• The Autumn Statement: Good stuff … or has anything really changed?

    25th November 2015 | News | Claire
  • Firstly, there seems to have been a considerable amount of spinning involved in this budget. Osborne leads everyone to think (right up until the last minute) that the police and working tax credits would see considerable cuts.

    But his announcements today will have ensured positive press coverage as everyone was expecting the worst. Cynical view? Yes but I think that is the accurate one!

    So the cuts are less awful than everyone thought – but most will still happen, albeit at a slower pace.

    The Office of Budget Responsibility has apparently revised its forecast for public finances, which some have suggested is optimistic.

    Firstly, it is good news that working tax credits will not be cut. BUT we shouldn’t forget that universal credit is set to replace working tax credits and will be less generous. People on low incomes will still lose out but it will take longer.

    Please don’t anyone get too excited about the NHS announcements of more cash. Yes the govt is going to pump £8bn more in over the term of this government BUT this depends on NHS trusts making £22bn of efficiency savings!

    And also the level of growth funding, which used to be considerably more generous and rise every year, still flatlines at around the levels of inflation. With the massive increase in demand – more older more ill people, this simply isn’t enough and hospitals are already expressing fears about having enough beds to cope with the inevitable winter demands on the service.

    With a huge problem in nurse recruitment (this is partly why we are seeing so many hospital bed closures locally) Osborne announces that student nurse bursaries (not generous) will now be scrapped and replaced with loans. This could have a seriously detrimental effect on nurse recruitment.

    It is very good news that Devon & Cornwall Police won’t have to find £50 odd million pounds worth of cuts, but they still will have to make cuts. PCC, Tony Hogg says they will review the situation and make further announcements…

    There will be cuts to childcare vouchers for nursery care. And I was amazed to see that families earning up to £100,000 qualify for them!

    I like the 3 percent increase in stamp duty to second home buyers, although I would like to see disincentives go much further, to avoid so many homes being empty much of the time.
    It is quite wrong in my opinion, that Osborne will now hand £2.3bn of taxpayers money to private developers to build so-called affordable houses. He has pretty much allowed developers to get away with not providing any affordable housing in the form of part-rent-part-by, which are ACTUALLY affordable.

    The general consensus is that most people will not be able to afford to buy the new so-called affordable properties … and all the while Right to Buy ensures that every month more and more council houses are sold off – far outstripping the number of councils houses being built.

    The local government cuts will carry on regardless. Over the past five years Devon County Council has had to cut £174m, which has meant closures of most youth centres, cuts to adult social care, children’s services, children’s homes, bus cuts, closure of all DCC run care homes, highways related cuts – and the list goes on…

    A further £110m of savings at the county council are likely to be needed over the next 4 years with £35m of this in the coming year 2016/17.

    By 2020, the only income to local government will be through council tax and business rates. Central government is set to withdraw its local government grant completely.

    The Autumn Statement has made the provision for councils to raise council tax by two per cent, in order to help fund adult social care. Not sure why children’s social care doesn’t qualify.
    Devon County Council raised council tax this year and it would be surprising if it didn’t do so next year. So oddly, we are in a position where we will pay more for fewer services.

    Earlier this year, Hugo Swire, when I challenged him to oppose the local government settlement in the House of Commons vote, described the £50m cuts to Devon County Council as an “increase in spending power!” A completely nonsense term, which apparently included funding that the county council didn’t even receive!

    Finally and very disappointingly, there was nothing in the budget that will please any environmentalist. It is difficult to see how we are going to meet our targets for cutting emissions.

    Subsidies for renewable energy are being slashed back hard and most of our energy money appears to be disappearing off to China in the Hinkley reactor deal, that will see the British taxpayer underwrite something like £17bn of the contract. China will also get extremely favourable energy prices out of us too, something that many economists are infuriated about.

    And of course, Mr Osborne is giving away huge tax breaks to fracking companies – the biggest tax breaks in the world, environmentalists have said.

    So, in summary, the British state will still be cut to its lowest level ever, forever. Margaret Thatcher’s state stood at 46%, but Cameron and Osborne are reducing it to 36% of GDP.

    Photograph by Terry Ife. Devon teenagers protesting about youth centre cuts in February 2014