Baachu/ 2021 Autumn Budget And Spending Review Detailed For Business And Government Suppliers ​

Baskar Sundaram
Baskar Sundaram

Following today’s Budget and Spending Review, the Government has published ‘regional and national factsheets’ showing the implications for each region and nation.

These cover in particular transport settlements, the Levelling Up Fund and the Community Ownership Fund.

They are here:  251021 Regional fact sheets v3 630PM.docx 

The Chancellor has made the following announcements which will be of particular interest.

Transport and Infrastructure

  *   £5.7 billion for eight City Region Sustainable Transport Settlements to transform local transport networks through London-style integrated settlements.  Will fund projects such as the Sheffield Supertram renewal and the Wednesbury to Brierley Hill metro extension in West Midlands

  *   £2.7 billion over the next 3 years for local roads maintenance in places not receiving City Region Settlements

  *   £24 billion between 2020-21 and 2024-25 for strategic roads, delivering over 60 upgrades, including the Lower Thames Crossing and major upgrades to the A66, A428, A417 and A12

  *   £2.6 billion from 2020-2025 to deliver a long-term pipeline of over 50 local road upgrades including the A509 Isham Bypass, A259 Bognor Regis and A350 Chippenham Bypass which will progress to the next stage of development

  *   Over £35 billion of rail investment over the SR21 period including HS2, rail enhancements and renewals, focusing on the Midlands and the North.  Integrated Rail Plan will be published soon

  *   £5.7 billion over three years to keep essential rail services running, including £360 million to modernise ticketing and retail systems, and £205 million to begin the mobilisation of Great British Railways

  *   Targets to deliver gigabit capable broadband and 4G across the UK through Project Gigabit and the Shared Rural Network

  *   Over £5 billion for buses and cycling during this Parliament

  *   £620 million of additional investment to support the transition to electric vehicles

  *   £23 million of new funding in anticipation of the final recommendations of Sir Peter Hendy’s Union Connectivity Review

  *   The UK Infrastructure Bank (UKIB) is now operational and is expected to support more than £40 billion of investment

  *   Project Speed was established in June 2020 to accelerate and improve infrastructure delivery across the UK, with the 50 reforms announced on track to be implemented by the end of this Parliament

  *   National Infrastructure Commission will now have an additional objective to consider how its advice can support climate resilience and the transition to Net Zero carbon emissions by 2050

  *   New remit letter to National Infrastructure Commission:  Remit letter to the National Infrastructure Commission – GOV.UK 

Fund Announcements

  *   UK Shared Prosperity Fund (UKSPF) will rise to £1.5 billion a year by 2024-25

  *   UKSPF will support a range of skills and employment focused programmes, including funding Multiply – the new UK-wide programme to equip adults with functional numeracy skills

  *   £1.7 billion worth of projects in 105 places, to upgrade local infrastructure, announced for first bidding round of the £4.8 billion Levelling Up Fund

  *   First 21 projects to benefit from the £150 million Community Ownership Fund

Freeports

  *   The first tax sites will be in Humber, Teesside and Thames, and those Freeports will be able to begin initial operations from November

Housing

  *   Nearly £24 billion multi-year settlement for housing

  *   This includes up to 180,000 affordable homes through investment of £11.5 billion in the Affordable Homes Programme

  *   Confirmed grant funding of over £5 billion to remove unsafe cladding from the highest-risk buildings, supported by revenues raised from the new Residential Property Developer Tax

English Devolution

  *   The Levelling Up White Paper is due to be published later this year.  The Budget document states this will “provide further information on the government’s plans to enable more areas to agree ambitious devolution deals, where there is local support, and to strengthen existing devolution arrangements to ensure local leaders can get on and deliver”

Local Government

  *   Estimated average real-terms increase of 3 per cent a year in core spending power

SR21 announcements

  *   Capital spending is set to increase by £4.2 billion in cash terms over the Parliament to £11.2 billion in 2024-25, which is a 3.8% real-terms growth rate over the SR21 period. As a result, the DHSC core capital budget will reach its highest real-terms level since 2010

