Autumn Statement 2016
The Rt Hon Philip Hammond MP, The Chancellor of the Exchequer, delivered his first and last Autumn Statement to the House of Commons yesterday. The purpose of the Autumn Statement is to provide the nation with an update on the government’s plans for tax and spending, and to update the UK’s economic forecast.
Given the nature of events over the last year the focus of the Statement was placed on productivity and the future of the UK economy post Brexit. There was little mention of education and skills but, with a weakening economy, the government’s ability to invest is limited, with borrowing a full £90 billion higher over this Parliament as a result of this.
The Chancellor concluded his Statement by announcing that the Autumn Statement will be replaced with a Spring Statement and an Autumn Budget from 2017. The key headlines from the Statement include:
- The government will be supporting a Royal Society of the Arts pilot to promote cultural education in schools
- The government will provide £50 million of new capital funding to support the expansion of existing grammar schools in each year from 2017/18. Devolved administrations will receive funding via the Barnett formula.
- The government will provide £13 million to support firms’ plans to improve their management skills by implementing Sir Charlie Mayfield’s review of business productivity.
- The government will award £1.8 billion to Local Enterprise Partnerships across England through a third round of Growth Deals – £556 million will go to North England, £392 million to the Midlands, £151 million to the East of England, £492 million to London and the South East and £191 million to the South West. Individual awards to the LEPs will be announced in the coming months.
- The funding is to support local infrastructure in terms of improving travel connections, house building, boosting skills and enhancing digital connectivity.
- Mayoral combined authorities will receive new powers from government enabling them to borrow for their new functions, allowing them to invest in economically productive infrastructure, subject to agreeing a borrowing cap with HM Treasury.
- The government remains committed to devolving powers to support local areas to address productivity barriers.
- The government will continue to work towards a second devolution deal with the West Midlands Combined Authority and will begin talks on future transport funding with Greater Manchester.
- The government will transfer the budget for the Work and Health Programme to London and to Greater Manchester, on the basis both areas meet conditions, including co-funding.
- The government will also devolve the adult education budget to London from 2019/20 (subject to readiness conditions). The government will continue to work with London to explore further devolution of powers.
- The government will shortly publish a Midlands Engine Strategy and are committed to the overall approach of building the Northern Powerhouse.
- The Northern Powerhouse Investment Fund (NPIF) and the Midlands Engine Investment Fund (EMIF) have been given the greenlight. The NPIF will make its first investments in early 2017 to local SMEs and the first investments from the EMIF will follow shortly after.
To read the Autumn Statement in full please click here.