertain and difficult climate, it’s essential that local authorities ensure that they have robust plans in place to minimise and mitigate the risks and threats that will materialise in the years ahead.

“On a more positive note, councils will be relieved to see the Chancellor take some action over their concerns on the funding of adult social care and inject an additional £2bn of grant funding over the next 3 years to help local authorities fulfil their obligations in this vital area. The £1bn made available in 2017/18 will be particularly welcome for councils facing difficulties now. Council chiefs will be reassured to see the Government provide local authorities with a £300m fund to deliver discretionary relief for exceptional cases of businesses negatively affected by rising business rates. Despite these commitments the scale of the challenge in local authority funding remains and time will tell if these announcements will have the desired effect.

“The Chancellor’s announcements on additional funds for the devolved nations, discussions with the Mayor of London on further powers for the capital and renewed commitment to metro-mayors will have been well-received but councils will want to see concrete commitments to extend the Government’s devolution agenda.

“Overall Mr Hammond’s tone was one of continuation rather than dramatic change, and this will have been welcomed by local authority leaders. But councils are dependent on growth to continue to deliver essential services. With the triggering of Article 50 likely to create more uncertainty and the slightly improved OBR projections on economic growth over the coming years chiefs will be under no illusions that that there are more tough months and years to come.”