Tuesday 12 November 2024
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Nottingham

Autumn Budget 2024: Reaction from Nottinghamshire experts

As Chancellor Rachel Reeves announces Labour’s first budget for 14 years, experts from Nottinghamshire and the East Midlands have reacted to the announcement.

Experts from the University of Nottingham have reacted to the announcement.

Dr Christopher Pich, Associate Professor in Marketing
on the public mood towards the budget
He said: “The budget seems to be more focused on ‘tricks’ than ‘treats’. Voters and commentators do not expect there to be any giveaways or positive surprises.
“In fact, the Prime Minister and Government have been preparing the Nation for budget cuts, and spending squeezes since July’s election victory. Many have started to question the perceived trickery of Labour’s winning election manifesto including how the Government defines ‘working people’.
“Therefore, the mood across the nation ahead of the budget is one of pessimism, anger, and fear.”
Dr Christopher Byrne, Assistant Professor in Politics
On the politics of the budget
He explained: “Chancellor Rachel Reeves has just announced the new Labour government’s first budget, its first major ‘fiscal event’ and our best indication yet of what its priorities and political strategy will be going forward.
“There are wins in this budget for people on the national living wage (which is going up) and young workers in particular (there is going to be a single ‘adult’ living wage in future), and more money for defence. Motorists have been protected with a freeze in fuel duty, and the ’triple lock’ on pensions is still intact. However, there are some losers. In fact, this is the biggest tax-raising budget in recent years, amounting to some £40bn of net increases.
“The single biggest measure is the increase in employer National Insurance Contributions, accounting for £25bn. Prior to the general election Labour promised not to raise taxes for “working people”. This probably allows the government to credibly claim to have kept their promise, but it is politically risky. It is all but inevitable that it will depress wage growth, exacerbating the UK’s long-standing post-financial crisis problem of stagnant pay and living standards.
“There were also significant but less politically tricky increases to Capital Gains Tax and inheritance tax (which will now apply to pensions). The political calculus here is that these rises have protected the most sizeable electoral constituencies and, come the next general election, the public will have mostly forgotten or, alternatively, won’t care if public services have improved, especially the NHS and schools, the two main beneficiaries of the budget.
“Nevertheless, the government has expended significant political capital with this budget. The Chancellor’s claims to have discovered a “£20bn black hole” in the public finances, necessitating these tax rises, were reminiscent of the strategy David Cameron and George Osborne used to justify their austerity policies after 2010. However, it’s not clear that it will be as politically effective this time given that the Cameron-Osborne government had the benefit of a generally supportive media and a coalition partner’s in the form of the Lib Dems to reinforce their narrative.”

Commenting on changes to how the Treasury measures debt and an additional £500m funding for the government’s affordable homes programme, Peter Ware, Head of Government at UK and Ireland law firm Browne Jacobson, said:

“Fiscal rule changes that unlock borrowing for infrastructure investment are long overdue, while social landlords will be energised by extra funding and five-year fixes to rent increases – but these only represent a small part of the jigsaw if we are to solve Britain’s economic growth puzzle.

“The bigger picture ultimately requires government to set the conditions that are conducive to private sector investment, which can effectively supplement any new public funding to improve the social apparatus that influences livelihoods.

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“Investors tell us they have the funds ready to inject into projects with a positive social purpose as part of their broader mission, and are yearning for a return to the type of investment environment that was evident in the 1990s and 2000s.

“At the time, the private finance initiative (PFI) provided a gateway for public and private sector partners to join forces in delivering vital public infrastructure, such as schools, roads and hospitals.

“PFI was cancelled in 2018 after receiving criticism for issues including perceived poor value for the taxpayer and windfalls for investors that refinanced debt at lower rates following the riskier construction phase.

“In the absence of any replacement, we are now falling behind other major economies in delivering infrastructure, with the assets we do build being both the most expensive and delayed in the G7.

“Therefore, if the new government is serious about its mantra to ‘invest, invest, invest’, it must identify a new private finance model that learns from the mistakes of its predecessor to ensure the public purse receives better value and control while remaining attractive to the private sector.

“Alternative models are emerging and worthy of further exploration. In particular, the Future Governance Forum’s recent proposal for infrastructure investment partnerships takes lessons from the non-profit distributing model deployed in Scotland and mutual investment model in Wales to place a greater emphasis on community benefits in any project, cultivates a culture of long-term collaboration and gives local areas more control over their infrastructure.

