Budget Headlines

Budget Headlines
What does it mean for sector?

Yesterday’s budget statement confirmed that public spending will go up by 1.2% but most of that will go to the health service in England. Next year's spending review will decide how much police, local government, schools, defence and other public services will receive. Much will depnd on a continuing reduction in debt, an increase in tax returns and the imapct of the final Brexit outcome.

The main highlights for the voluntary and community sector are summarised below.

Family income and benefits

  • The personal allowance threshold, the rate at which people start paying income tax at 20%, to rise from £11,850 to £12,500 in April - a year earlier than planned.
  • The higher rate income tax threshold, the point at which people start paying tax at 40%, to rise from £46,350 to £50,000 in April.
  • After that, the two rates will rise in line with inflation.
  • National Living Wage increasing by 4.9%, from £7.83 to £8.21 an hour, from April 2019.

The move to consolidate six benefits into a single Universal Credit has been controversial. Southwark has been an early adopter of the new system. In order to help address some of the more worrying adverse results of the change, Community Southwark, in partnership with Southwark Law Centre, Advising Communities, Citizens Advice Southwark, and Pecan, have launched the Southwark Universal Credit Network. The next meeting takes place on 6th November. If you want to know more contact Robert.

In the budget the Chancellor announced some additional help, but insisted that Universal Credit “is here to stay”.

  • Work allowances for universal credit to be increased by £1.7bn
  • 2.4 million working families with children to benefit by £630 a year
  • An extra £1bn to help welfare claimants transfer to the new consolidated benefit

Housing and Planning
As we know from the Southwark Conversation, housing is a priority for people residing in Southwark. There were policies in the budget to stimulate the housing market.

  • All first-time buyers purchasing shared equity homes of up to £500,000 to be exempt from stamp duty.
  • £500m for the Housing Infrastructure Fund, designed to enable a further 650,000 homes to be built.
  • Lettings relief limited to properties where the owner is in shared occupancy with the tenant.
  • New partnerships with housing associations in England to deliver 13,000 homes.
  • Guarantees of up to £1bn for smaller house-builders.

Local business and the high street
Local Business have been hit hard in recent years with a rise for many in the business rates that they pay and a slump in footfall as more people choose to shop online. The Southwark Community Action Network (CAN) is running a campaign to introduce a fairer system of business rates. You can read more here.

The Chancellor announced some measures to address some of the problems that small businesses are facing. 

  • Business rates bill for firms with a rateable value of £51,000 or less to be cut by third over two years
  • Measure to benefit 90% of independent shops, pubs and restaurants, cutting bills by £8,000
  • £900m in business rates relief for small businesses and £650m to rejuvenate High Streets

Increased spending on the NHS is seen by most pundits as the big winner in the budget along with the increase in defence spending. There was a lot more focus on mental health support. The Chancellor announced that the NHS 10-year plan will include a new mental health crisis service with comprehensive mental health support available in every major A&E, a children and young people’s crisis team in every part of the country, more mental health ambulances, more safe havens in the community and a 24-hour mental health crisis hotline.

  • Confirmation of an extra £20.5bn for the NHS over the next five years
  • A minimum extra £2bn a year for mental health services
  • New mental health crisis centres, providing support in every accident and emergency unit in the country
  • More mental health ambulances and a 24-hour mental health crisis hotline.
  • An extra £700m for councils, for care for the elderly and those with disabilities