Sep 11th 2017, 12:18
Blog 11th September 2017
In this week’s blog, I write about Economic Statistics, the CIPFA conference, the Local Government Association and European Union funding, Grenfell Tower, Business Planning, Supported Housing, the Scottish Planning Bill, Social Rents in Wales, Housing in the Isle of Man, Welfare Reform and Local Authority Housing Finance.
Some interesting economic statistics were published recently. United Kingdom government debt now stands at £1.88trillion (equivalent to 89% of Gross Domestic Product) and it is still increasing. Interest on this debt now costs about £50billion a year and that will also increase – quite significantly if interest rates are increased to reduce inflation and / or protect the value of sterling. Public expenditure is now at 42% of Gross Domestic Product compared with 40% before the financial crisis of 2008. This means that, in practice ‘austerity’ has not meant reducing public expenditure in total but has meant making reductions in budgets for services such as local government, housing and the police; and making reductions in welfare entitlements; while increasing expenditure elsewhere and paying for it through increased borrowing! If I was Chancellor of the Exchequer, I would take a different approach but unfortunately (or perhaps fortunately) I am not!
The graph below shows how UK Government debt increased from 1993/94 to 2015/16. Since 2015/16 it has increased by another £300billion!
Andrew Burns, Director of Finance & Resources at Staffordshire County Council (where I used to be Assistant County Treasurer) is President of the Chartered Institute of Public Finance & Accountancy this year and in his address to their conference recently he predicted that ‘austerity’ would continue into the 2020s. He therefore urged local authorities to have:
“Resilience to deliver annual savings and manage significant financial shocks, while still pursuing ambitious goals and promoting prosperity.”
Meanwhile the Local Government Association has published a report entitled ‘Beyond Brexit’ that argues that the UK government should match the level of European Union funds (£8.4billion from 2014 to 2020) given to Councils after ‘Brexit’. Councillor Kevin Bentley (Conservative), the Deputy Leader of Essex County Council and Chair of the Local Government Association’s ‘Brexit Task & Finish Group’ told ‘Public Finance’ that:
“Since the referendum, one of the biggest concerns for Councils has been the future of vital European Union regeneration funding. Councils have used European Union funds to help new businesses start up, create thousands of new jobs, roll out broadband and build new roads and bridges.”
Despite the UK Government’s assurances that everyone will be able to have everything they want after ‘Brexit’ I fear that the economic situation and continued ‘austerity’ will lead to Councillor Bentley being disappointed. I would expect central government funding for economic development to be minimal after ‘Brexit’ and that this will be one of the many ‘significant financial shocks’ to which Andrew Burns refers.
The September edition of the ‘AWICS Housing News’ was published last week. It features articles on:
Your copy can be freely downloaded from HERE
Our new publication ‘All You Want to Know about Service Charges in Social Housing in Wales’ is now available. For more information or to order a copy, please click HERE
We have just launched a new series of seminars on ‘Welfare Reform 2017: The Implications for Housing’. This seminar will explain and examine the government’s proposals and their implications for local authorities, housing associations and their tenants. It is designed for people who are not experts in welfare reform, but who understand the basics. It is suitable for councillors, board members, housing managers, tenant representatives, finance staff and others with an interest in the implications of welfare reform for housing. For more information or to make a booking, please click HERE
Our next seminar is on ‘All You Want to Know about Local Authority Housing Finance’ and will be held in London on 27th September 2017. It is proving popular, but there are still a few places available. For more information or to make a booking, please click HERE