Yesterday’s Budget solves few of tomorrow’s problems

Millions of people – including tens of thousands of Bristolians – look set to be worse off next year. Households will be left paying £3,000 more in tax in 2026/27 compared to when the Prime Minister took office, thanks to £40 billion of Government tax rises in this Budget, according to the Resolution Foundation.

After the Chancellor’s Autumn Budget and Spending Review yesterday, the Institute of Fiscal Studies has confirmed that inflation will likely continue to outstrip income growth and benefit rises. For millions of families, this picture darkens due to the added challenge of a £1,000 a year Universal Credit cut. The Independent Office for Budget Responsibility (OBR) warns that the cost of the living could rise at its fastest rate for three decades. This comes with supply chain problems caused by the pandemic being worsened by Brexit, with the OBR indicating that trade with the EU is set to fall by 15%.

While we welcome any plans to increase the national minimum wage in April 2022, but it comes too late to help the lowest paid with rising bills this winter. It also falls short of matching the real Living Wage which our Council and an increasing number of Bristol businesses pay their staff. For young people, who were most likely to be furloughed or lose jobs over the last year, there will be a feeling of injustice in that the minimum wage does not uptick as much for workers under the age of 23.

Meanwhile, businesses will welcome further rates relief but will share our disappointment that a mooted online sales tax to make our high streets and city centre more competitive, and to help protect jobs, has not materialised. Instead, taxes on banks’ profits have been cut by £4 billion and large companies like Amazon have been given a tax cut rumoured to be worth some £12 billion.

We also welcome some £540 million of transport funding devolved to the West of England Combined Authority. Our region will receive the most investment per capita of any region through the City Region Sustainable Transport Settlement, but we are also the only area to get the bottom end of our bid – while some funding remains unallocated by the Department for Transport and the Treasury. And it is disappointing that, hot on the heels of the long awaited Portishead Line decision being delayed, rail funding has been delayed until after COP26.

Elsewhere, no new funding has been confirmed to tackle the national cladding scandal – leaving leaseholders in the lurch – and funding for homelessness and rough sleeping appears to have fallen by £110 million. We need continued, sustained investment from Westminster to build on reducing rough sleeping by 80% during the pandemic. More widely on housing, funding to help unlock brownfield sites, like the former Tenants’ Hall in Barton Hill, is much-needed, but it is disappointing that wider regeneration schemes, like Temple Quarter, have not been funded as yet.

And, on education, while we welcome the Budget’s new capital funding for SEND, more widely only around a fifth of the required funding identified by the Government’s former Education Recovery Commissioner has been allocated. After closing more than 1,000 Sure Start since 2010, the announcement of 75 new family hubs in England falls short of what’s needed for the rest of the country, underlining the importance of our administration keeping all of our children’s centres open.

For councils, the national fair funding review for local government from several years ago has still not been actioned. In uncertain times, we need Government to work in real partnership with councils and cities – Levelling Up has to be more than just a slogan. The fight-it-out approach remains for funding pots, rather than enabling long-term planning. So far, just £5.3 million of the £150 million Community Ownership Fund has be awarded, and in the four months since bidding closed for the £220 million Community Renewal Fund, councils are none the wiser on outcomes.

As I confirmed in my State of the City speech last week, after a decade of austerity and the costs of covid-19, our own council faces a potential £42 million shortfall. Other Core Cities are looking at funding gaps of up to £65 million. It is true for most councils that even a 5% annual council tax rise for each of the next three years would not meet the forecast need of adult social care services.