Budget 2016: The reaction

George Osborne's Budget on 16 March new included three new devolution deals, the permanent doubling of small business rate relief, proposals to convert all schools to academies by 2020 - and another £3.5bn in public spending cuts by the end of the parliament. What did the experts make of it?

Lord Porter, chairman, Local Government Association

To build desperately needed homes, create jobs, provide the dignified care for our elderly and boost economic growth, all councils need greater freedom from central government to take decisions over vital services in their area.

It is disappointing that the Chancellor has not accepted calls by councils, the NHS, care providers and the voluntary sector to bring forward the £700m of new money in the Better Care Fund by 2019-20 to this year. The failure to do so means vulnerable members of the community still face an uncertain future where the dignified care and support they deserve, such as help getting dressed, fed or getting out and about, remains at risk. Vital social care services will also increasingly be unable to help ease the growing pressure on the NHS and the threat of a care home crisis will creep closer to becoming a reality.

The LGA also reiterates our opposition to forced academisation of schools. It's vital that we concentrate on the quality of education and a school's ability to deliver the best results for children, rather than on the legal status of a school, to make sure that we're providing the education and support needed in each area.

Allowing local government to keep 100 per cent of business rates is key and is something the LGA has been campaigning to achieve for the last decade. While it won't in itself solve the long-term challenges facing councils and local services, allowing local government to retain 100 per cent of its business rates income is now vital.


Jonathan Carr-West, LGiU.Jonathan Carr-West, chief executive, LGiU

This is a Budget that will leave many in local government deeply anxious.

The Chancellor announced £3.5bn extra cuts in public sector funding by the end of the parliament. It's not clear where these cuts will fall but experience suggests they will hit local government either directly or through the knock-on effects of cuts to welfare benefits.

Only two months ago, local government was offered the "certainty" of a four-year funding settlement, but that certainty already looks illusory.

Elsewhere, there was better news, with progress on three new devolution deals, but many of the deals we expected were not announced and it remains to be seen whether the Government's somewhat secretive, deal-based approach to devolution will help or hinder it.


Jonathan Owen, chief executive, National Association of Local Councils 

This is a bittersweet Budget for councils at all levels, with positive steps forward on devolution countered by a further reduction in spending on public services.

These proposals signal an unprecedented reconfiguration of English local government and council services. Continued steps to devolve power out of Whitehall are to be welcomed, but Government must go further and be more ambitious, ensuring decentralisation extends to local communities and not just remote combined authorities with devolution deals.

The pressure on discretionary council services, which are appreciated and valued by local people the most as they improve quality of life and wellbeing, is immense; many will only continue to be provided if parish and town councils step up and take them on.

But to do this and unlock this "hyper-localism", a nationwide devolution deal is required: parish and town councils are needed across all of England, with reformed powers to support their areas and a fair funding package to enable them to invest in local services with financial freedoms and new investment from business rates, Community Infrastructure Levy and New Homes Bonus.

These massive and potentially exciting changes need urgent debate: about how communities can become more resilient and support themselves, and how best to support the increasingly vital role of parish and town councils in this rapidly changing local government landscape.


Cllr Paul Carter, County Councils Network.Cllr Paul Carter, chairman, County Councils Network

Business rates discounts will come as a welcome boast to local high-streets, small and medium-sized businesses. However, questions remain over how the £6.7bn of tax breaks will be funded. 

It is important that Government fully compensate councils for any loss of income. This should not be an additional financial burden for authorities, who will wholly rely on local taxation by the end of the parliament.

In deciding where the new £3.5bn of unspecified savings in 2019-20 will fall, hopefully Government will respect their commitment to a fair and sustainable long-term financial settlement for councils. 

Some real progress has been made [on devolution], with substantial deals empowering the historic counties of Lincolnshire, Cambridgeshire, Suffolk and Norfolk. Such deals will see billions of pounds of infrastructure investment for these areas, and transport, skills and growth decisions brought closer to the people and businesses they affect. 

These deals are rightly built around county geographies and two-tier collaboration and include changes to local democratic structures, with the first non-city elected mayors.

The coherence of county geographies and the service expertise of county councils will be vital elements in driving growth and reforming public services. 

Building on our scale and strategic capacity and working with our district partners, counties must be empowered to capture the benefits from devolution, safeguard the most vulnerable and maximise efficiencies in delivering local services.

To realise a "devolution revolution" we hope to see further transformational county deals agreed across the country over the coming period.


Simon Parker, director, New Local Government Network

The Government promised stable, long-term funding for councils, but these announcements will only add to the sector's confusion. George Osborne promised further cuts for 2019 and knocked a huge hole in business rate income without spelling out how councils will be compensated.

The Government's announcement on academies is not really all that radical. Councils already play only a residual role in the education system, and moving to academies is the logical culmination of 20 years of reform. The idea that "local bureaucracy" is the problem with British education is completely outdated: councils can no longer afford the dead hand of bureaucracy even if they wanted to. As so many other areas of local public services seek to integrate, working closer together at a local level, schools being run from the centre will hamper their ability to contribute to their places and respond to the economic and social needs to their local areas.


Dr Laurence Ferry.Dr Laurence Ferry, associated professor in accounting, Durham University Business School

The Chancellor's "devolution revolution" could lead to more local austerity. Local authorities will be completely self-funding by 2020, but raising the threshold for business rate relief outlined in the Budget could result in them losing a significant amount of revenue. This comes on top of cuts of 79 per cent in council funding since 2010 and will accelerate the trend towards outsourcing and privatisation of local public services, which studies have shown challenge democratic accountability.

The Chancellor's plans for new regional and sub-regional bodies will take responsibility for many public functions that were previously undertaken by local government. Most of the public do not understand this emerging, asymmetric and complex tier of governance and only one individual within each city-region (the mayor) will be democratically accountable.

Mr Osborne stressed that he has challenged the "illusion of local democracy" by getting rid of ring-fencing of local authority funds and passing more control of funding to local authorities. In particular, he highlighted he would pass full control over business rates, but at the same time announced business rates relief was more than doubling for small and medium-sized businesses.