“A joined-up strategy that can harness greater public and private investment will help the government in its stated mission to foster sustainable growth, enhance national connectivity, and drive innovation – the building blocks of a resilient, forward-looking economy.”

 

Commenting on planned changes to the Local Government Finance Settlement (2.81 in Autumn Budget document), Peter Ware, Head of Government at UK and Ireland law firm Browne Jacobson, said: “Local authority leaders have for a long time called appealed to government to provide certainty over their funding settlements to help with long-term planning and for an end to competitive funding pots, which favour those councils best equipped for bidding.

“Now that the government has signalled an intention to move towards multi-year funding settlements that integrate previous grant funding pots, it’s crucial that local authorities get their act together so they’re able to demonstrate where funding is needed, as this will be crucial to their ability to access new public funding.

“The reason why such small amounts of Levelling Up Fund, Towns Fund and Shared Prosperity Fund money has been spent is because many councils haven’t known how to spend it effectively within the perimeters of those programmes.

“With greater scrutiny over value for the taxpayer on the horizon, government will want to target shovel-ready projects, or at least a clear path towards such schemes. This means local authorities must develop a coherent picture of the greatest investment needs within their areas, and a clear plan for how they would spend any new funding to improve the lives of their populations.”

Independent Age Chief Executive Joanna Elson, CBE comments on today’s Budget including concerns about Winter Fuel Payment plans:

“Today’s Budget was a mixed bag for older people in financial hardship. There were some welcome announcements from the UK Government includingthe continuation of the Triple Lock, changes to the earnings limit for Carers Allowance, investment in Discretionary Housing Payment and anextension to the Household Support Fund. All of these have the potential to help older people in financial hardship.

“However, many older people living on low incomes will be incredibly concerned that the UK Government is going full steam ahead with plans to means test the Winter Fuel Payment. At the very least, this change shouldn’t be made until Pension Credit take-up is substantially increased. The latest figures show that up to 970,000 eligible older people could be missing out on Pension Credit, and now they will lose the Winter Fuel Payment despite living on a low income. This will have a devastating impact on older people in financial hardship across the country. The people we speak to at Independent Age are planning to make drastic cutbacks just to get by, from heating one room in their house to visiting public places just to stay warm.

“Many people experiencing poverty in later life will feel their voices have not been heard today with few policies that will quickly get financial support to them. For example, the UK Government could have widened the Winter Fuel Payment eligibility to include those receiving Housing Benefit, and committed to the annual uprating of Local Housing Allowance.

“In the long-term, nobody should have to worry about their finances as they age. In the future we want to see national social tariffs for water and energy, this will help protect those on low incomes from spikes in costs like we have seen recently. It is also time for politicians to agree on what an adequate income in later life should be to avoid financial hardship.

“Our latest polling found that 87% of people aged 65 and over think the UK Government doesn’t understand the issues facing older people, and sadly it is hard to see enough in this Budget that will change this view.”

Carly Caton, Partner specialising in commercial healthcare at UK and Ireland law firm Browne Jacobson, said: “Any new funding that helps to add capacity will of course be welcomed within the NHS but to prevent this just being a sticking plaster, we must also identify new avenues to generate additional revenue for trusts and their NHS patients.

“The government should actively encourage trusts, backed by funded support programmes, to develop a commercial mindset and explore how to maximise their available resources, while simultaneously improving healthcare services for the general public.

“Increasing private patient activity within NHS hospitals is one of the easiest routes to achieving this. Most trusts already do this to some extent with private patient units but these tend to be relatively small, meaning they provide untapped potential in terms of raising additional income to plough back in to NHS services.

“There are numerous ways of expanding these units and it doesn’t necessarily require significant capital investment if a trust is willing to partner with a private provider. Partnership structures can extend from commercial agreements to developing some form of physical expansion to estates, and all whilst creating new income streams for NHS patients at no cost to the taxpayer.

“Many of our decision-makers are all too keen to shout from the rooftops about the NHS being broken but this isn’t necessarily the case – it boasts world-leading assets and expertise that, if harnessed correctly, provide ample opportunities for healthcare to help drive economic growth as opposed to hampering it.”

 

 

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