Autumn Statement: The aftermath

Philip Hammond's debut Autumn Statement included a £2.3bn Housing Infrastructure Fund, £1.4bn for 40,000 new affordable homes and £1bn to boost full-fibre broadband and 5G, alongside £1.1bn to improve local roads and new City Deals and devolved powers for London. The Chancellor also promised new borrowing powers for mayors of combined authorities. Social care, however, did not get a mention. What does it all mean for local government? LGE asked the experts.  

Lord Porter, chairman, Local Government Association

Councils, the NHS, charities and care providers have been clear about the desperate need for the Chancellor to take action to tackle the funding crisis in social care. It is unacceptable that this has not been addressed in the Autumn Statement.

It is good news for local government that the Autumn Statement has accepted our call for measures to boost affordable housebuilding, which must be supported by adequate infrastructure, and which help councils tackle some of the nation's roads repair backlog and improve broadband.

The next few years will be extremely challenging for councils who we estimate face an overall £5.8bn funding gap by 2020. Even if councils stopped filling in potholes, maintaining parks and open spaces, closed all children's centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes, they will not have saved enough money to plug this gap by the end of the decade.

The ability to fix longer-term funding settlements has been important for councils and something we have long called for. Given the majority of councils have taken up the option, the Government now needs to publish the Local Government Finance Settlement as soon as possible. This will give councils more time to plan for the difficult funding decisions which lie ahead.

Jonathan Carr-West, chief executive, Local Government Information Unit

Local government wasn't expecting any early Christmas presents from the Chancellor and it didn't get any. It's disappointing to hear him blame "higher spending by local authorities" as one of the causes of "a weaker economic outlook".

Of course, measures to boost productivity and support low- and middle-earning families will be welcome to councils. But what will really worry local government will be what the Chancellor didn't talk about.

Nothing about the role of local government in allocating and spending the National Productivity Investment Fund. Nothing about devolution beyond the major cities. Nothing about funding for social care.

And nothing about how business rate retention is going to work and how local government will be financed in the medium to long term. This was presented as an upbeat Autumn Statement, but between the lines there was nothing for local government to celebrate.

Sadiq Khan, mayor of London

London has a bigger population than Scotland, Wales and Northern Ireland combined, but we have far less control over how our city is run.

The Autumn Statement marks the first step in our journey to give the capital a greater voice so we can protect jobs, wealth and prosperity and provide an extra incentive for economic growth.

The record-breaking affordable housing settlement means we can get on with the hard slog of building new genuinely affordable homes, but it won't happen overnight - fixing the housing crisis will be a marathon and not a sprint.

Of course, we didn't get everything we asked for. I'm disappointed, for example, that the Chancellor didn't devolve control of suburban railways in London. Commuters who rely on Southern, South-West and South-Eastern services are currently being ripped off with a terrible service. I hope the Government will move on rail devolution sooner rather than later.

Andrew Jepp, managing director, Zurich Municipal

After a summer of significant upheaval, council chiefs were looking to the Chancellor to use the statement to steady the ship. Local authorities will welcome Mr Hammond's slight departure from the fiscal policy of his predecessor. But given that councils are dependent on growth to continue to deliver essential services, the OBR's projections for slowed economic growth over the next five years means chiefs will be in no doubt that there are many more tough years to come.

Infrastructure investment in housing and transport is particularly important. The challenge for councils will be to ensure they secure the local benefits they need from these national infrastructure commitments, especially during the planning and construction process.

The Chancellor's promise that devolution will continue will also be well received, as will the additional powers given to mayoral combined authorities. Overall the Chancellor's tone was one of continuation rather than dramatic change, and this will be welcomed by local authority leaders. 

Huw Williams, lead partner public law and vice-chairman, Geldards

The borrowing powers proposed for mayoral combined authorities demonstrate a continuing commitment to this local government model which was originally promoted by the Chancellor’s predecessor and it will be interesting to see how they make use of these powers to promote local initiatives and growth. 

Overall, the announcements about new investments are modest and the Government's intention to see public finances return to balance and to address challenges of rising longevity and fiscal sustainability during the course of the next parliament suggests that local authorities in particular will continue to face difficult circumstances in managing budgets and meeting demands for services for the foreseeable future.

Anthony Lee, joint head of residential advisory and consulting, BNP Paribas Real Estate

While any additional funding towards affordable housing is welcome, as is more flexibility on how funds can be used, the amount proposed is unlikely to achieve the delivery of 40,000 new rented homes that the Government suggests. 

Before 2010, when grant funding was previously available to fund affordable housing in private-sector led developments it was typically provided at around £30,000 per bed space, or £130,000 for a three-bed unit. However, since that time, house prices in many parts of London have almost doubled, so any grant funding has to work harder to achieve the same outcome that would have been possible in 2010.

Wayne Story, chief executive, Civica

With the UK now borrowing more than planned, all public services need to accelerate digital engagement and the provision of digital services to work smarter, and to support demand for services that are compatible with lifestyles and provide anytime, anywhere access. Improving efficiencies and reducing costs while raising the standard of services for the public is also still very much the order of the day.

Cllr Martin Tett, transport spokesman, Local Government Association

While more money to solve congestion problems is good news, we need to see the detail behind the headline. We hope the Government directs this money towards local roads to help local people. Councils stand ready to work with central government to identify local schemes that can be delivered quickly.

However, to put this in context, the backlog of repairs on existing roads currently stands at £12bn and it would currently take 14 years to fix the backlog of potholes. Over the remaining years of the decade, the Government will invest more than £1.1m per mile in maintaining national roads - which make up just three per cent of all total roads. This level of investment contrasts starkly with the £27,000 per mile investment in maintaining local roads, which are controlled by councils and make up 97 per cent of England's road network.

This gulf in funding puts the country’s businesses at a competitive disadvantage and provides poor value for money. Virtually every "national" journey starts and ends locally, which means the road network is not working as well as it could for people in their corner of the country.