Budget: Chancellor launches productivity push

By Heather Jameson | 06 March 2024

Chancellor Jeremy Hunt has unveiled a Budget with little respite for local government but demands for increased public sector productivity.

As expected, he announced a further 2p cut to employee National Insurance to ‘make employment pay’, and pledged to continue to cut the tax when it was affordable.

Patrick Melia, Solace spokesperson for local government finance, said:  ‘The Government has, once again, failed to properly address the extreme financial pressures facing local government.

‘Continued underinvestment in local areas will only serve to further restrict the economic prospects of the country at a time when growth has never been more needed.’

On public services, the chancellor told Parliament: ‘We need a more productive state, not a bigger state.’

Plans for boost productivity with digital solutions, AI and prevention started with increased funding of £2.5bn for digital transformation, with smaller funds for police and the courts.

For local authorities he found £165m for children in care and £105m to build 50 new special educational needs schools.

Elsewhere, Hunt announced an extension of the Household Support Fund at it’s current level for six months.

Westminster City Council leader Cllr Adam Hug claimed the move ‘simply kicks the can down the road’.

‘It will mean little relief to thousands of hard hit Westminster families who need supermarket vouchers to get through the week,’ he said.

The chancellor pledged £100m for devolution for the North East, and county deals covering Buckinghamshire, Warwickshire and Surrey.

There was a further £100m levelling up cash for cultural projects as councils continue to struggle with arts funding amid the growing budget crisis.

In the West Midlands, where Birmingham City Council has been criticised for cutting culture funds, the chancellor has handed extra cash to Midlands Mayor Andy Street.

Hunt peppered his speech with additional funding for village halls and community led housing schemes, alongside long-term funding for a development corporation in Cambridge.

Other Budget measures included freezing duty on fuel and alcohol, increasing excise duty on vapes and a ‘fairer’ system for non dom taxes.

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Finance Devolution Budget