Spring Budget 2024: How will Steer’s key sectors be affected by the latest UK budget?
The numbers on inflation, growth and national insurance dominated the headlines, but what might you have missed?
"A Long-Term Budget for Growth, brought to you by the Conservative Party". This was the phrase repeated over and over again. It might be a General Election year…
Beyond headlines of inflation coming down, growth increasing above plan and an end to 'non-dom' tax status what else did we learn from Chancellor Jeremy Hunt last week?
As a company, Steer is always focused on how our cities, infrastructure and communities will be affected by big government announcements. The finer details that will impact us, our clients and the people we serve can get lost behind the headlines, but below are three of our key takeaways from the Spring Budget 2024.
Net Zero is still on the way, but perhaps not as quickly as we’d like
After a year that saw announcements of delays to the bans on internal combustion engine (ICE) vehicles and gas boilers many thought the UK Government’s commitment to Net Zero was slowing down. However, there were some signs of green growth announced at the dispatch box by the Chancellor as he outlined an (albeit weaker than some would like) industrial strategy.
There will be £120 million available via the Green Industries Growth Accelerator to support nuclear power (including small modular reactors), the offshore wind industry (which is in a rut following poor bid performance last year) and low-carbon technology such as carbon capture. A further £270 million is available for zero-emission vehicles, including clean aviation, while a projected £1.5 billion will be raised by an extension of the windfall tax on North Sea oil and gas production into 2029.
This is arguably countered by the 5p reduction in Fuel Duty remaining with no increase since 2011.
An uncertain time for local government, but change is around the corner for some
It is by now an accepted fact that local authorities across the UK are struggling financially and facing tough decisions. Efficiency improvements were a focal point for the Chancellor but a decade of austerity and enormous existing pressure on essential services means many are anxious the axe will fall on economic development, energy planning and transport.
Interestingly, at a time when cash-strapped councils are slashing culture budgets to zero, additional funding is up for grabs in the West Midlands and Wales, and £100 million is available for ‘levelling up culture projects,’ with all recipients announced so far in the Midlands and the North of England.
The ‘Levelling Up’ agenda remains a patchwork approach. The Long-Term Plan for Towns program has been given a boost of £400 million, £20 million for 20 towns for community and regeneration projects in places as far apart as Arborath, Coleraine, Darlington, Ramsgate and Rhyl.
When it comes to devolution deals a ‘trailblazer’ devolution deal was announced for the North East Mayoral Combined Authority, following announcements for the Liverpool City Region, South Yorkshire and West Yorkshire Mayoral Combined Authorities; with ‘level two’ deals for Buckinghamshire, Surrey and Warwickshire. This will give the authorities more power over transport and infrastructure.
As we move forward into the next phase of devolution, it will be vital that local areas pull the new levers available to them in a more joined up fashion and adopt an outcome-based approach to investment and growth.
A revolutionary time for local transport
Many of the above funding allocations for local government may see new money spent on transport schemes. One only has to look at Greater Manchester to see how transformative devolution can be in that regard.
Local Transport Fund allocations have already been announced for local authorities in the Midlands and the North which fall outside the high-profile mayoral combined authorities in those regions. An authority which may have received £1.5 million a year of Integrated Transport Block funding, for example, is now in store to receive a seven-year settlement worth approximately £150 million.
The capital boost is game changing for many areas, but married with the local government budget cuts mentioned above, how will authorities deliver? Only authorities that find the funding to invest in skilling up and developing, and maintaining credible pipelines of schemes (around which consensus has been built and the case developed) will succeed.
Many transport announcements came in October 2023 as part of Network North. These included progressive funding for City Region Sustainable Transport Settlements and the Local Transport Fund, rail commitments for Northern Powerhouse Rail and East West Rail and cash for roads including additional funding for highways maintenance and Major Road Network schemes.
However, despite these earlier giveaways, the budget makes it clear that departmental funding will fall by 30% from £8.2 billion of resource funding to £5.7 billion next year, with capital funding slashed by 7% from £22.1 billion to £20.5 billion. This is equal to £4 billion a year or £20 billion over the course of a parliament. With a full reallocation of HS2 funding, from where will the cuts come? The lack of detail is extremely alarming.
