Budget 2018: putting a plaster on the cuts
The Chancellor’s Budget had something for everyone, but its overriding message for cities was ‘see what 2019 brings’
The Chancellor’s Budget had something for everyone, but its overriding message for cities was ‘see what 2019 brings’
For a politician said to be uncomfortable about Parliamentary set-pieces, Philip Hammond used his Budget yesterday to announce a lot and to spend a lot – all of the £13bn extra he had thanks to some cautious OBR forecasting earlier in the year.
However, with the uncertainties of Brexit – good deal, bad deal or no deal – and next year’s Spending Review on the horizon, the Chancellor kept his powder dry for 2019. In many ways, this was a Budget for a country whose national politics are on pause.
Yes, cities up and down the country will benefit from extra money for some of their more pressing priorities like the £650m for social care and the £420m for potholes. But these will only tide them over and will do little to prepare them for a post-Brexit future.
Similarly, some will welcome the £900m temporary business rate relief for retailers. But, as the Chancellor made clear, this relief is necessary to address a weakness in the system – the slow cycle of business rate revaluation – which the government has chosen not to address. We’ll publish our assessment of the Government’s wider high streets plan later this week.
More encouraging was the Chancellor’s £240m for the Transforming Cities Fund. Handed directly to cities, with an emphasis on those with Metro Mayors, it will further boost their transport plans. And it shows that the Government understands the significant role that cities play in improving productivity and creating jobs.
That might bode well for the Spending Review. But what we do know from the Chancellor’s Red Book is that, while austerity may be coming to an end across the totality of Government spending, this will play out differently for different departments.
The extra money for the NHS – and no doubt for defence too if yesterday’s announcements are anything to go by – will eat up the small increase in public spending the Chancellor promised.
That implies that for the crucial post-Brexit years covered by 2019’s Spending Review, there will at best be no real terms increase in unprotected government spending, which includes funding for local government, or at worse, more cuts to it.
If the Chancellor wants to see the UK economy prosper, he would be wise not to let that happen.
Spending Reviews are as infrequent as buses in some places, so the Government needs to use this one to ask and answer the big questions about the role cities can and should be playing in the national economy, and give them the resources and responsibilities they need to fulfil this potential:
Of necessity, this was a make-do-and-mend Budget. Whatever Brexit has in store for cities and for the economy as a whole, next year’s Spending Review has to be bolder.
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