Chancellors Budget in Brief – LGIU Briefing

The Chancellors Budget and what it is likely to mean for Local Government. This is the LGIU Briefing which I hope you find informative.IMG_5708 City Council

Announcements for Local Government

Social Housing

The budget details plans to legislate to freeze working-age benefits, including tax credits and the Local Housing Allowances, for 4 years from 2016-17 to 2019-20. This is forecast to save £4 billion a year by 2019-20.

Rents in social housing in England will be reduced by 1% a year for 4 years.


Working-age benefits, including tax credits and Local Housing Allowance, will be frozen for 4 years from 2016-17 (this doesn’t include Maternity Allowance, maternity pay, paternity pay and sick pay)

The household benefit cap will be reduced to £20,000 (£23,000 in London)

Support through Child Tax Credit will be limited to 2 children for children born from April 2017

Those aged 18 to 21 who are on Universal Credit will have to apply for an apprenticeship or traineeship, gain work-based skills, or go on a work placement 6 months after the start of their claim.

The Budget will introduce a new Youth Obligation for 18 to 21 year olds on Universal Credit. From April 2017, young people will participate in an intensive regime of support from day 1 of their benefit claim, and after 6 months they will be expected to apply for an apprenticeship or traineeship, gain workbased skills, or go on a mandatory work placement to give them the skills they need to move into sustainable employment.

From April 2017 the Budget will remove the automatic entitlement to housing support for new claims in Universal Credit from 18-21 year olds who are out of work.


Rents for social housing will be reduced by 1% a year for 4 years.

£800 million of funding is designated for Discretionary Housing Payments over the next 5 years.

The budget includes plans to review the use of lifetime tenancies in social housing to limit their use and ensure that households are offered tenancies that match their needs, and ensure the best use is made of the social housing stock.

Social housing tenants with household incomes of £40,000 and above in London, and £30,000 and above in the rest of England, will be required to “Pay to Stay”, by paying a market or near market rent for their accommodation.

Children and Education

From the 2016-17 academic year, cash support for new students will increase by £766 to £8,200 a year, the highest level ever for students from low-income households. New maintenance loan support will replace student grants. Loans will be paid back only when graduates earn above £21,000 a year

This Budget confirms that, from September 2017, the free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of 3 and 4 year olds.

Parents with a youngest child aged 3 or older (including lone parents) who are able to work will be expected to look for work if they are claiming Universal Credit.

£30 million will be provided to further speed up the adoption process while paving the way for the introduction of regional adoption agencies.


From April 2016, a new National Living Wage of £7.20 an hour for the over 25s will be introduced. This will rise to over £9 an hour by 2020.

Public sector pay will increase by 1% a year for 4 years from 2016-17.

The budget details plans to increase the National Insurance contributions (NICs) Employment Allowance from £2,000 to £3,000 a year.


The budget supports plans to continue to pursue more efficient ways of working and further reform to public services. The government will provide funding for the Cabinet Office to explore a number of cross-cutting savings proposals. The Treasury, working with Cabinet Office, will develop specific proposals to inform the Spending Review.


The budget commits to transport devolution in all of the country’s city regions that elect a Mayor, as well as the country’s counties. This includes the rollout of Oyster-style smart and integrated ticketing systems.

The government is working towards further devolution deals with the Sheffield City Region, Liverpool City Region, and Leeds, West Yorkshire and partner authorities, to be agreed in parallel with the Spending Review. The Budget notes that agreement will be reached based on combined authorities agreeing to an elected mayor working with local leaders to oversee any new powers devolved from ministers.

The Budget announces further devolution of powers to Manchester, including devolving Fire Services under the control of the new directly-elected Mayor, establishing a Greater Manchester Land Commission and granting the city region more powers over planning subject to the agreement of the Cabinet member representing the district in which the power is used.

The Budget states that it will be offering towns and counties the opportunity to agree devolution deals.

Economic Development

The government is inviting bids for a new round of Enterprise Zones. The existing Enterprise Zones have supported the creation of over 15,000 jobs throughout England.

To ensure that local areas have a greater say over their own economies, the government will consult on devolving powers on Sunday trading to city mayors and local authorities.

The budget details plans to invest £23m in 6 Next Generation Digital Economy Centres over 6 sites (London, Swansea, Newcastle, Nottingham, York and Bath), leveraging £22 million of additional funding, and partnering with LEPs, regional councils, and local SMEs. These centres will exploit opportunities across sectors of the digital economy including the creative industries, finance, healthcare and education.

Phil Bateman

Phil Bateman is Married to Mary and lives in Wednesfield North. He was a long serving local politician having served previously on the now defunct West Midlands County Council... read more


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