By James Gilmour, James Thompson and April Grossman
March has brought with it the first (but possibly not the last) Budget for this year. The overall short-term shape of the UK’s tax and spend policy has of course been the primary focus from the budget. Much virtual ink has been spilled on what this all might mean for spending, fiscal rules and the role of the state, with political parties setting out their stall in the run-up to a General Election.
But Budgets are also key moments for the wider UK policy landscape, for local and regional governance, and for our places. We’ve come away with three key takeaways:
1. Devolution takes a major step forward
A Level 4 settlement with the North East, the announcement of three Level 2 deals with Surrey, Warwickshire and Buckinghamshire, and the announcement earlier in the week at the Convention of the North of Level 4 deals for Liverpool City Region, West Yorkshire and South Yorkshire, takes the total of announced English devolution deals to 21. If and when all the deals announced are finalised, the devolution map in England will look something like the below:
Taken together, this represents a substantial expansion of the devolution process, although, as always, much will depend on the detail, particularly around the nature of the departmental-style Single Settlements that form the core of the Level 4 devolution deal.
2. Levelling Up back at the centre of the agenda:
Levelling Up was core to the current Government’s successful pitch to the nation in 2019, and listening to the Chancellor’s speech it was interesting to see Levelling Up back at the centre of the narrative. New policy interventions alongside devolution as mentioned above, include: £400m expansion to 20 further places as part of the Long Term Deal for Towns, £100m in cultural investments, and major housing and regeneration packages for Sheffield, Blackpool, and Liverpool.
Of particular interest is the model being pioneered in Cambridge, where a new development corporation will receive a long-term funding settlement following the new Spending Review, alongside a Government-led proposition to develop the city as “Europe’s Science Capital”. We might not hear much more on this this side of an election, but we think creative approaches to place-based delivery are always worth keeping an eye on.
3. Still no certainty for local government
Despite the renewed focus on Levelling Up, the Budget contained little news for local government, where the financial picture is increasingly grave. Since 2020, 6 local councils have issued Section 114 notices due to financial challenges, an unprecedented position under the modern local government. And more may be to come - the Local Government Association estimates that councils' spending power has dropped by nearly 30% since 2010, while demand for social care continues to rise.
With no longer-term funding settlement possible until after the next spending review, which the Budget has confirmed will be after the forthcoming General Election, the next year seems likely to be challenging and uncertain for councils across the country. For councils, certainty is essential - especially in terms of securing and managing long-term investment. As the Resolution Foundation and LSE have highlighted, public investment is both too low and too volatile, posing a real threat to the UK’s living standards and prosperity.