Arguably the most significant news for local government in the Budget wasn't focused on the sector at all. The OBR's sharply downgraded estimates for productivity across the economy suggest a long period of slow growth with the unknowable impact of Brexit still to be factored in. This makes it difficult to be optimistic about any of local government's sources of funding over the medium-term.
One key source of funding, business rates, will become less buoyant as a result of the adjustment to the formula for annual increases. Rates will now rise by the CPI measure of inflation rather than RPI, saving businesses £2.3bn next year. The move to three yearly rather than five yearly revaluations makes practical sense, provided the politicians can resist delaying revaluations which may arrive at inconvenient points in the electoral cycle.
