Specific Budget announcements relevant to Local Government

Budget 2011

The Chancellor of the Exchequer George Osborne has today given the 2011 Budget statement to the House of Commons. This briefing sets out the initial announcements relevant to local government from the Budget with specific briefings to follow. The full budget document can be viewed here.

The chancellor set out the three principles of Budget as follows:

  • a strong and stable economy;
  • growth; and
  • fairness.

Key announcements

  • The Government will reduce the main rate of corporation tax by a further 1 per cent. From April 2011, the rate will be reduced to 26 per cent and, by 2014, it will be reduced to 23 per cent

  • The tax system will be simplified, responding to the work of the Office of Tax Simplification (OTS), abolishing 43 tax reliefs; and will consult this year on the options for integrating the operation of income tax and National Insurance Contributions (NICs).

  • Fuel duty will be cut by 1 pence per litre on Budget day. The fuel duty escalator will be replaced with a fair fuel stabiliser that increases tax on North Sea oil production when oil prices are high. The April 2011 inflation-only increase will be delayed to January 2012. The April 2012 increase will be delayed to August 2012. The Government will increase the Supplementary Charge on oil and gas production to 32 per cent from 24 March 2011.
  • The Government announces that the small business rate relief holiday will be extended by one year from 1 October 2011.
  • The planning regime will be streamlined and speeded up in favour of sustainable development and a fast track scheme for major infrastructure projects.
  • £100 million of funding for local authorities to repair potholes.
  • The Government announces the location of ten new urban Enterprise Zones within the following Local Enterprise Partnership (LEP) areas: London, Birmingham and Solihull; Leeds City Region; Sheffield City Region; Liverpool City Region; Greater Manchester; West of England; Tees Valley; North Eastern; the Black Country; and Derby, Derbyshire, Nottingham and Nottinghamshire. All business rates growth within the zone for a period of at least 25 years will be retained and shared by the local authorities in the LEP area to support their economic priorities.

Specific announcements relevant to Local Government

Planning

The Budget will:

  • introduce a powerful new presumption in favour of sustainable development, so that the default is ‘yes’ and pilot land auctions, starting with public sector land;
  • streamline the system for planning applications and introduce new fast-track planning for major infrastructure;
  • provide £200 million of new funding for rail projects and £100 million for local authorities to repair potholes;
  • localise choice about the use of previously developed land, removing nationally imposed targets while retaining existing controls on greenbelt land;
  • pilot a land auction model, starting with public sector land;
  • Introduce a number of measures to streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up. This will include a 12 month guarantee for the processing of all planning applications, including any appeals;
  • Ensure a fast-track planning process for major infrastructure applications through the Major Infrastructure Planning system; and consult on proposals to make it easier to convert commercial premises to residential.
  • To accelerate the release of public sector land to support homes and jobs, the Government will work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing, also testing ’build now, pay later’ techniques to quicken delivery.

Infrastructure

  • The Government announced £100 million of funding for local authorities to repair potholes caused by the exceptionally cold winter, funded from within existing budgets. This is in addition to the £100 million announced in February 2011.

Enterprise Zones and LEPs

  • The Budget included an announcement on the location of ten new urban Enterprise Zones within the following Local Enterprise Partnership (LEP) areas: Birmingham and Solihull; Leeds City Region; Sheffield City Region; Liverpool City Region; Greater Manchester; West of England; Tees Valley; North Eastern; the Black Country; and Derby, Derbyshire, Nottingham and Nottinghamshire.
  • In addition, London will have an Enterprise Zone and be able to choose its site (the decision being taken by the mayor of London).
  • The Government will also launch a competitive process for interested LEPs to establish ten more Enterprise Zones.

  • a 100 per cent business rate discount worth up to £275,000 over a five year period for businesses that move into an Enterprise Zone during the course of this  Parliament;
  • all business rates growth within the zone for a period of at least 25 years will be retained and shared by the local authorities in the LEP area to support their economic priorities;
  • Government and local authority help to develop radically simplified planning approaches in the zone;
  • Government support to ensure superfast broadband is rolled out in the zone. This will be achieved through guaranteeing the most supportive planning environment and, if necessary, public funding.
  • In addition, the Government will work with individual LEPs to consider:
  1. the scope for introducing enhanced capital allowances to support zones in
  2. assisted areas where there is a strong focus on high value manufacturing;
  3. the use of Tax Incremental Finance to support the long-term viability of the zone,
  4. in tandem with the Local Government Resource Review; and
  5. UKTI support on inward investment and trade opportunities.
  • The Government will confirm all successful bids to the Regional Growth Fund shortly and will launch the second round in April 2011.
  • Following a thorough review, the Government is approving a revised Sheffield retail quarter regeneration scheme. The Government is also announcing approval of an important, and re-designed, element of the Milton Keynes residential quarter scheme.

Education

  • Fund an additional 80,000 work experience places for young people, ensuring up to 100,000 places will be available over the next two years;
  • Fund up to 50,000 additional apprenticeship places over the next four years; and expand the University Technical Colleges programme to establish at least 24 new colleges.

More information

If you have any questions please contact Dan Garfield on dan.garfield@lgiu.org.uk; or on 0207 554 2800. The LGiU will be providing briefings to members on specific aspects of the Budget in the coming days.