Autumn Budget 2017

Autumn Budget 2017: Paul Dossett - public sector

Paul Dossett, head of local government, Grant Thornton UK LLP, commented:

“In a time of austerity as the public sector is continually expected to produce more with less, this Budget left something to be desired in terms of support for our public services. With local government finances at a tipping point and more than one in three councils spending over their anticipated budgets in the 2015/16 financial year, and a similar result expected this year, this Budget needed to be one that provided assurance for the sector but it missed the mark in terms of overall funding.

“We need to take a place-based approach to help solve the problems areas are facing and to increase productivity and experimentation and innovation in the delivery of public services. Devolution deals are a clear answer to this and it was encouraging to see new deals announced today. But with the majority of these focusing on big city regions we need to ensure the smaller towns and counties are not left behind. An economy of the future needs all areas to be performing at their very best and we need to see equal opportunities for all areas across the UK.

“Continued investment into the NHS is necessary but the announcement today didn’t even cover the current deficit forecast until 2020. Social care continues to be the main driver on demand in council spending and yet received no mention; a very obvious omission. In 2011/12, social care accounted for around 28.9% of total service expenditure and rose to 30.16% in 2015/16, indicative of the growing demand that is not being met. In particular, children’s services have faced challenging savings targets and very difficult decisions over a number of years and in 2015/16 73% of all councils overspent against their children's social care services budget as they struggled to produce more with less. By avoiding addressing this issue directly and continuing to invest elsewhere in the health and social care system the Chancellor is missing a valuable opportunity by choosing to invest in only the roof while the house around it is crumbling.

“The lifting of the HRA borrowing cap will be welcome news to local authorities. It allows them the freedom to invest where needed in their local areas, but it comes with requirements. With the country in an extreme housing crisis we desperately need further clarity on what the government means by ‘high demand areas’ and how this will be defined moving forward. In our view the cap should be lifted for all housing authorities so they can plan holistically across the country to build the social housing that we need.

“The new housing deal for Oxfordshire shows an obvious focus from government on high growth areas, although if we want to prevent others falling even further behind we need to ensure all areas are given the same opportunities. Today’s Budget announced a number of supportive measures to help boost the dwindling housing market but it is not clear what impact they will actually have and only time will allow us to assess how helpful they will be.

“The announcement today provided bits of investment here and there for transport across the country however it is nowhere near the level of investment we need and is again focused only on specific areas. Increased connectivity is essential to help boost local economies and support jobs across the whole of England, not just in our main city areas.

“With very little funding and the main areas of demand for local authorities not even getting a look in, this is a Budget that has once again not done enough for our public sector given the cost of supporting an ageing demographic, increased demand on children’s services and the spike in homelessness.”