APSE response to the Budget 2024

Not quite a kickstart for local councils

The Chancellor’s announcement of 1.5% (or 1.7% including capital) increase on day-to-day spending is not the uplift councils were hoping for and will still leave significant gaps in funding. That being said, the recognition of the crisis in Special Educational Needs and Disability services, with a £1billion increase or 6%, is welcome but falls far short of the estimated gap of £6billion.  

The 2% productivity savings, factored across all government spending departments, appears to be a return to the early days of Best Value, requiring increases in day-to-day spend to be offset by efficiencies and reform. Whilst this is not a surprise to anyone it does beg the question if this is achievable.

Of particular concern to APSE is the employers’ NI contributions rise of 1.2% taking it to 15% from April 2025. In some areas of local government, where services are more labour intensive, this could have a really harsh impact, wiping out any increases in budgets, assuming that funding is even passed through to those services. Those same areas, just scraping above the new minimum wage rate of £12.21, will also potentially be hit by the change in NI employer thresholds reducing from £9,100 to £5,000. If you are a school meals or home care provider, these are particularly worrying developments.

Whilst the funding announcements for schools renewal and repairs, including those impacted by the RAAC issues, are overall to be welcomed, we must reflect that the fragmentation of the education system in England means local authorities will not see an increase in their overall spend as a result.

A focus on new affordable homes, new money for building council housing and reform to Right to Buy discounts, alongside councils retaining the full sales receipts are also welcome, and long-called for within the sector. However, the Chancellor could have gone further by allowing local councils to impose a moratorium on Right to Buy sales so they do not face the loss of their most attractive stock, which is a real issue when supply of social homes for rent is dire.

Most worrying of all in a budget that promised to kickstart economic growth, the OBR is only suggesting a nudge above 1.5% GDP by 2029. That is more of a jump-lead on a rusty old battery than a kickstart on a Harley Davidson. It could have been worse, but for local councils it could have been so much better.

Mo Baines is Chief Executive of the Association for Public Service Excellence (APSE)