  *   NHS England’s day-to-day budget is set to grow by 3.8% on average in real terms over the SR21 period, ensuring it can tackle the elective backlog, deliver the Long Term Plan and has the resources to fight COVID-19

  *   £2.3 billion additional funding to transform diagnostic services with at least 100 community diagnostic centres across England

  *   £2.1 billion over the SR21 period for innovative use of digital technology

  *   SR21 confirms £4.2 billion over the next three years for 40 new hospitals and over 70 hospital upgrades

  *   As announced as part of the Health and Social Care Levy, SR21 confirms over £8 billion over the SR21 period to tackle the elective backlog

  *   A new budget of £150 million over the SR21 period to invest in NHS mental health facilities linked to A&E and to enhance patient safety in mental health units

  *   The government will provide hundreds of millions of pounds in additional funding over the SR21 period to ensure a bigger and better trained NHS workforce

SR21 Priority Outcomes for DHSC

  *   improve healthcare outcomes by providing high-quality, integrated and sustainable care at the right time in the right place, by tackling the electives backlog, and by improving infrastructure and transforming technology

  *   protect the public’s health through the health and social care system’s response to COVID-19

  *   improve healthcare outcomes through a well-supported workforce

  *   improve, protect and level up the nation’s health, including reducing health disparities

  *   improve social care outcomes through an affordable, high-quality and sustainable adult social care system

Education investment

  *   £4.7 billion by 2024-25 for the core schools budget in England, over and above the SR19 settlement for schools in 2022-23.

  *   £2.6 billion over the SR21 period for new school places for children with special educational needs and disabilities (SEND) in England, more than tripling current capital funding levels to over £900 million by 2024-25.

Capital Investment

  *   £2.8 billion in capital investment in skills including:

     *   improvements to the condition of post-16 estate;

     *   new places in post-16 education;

     *   more specialist equipment and facilities for T Levels; and,

     *   delivery of the commitment to 20 Institutes of Technology across England.

     *  The Government remains committed to a long-term school rebuilding programme to   rebuild 500 schools over the next decade.

National Living Wage

  *   The Government will increase the NLW for individuals aged 23 and over by 6.6% from £8.91 to £9.50 an hour effective from 1 April 2022.

  *   The Government has also accepted the LPC’s recommendations for the other NMW rates to apply from April 2022 including:

     *   increasing the rate for 21 to 22 year olds by 9.8% from £8.36 to £9.18 per hour

     *   increasing the rate for 18 to 20 year olds by 4.1% from £6.56 to £6.83 per hour

     *   increasing the rate for 16 to 17 year olds by 4.1% from £4.62 to £4.81 per hour

     *   increasing the rate for apprentices by 11.9% from £4.30 to £4.81 per hour

     *   increasing the accommodation offset rate by 4.1% from £8.36 to £8.70 per hour

Employment & Skills

  *   £3.8 billion will be invested in skills, an increase of 48 per cent over the course of this parliament, including a 29% real terms increase in adult skills funding from 2019-20 to 2024-25.

  *   £1.6 billion over three years to roll out T-levels, and £550 million for adult skills in England.

  *   £830 million for modernising colleges in England.

  *   Rise in National Living Wage from £8.91 to £9.50 per hour, from 1st April.

  *   Scale-Up Visa system will make it quicker and easier for fast-growing businesses to bring in highly-skilled individuals.

  *   Increasing apprenticeships funding to £2.7 billion by 2024-25 – the first increase since 2019-20.

Apprenticeships

  *   By April 2022, the Government will consider changes to the provider payment profiles aimed at giving employers more choice over how the apprenticeship training is delivered, and explore the streamlining of existing additional employer support payments so that they go directly to employers.

  *   Developing an enhanced recruitment service by May 2022 for small and medium-sized enterprises (SMEs).

  *   Supporting flexible apprenticeship training models to ensure that apprenticeship training continues to meet the needs of employers.

  *   Introducing a return on investment tool in October 2022 to ensure employers can see the benefits apprentices create in their business.

