The Spending Review and Autumn Statement were announced on 25th November 2015 and set out the Government’s spending plans over the remainder of the Parliament. This briefing summarises the key announcements and the implications for North West Local Enterprise Partnerships (LEPs).
Ostensibly, the Spending Review (SR) seemed more positive than many anticipated with the Chancellor using improvements in forecast tax receipts and new taxes on business (apprenticeship levy), students (via the student loans system) and categories of homeowners (changes to stamp duty on second homes and buy to let investments) to pay for increased health spending, housing and science investment and to avoid big cuts in the policing budget. Earlier announced welfare changes (working tax credits) have been abandoned but welfare reform is still planned in relation to housing benefit, pension credit and universal credit where entitlements will be restricted and payments reduced with the result that by the end of the Parliament benefit spending excluding pensions will be at its lowest as a share of national income for 30 years. The policy of cuts to central government departmental budgets continues albeit they are viewed by many as smaller than expected, under an assumption that further efficiencies can be found, in particular through the use of digital technologies. Local government budgets will continue to be cut in real terms but the government argues that by giving localities greater control over locally generated taxation they have avoided the significant cuts in local government budgets seen during the last Parliament. By choosing to invest now while sticking to an overall aim of running a budget surplus, the Chancellor has tied future tax and spend decisions even more tightly to future economic growth and associated tax receipts.