BUDGET 2013: BY PRACTICE AREA

March 21, 2013

Local Government Lawyer has identified some of the key areas for local government arising out of this year's Budget.

Overall

Departmental Expenditure Limits: There will be a reduction in resource DELs by £1.1bn in 2013/14 and £1.2bn in 2014/15. This amounts to a 1% cut for most government departments.
Local government: together with the police, local government is to be exempt from a further cut in 2013/14. The position on 2014/15 is unclear.
Schools and health budgets: These remain unchanged.

Adult/Children’s Services

Whole Place Community Budgets: The Government will establish a new multi-agency network to drive the transformation of local public services. “The network will spread innovation from the Whole-Place Community Budget pilots and What Works Centres to support other places at key stages to provide advice and support on co-designing local public service transformation”.
Social care funding reform: Drawing on the Dilnot Commission’s recommendations, the Government will introduce a £72,000 cap on reasonable care costs and extend the means test from April 2016. The asset threshold will be increased from £23,250 to £118,000.
Social investment tax relief: The Government will consult by summer 2013 on the introduction of a new tax relief to encourage investment into social enterprises. The outcome of the consultation will be confirmed at Autumn Statement 2013 with a view to introducing legislation in Finance Bill 2014.
Schools efficiency review: The Department for Education is to carry out a schools efficiency review. This is expected to be published at the same time as the Spending Review in June 2013.

Employment

Public sector pay: Public sector pay awards in 2015-16 will be limited to an average of up to 1%. It will be for government departments and pay review bodies to determine whether a lower award is justified based on affordability and individual recruitment and retention needs.
Progression pay: The Government will seek significant further savings through reform to progression pay in the 2015/16 Spending Round.

Housing/Property

Pension investment rules and unused space in commercial properties: The Government will explore with interested parties whether the conversion of unused space in commercial properties in high streets and town centres to residential use could be encouraged by amending Investment Regulation Pensions Schemes rules.
Help to Buy: mortgage guarantee: The Government will create the Help to Buy: mortgage guarantee for those with small deposits.
The Help to Buy: equity loan: The Government will provide an equity loan worth up to 20% of the value of a new-build home, repayable once the home is sold. The eligibility criteria for shared equity will be significantly widened; the maximum home value will be £600,0000 and there will be no income cap constraint. The scheme will be made open to all those looking to move up the housing ladder, not just to first time buyers.
Social Rental Policy: At the 2015/16 spending round, the Government will set out a social rental policy that gives social landlords certainty until 2025.
Pay to Stay: The Government will ‘shortly’ take steps to allow landlords to charge market rents to those social housing households with incomes of more than £60,000 a year and “intends to make it the responsibility of those households to ensure they are making a fair contribution, with all additional income reinvested in housing”.
Right to Buy in London: The Right to Buy cap will be increased in London from 25 March 2013 to £100,000 in London.
Right to Buy: simplification: The Government will simplify the Right to Buy application process for both local authorities and prospective tenants.
Right to Buy: eligibility: The Government will reduce the time tenants have to wait before they are eligible for Right to Buy from five to three years.
Build to Rent: The Build to Rent fund will be expanded from £200m to £1bn.
Zero Carbon Homes: The DCLG will consult on next steps for Zero Carbon Homes.
Extension to affordable homes guarantee programme: The Government will double the existing affordable homes guarantee programme. A further £225m will be provided to support 15,000 affordable homes.
Public land disposals: The DCLG has invited bids from eligible public landholders for £290m funding allocated to accelerate surplus public land disposals at Autumn Statement 2012. Around 30 sites will transfer to the Homes and Communities Agency.

Licensing/Regulatory

Alcohol duty rates: The general beer duty rate will be reduced by 2% from 25 March 2013. Duty rates on low strength beer will be reduced by 6% and on high strength beer by 0.75% in total from 25 March 2013. All beer duty rates will then increase by the Retail Prices Index (RPI) thereafter. As announced at the March Budget 2010, wine, spirits, and cider duty rates will increase by 2% above RPI from 25 March 2013. (Finance Bill 2013) (44).
Fees for regulation: In the 2015-16 Spending Round, the Government will “drive efﬁciency and reduce fees through additional budgeting controls placed on regulators, without reducing the effectiveness of regulatory enforcement”.
Second phase of the Red Tape Challenge: The Government will launch a second phase of the Red Tape Challenge in summer 2013. This will look at areas such as infrastructure, key stages in the growth of companies, and business activities where negotiating the system is overly complex, through a series of short reviews.

Planning

Judicial review: The Ministry of Justice has consulted on shortening the time limits for bringing a planning judicial review and will set out its plans in spring 2013. The Government will also develop further measures to streamline the process for planning judicial reviews by summer 2013.
Planning use class: The Government will consult on further ﬂexibilities between use classes to support change of use from certain agricultural and retail uses to residential use to increase responsiveness within the planning system.
Planning guidance: The Government will publish signiﬁcantly reduced planning guidance by this summer, in line with Lord Matthew Taylor’s recommendations. This will strengthen the focus on using market signals to ensure land is allocated to support development.
Land auctions feasibility study: The DCLG is progressing the public sector land auctions model and will work with HM Treasury to conduct a feasibility study into wider use of the model.

Projects/Procurement

Lord Heseltine’s Review: The Government has accepted 81 out of Lord Heseltine’s 89 recommendations either in full or in part; five have been rejected and three will be considered as part of the Spending Round later this year.
Single Local Growth Fund: The Government will create a Single Local Growth Fund of growth-related spending, as recommended by Lord Heseltine. This will be operational by April 2015. Funding will be allocated to Local Enterprise Partnerships on the basis of multi-year strategic plans.
Key sectors: £1.6bn in funding will be provided to support strategies in 11 key sectors. They are: automotive, aerospace, life sciences, agri-tech, professional business services, information economy, construction, education, nuclear, oil and gas, and offshore wind.
Infrastructure delivery: The Government will reform its approach to infrastructure delivery, including creating an enhanced central cadre of commercial specialists in Infrastructure UK who will be deployed into infrastructure projects across government, and by summer 2013 establishing new infrastructure capacity plans for key government departments.
Infrastructure strategy: The Government will consider options for making more use of independent expertise in further developing its infrastructure strategy, ensuring that investors have the conﬁdence to make long-term decisions on infrastructure.
Small Business Research Initiative (SBRI): The Government will substantially expand the SBRI among key departments so that the value of contracts through this route increases from £40m in 2012-13 to over £100m in 2013-14, representing 0.25% of procurement budgets, and rising to over £200m in 2014-15, representing 0.5% of procurement budgets.
Government procurement tax rules: The new rules will only apply to events of default after 1 April 2013, and the threshold will be contracts worth £5m. The definition of an event of default has been clarified.