  *   The SR confirms that the Government is extending the £3,000 apprentice hiring incentive for employers until 31 January 2022.

HGV Drivers

  *   Investing £32.5 million in roadside facilities for HGV drivers on the road.

  *   Investing in new skills bootcamps to train an additional 5,000 drivers.

  *   Increasing the number of HGV driving tests available by up to 50,000 each year.

  *   Freezing vehicle excise duty (VED) for HGVs and suspending the HGV road user levy for another 12 months from August 2022.

  *   Relaxing cabotage rules temporarily for international HGV journeys within Great Britain.

  *   Issuing up to 5,000 short-term temporary visas for food and fuel haulage drivers to work in the UK.

Public Sector Pay

  *   Public sector workers will see pay rises over the next three years as the recovery in the economy and labour market allows a return to a normal pay setting process.

  *   The Government will be seeking recommendations from Pay Review Bodies where applicable.

  *   To ensure fairness and the sustainability of the public finances, public sector pay growth over the next three years should retain broad parity with the private sector and continue to be affordable.

The Health and Social Care Levy

  *   A new 1.25% Health and Social Care Levy will apply UK-wide, to the same population and income as Class 1 (Employee, Employer) and Class 4 (SelfEmployed) National Insurance contributions (NICs), and to the main and additional rates.

  *   The Levy will not apply to Class 2 NICs or Class 3 NICs and will be effectively introduced from April 2022, when NICs for working age employees, self-employed people and employers will increase by 1.25% and be added to the existing NHS allocation.

  *   From April 2023, once HMRC’s systems are updated, the 1.25% Levy will be formally separated out and will also apply to the earnings of individuals working above State Pension age, and NICs rates will return to their 2021-22 levels.

  *   From April 2023, receipts from the Levy will go to those responsible for health and social care across all parts of the UK.

Rates Relief

  *   Introducing a new temporary business rates relief for eligible retail, hospitality and leisure properties for 2022-23. Eligible properties will receive 50% relief, up to a £110,000 per business cap.

  *   Introducing a 100% improvement relief for business rates. This will provide 12 months relief from higher bills for occupiers where eligible improvements to an existing property increase the rateable value. The Government will consult on how best to implement this relief, which will take effect in 2023 and be reviewed in 2028.

  *   Introducing from 1 April 2023 until 31 March 2035 targeted business rate exemptions for eligible plant and machinery used in onsite renewable energy generation and storage, and a 100% relief for eligible heat networks, to support the decarbonisation of non-domestic buildings.

  *   Increasing the frequency of business rates revaluations so that they take place every 3 years instead of every 5 years, starting in 2023.

Pensions

  *   Legislating to temporarily suspend the earnings element of the ‘Triple Lock’ used to uprate the State Pension and Pension Credit.

  *   For 2022-23 the new and basic State Pension, Pension Credit and survivors’ benefits in industrial death benefit will increase by the higher of CPI or 2.5%, protecting pensioners from higher costs of living and protecting taxpayers from the significant additional fiscal pressure created by the statistical anomaly.

  *   In 2025-26 the Government will introduce a system to make top-up payments in respect of contributions made in 2024-25 onwards directly to low-earning individuals saving in a pension scheme using a Net Pay Arrangement.

Public Sector Pay

  *   Public sector workers will see pay rises over the next three years as the recovery in the economy and labour market allows a return to a normal pay setting process.

  *   The Government will be seeking recommendations from Pay Review Bodies where applicable.

  *   To ensure fairness and the sustainability of the public finances, public sector pay growth over the next three years should retain broad parity with the private sector and continue to be affordable.

Corporation Tax Relief

  *   R&D tax reliefs will be reformed to support modern research methods by expanding qualifying expenditure to include data and cloud costs, to more effectively capture the benefits of R&D funded by the reliefs through refocusing support towards innovation in the UK, and to target abuse and improve compliance.

  *   These changes will be legislated for in Finance Bill 2022-23 and take effect from April 2023.

Recovery Loan Scheme

  *   The Recovery Loan Scheme will also be extended until 30 June 2022 to ensure that lenders continue to have the confidence to lend to small and medium-sized businesses.

