Autumn Financial Statement & Devolution Deal

Jeremy Hunt has announced the Autumn financial statement (budget).

You can find the full speech he gave to the House of Commons here and the full statement here.

Here are some of the key points from the statement:

  • The 75% business rates discount for Retail Hospitality and Leisure businesses with rateable values of up to £110,000 will be extended for another year.
  • The small business multiplier used to calculate business rates payable will also be frozen for a further year.
  • Class 2 National Insurance is a flat rate compulsory charge, currently £3.45 a week, paid by self-employed people earning more than £12,570 which gives state pension entitlement. The government are abolishing Class 2 National Insurance altogether, saving the average self-employed person £192 a year.  This will apply from 6 April 2024.
  • Self-employed people also pay Class 4 National Insurance at 9% on all earnings between £12,570 and £50,270. That tax will be cut by 1 percentage point to 8% from April. Taken together with the abolition of the compulsory Class 2 Charge, these reforms will save around 2 million self-employed people an average of £350 a year from April.
  • “Full expensing”, that is, the super-deduction of tax for large businesses to further stimulate business investment, will be made permanent (it was originally for 3 years).
  • The Government have accepted the Low Pay Commission recommendation and will increase the National Living Wage by 9.8% to £11.44 an hour from 1 April next year.
  • The government will cut the main rate of Employee National insurance by 2 percentage points from 12% to 10% from 6 January 2024.  This change will help 27 million people. It means someone on the average salary of £35,000 will save over £450.
  • The Government will increase Universal Credit and other benefits from next April by 6.7% in line with September’s inflation figure, an average increase of £470 for 5.5m households next year.
  • The Local Housing Allowance rate will be increased to the 30th percentile of local market rents. This will give 1.6 million households an average of £800 of support next year.
  • All alcohol duty will be frozen until August 1st 2024, so no increase in duty on beer, cider, wine or spirits.
  • From 1 April 2024, the government will increase the full new state pension by 8.5% to £221.20 a week, worth up to £900 more a year.

Devolution Deal for Lancashire

Further to my summary of the Autumn Financial Statement yesterday, we can confirm that the Chancellor also announced yesterday that a Devolution Deal for Lancashire has been agreed.

Blackburn with Darwen Council has been working with Blackpool Council and Lancashire County Council for about 7 years to get this approved by Government.

The terms of the agreement can be found here (subject to ratification of the deal by the councils and the statutory requirements for making the legislation to implement the deal such as consultation).

The devolution agreement includes:

  • The formation of the Lancashire Combined County Authority (CCA) to provide overall vision and leadership, seek the best value for taxpayer’s money, and be accountable to local residents.
  • The integration of relevant functions of the Lancashire Local Enterprise Partnership into the Lancashire CCA, ensuring that there continues to be a strong and independent local business voice in the form of a Lancashire Business Board which informs local decision making and strategic economic planning. In absorbing the role and functions of the Growth Lancashire Company, LEP Growth & Skills & Employment Hub, LEP Investment Team, destination management/visitor economy, the Lancashire CCA will deliver a number of functions on behalf of the central government departments.
  • New powers to better shape local skills provisions to ensure these meet the needs of the local economy. This will include devolution of Adult Education functions and the core Adult Education Budget, and the opportunity to provide input into Local Skills Improvement Plans.
  • New powers to improve and better integrate local transport, including the ability to introduce bus franchising subject to approval from the Secretary of State for transport, and control of appropriate local transport functions e.g. responsibility for an area-wide local transport plan.
  • Subject to funding, policy and delivery considerations at the next Spending Review, UK Shared Prosperity Fund (UKSPF) planning and delivery at a strategic level from 2025/26.
  • The ability to exercise compulsory purchase powers to help drive the regeneration of the area and to build more affordable homes, subject to the agreement of the Local Authority where the relevant land is located.
  • Up to £20 million capital funding in the current Spending Review period to support innovation led growth (including assets to maximise the benefits of National Cyber Force HQ) and net zero ambitions across Lancashire.  This investment is subject to agreement of the relevant business cases
  • Strengthening the local visitor economy, reinforcing Lancashire’s attractive and vibrant cultural and creative sector through the formation of a wider Lancashire visitor offer encompassing Blackpool, which remains the UK’s No1 seaside resort, and nationally significant investments such as Eden North, with facilities and events of regional and national significance, aligned to the Local Visitor Economy Partnership (LVEP)
  • Deliver innovation-led growth, including working with government to capitalise on Lancashire economic potential in growing the energy and low carbon sector
  • Improve urban quality and help address poor health.

Once the CCA has been established, further devolved functions and consolidated funding may be agreed over time and included in future legislation.

The next steps are for the constituent councils to work with the government to develop a full implementation plan, covering each policy agreed in this deal, to be completed ahead of implementation.