  *   Finance will be available up to a maximum of £2 million per business, supporting their recovery and growth following the pandemic.

  *   The Government guarantee will be reduced from 80% to 70% to encourage the lending market to move towards normality as the economy continues to recover.

Other Taxation

  *   Following the Government’s announcement at Spring Budget to increase the corporation tax rate to 25% the rate of the bank surcharge will be set at 3% from April 2023.

  *   The annual allowance for groups will also be raised to £100 million.

  *   The Government will legislate in Finance Bill 2021-22 to reform income tax basis periods so businesses’ profit or loss for a tax year will be the profit or loss arising in the tax year itself, regardless of its accounting date.

  *   The Government will freeze fuel duty UK-wide in 2022-23.

  *   Will loosen 0.75 per cent pension charge cap

  *   Goal is to reduce taxes by the end of this Parliament

Net Zero Investment

  *   The Budget and SR confirms that since March 2021 the Government will have committed a total of £30 billion of domestic investment for the green industrial revolution.

  *   The Government also remains on track to meet its £11.6 billion commitment on International Climate Finance over 2021-26, investing an expected £6.6 billion over the next three years.

  *   £240 million for the Net Zero Hydrogen Fund and £1 billion for the Carbon Capture Usage & Storage (CCUS) Infrastructure Fund.

  *   £1 billion Net Zero Innovation Portfolio accelerating near-to-market low-carbon technology innovations.

  *   £1.7 billion of new direct government funding to enable a final investment decision in a large-scale nuclear project this Parliament, subject to value for money and approvals.

  *   £120 million for a new Future Nuclear Enabling Fund to address barriers to entry for nuclear projects.

  *   £380 million for the UK’s world-leading offshore wind sector.

Greener Transport

  *   £6.1 billion to support the policies and strategy set out in the Transport Decarbonisation Plan.

  *   £416 million of UK-wide R&D funding for programmes to help commercialise low and zero emission transport technologies, including trials of three zero emission HGV technologies, and a multi-year Clean Maritime Demonstration Competition.

  *   An additional £620 million for public charging in residential areas and targeted plug-in vehicle grants, building on the £1.9 billion committed at SR20.

  *   An increase in capital support to £817 million over the SR21 period for the electrification of UK vehicles and their supply chains.

  *   £1.2 billion for bus transformation deals to deliver London-style services, fares and infrastructure improvements.

Greener Buildings

  *   £1.4 billion to help decarbonise the public sector estate in England.

  *   £3.9 billion for England and Wales to ensure buildings are warmer and cheaper to heat, while supporting jobs across the country.

  *   £450 million to grow the heat pump market in England and Wales as part of the ambition to work with industry to reduce the costs of heat pumps by 25-50% by 2025.

  *   £950 million for the Home Upgrade Grant and £800 million for the Social Housing Decarbonisation Fund.

Justice investment

  *   £785 million in 2024-25 to manage the increased number of offenders being brought to justice and reduce waiting times in the criminal courts.

  *   £200 million a year by 2024-25 to improve prison leavers’ access to accommodation, employment support and substance misuse treatment.

Borders

  *   £41 million resource funding by 2024-25 and £461 million capital funding over the SR21 period for the Future Borders and Immigration System (FBIS).

  *   £347 million by 2024-25 to deliver new UK sovereign functions following EU Exit, including over 1,000 Border Force officers to deliver customs and transit arrangements for goods

  *   £270 million capital funding over the SR21 period to enhance the UK’s nuclear detection capability at the border.

Immigration

  *   £85 million resource funding by 2024-25, on top of the continuation of £110 million in 2021-22, bringing total investment to £195 million resource funding by 2024-25

  *   £50 million capital funding over the SR21 period for the New Plan for Immigration.

Full documents are here: Autumn Budget and Spending Review 2021: documents – GOV.UK 

Summary:  Budget and Spending Review – October 2021: What you need to know – GOV.UK 

Speech:  Autumn Budget and Spending Review 2021 Speech – GOV.UK 

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