The Autumn Statement: by practice area

November 30, 2011

The Autumn Statement is set to have a significant impact across a range of practice areas.

At Local Government Lawyer we have sought to highlight the key points. However, the full Autumn Statement can be downloaded here. A number of the measures were announced by ministers in advance, for example by Business Secretary Vince Cable in relation to employment law and Cabinet Office Minister Francis Maude in relation to procurement.

OVERALL

Plans will be set for public spending in 2015/16 and 2016/17 to be in line with the public spending reductions over the Spending Review 2010 period. Total Managed Expenditure will accordingly fall by 0.9% a year in real terms
Savings from current spending generated over the Spending Review 2010 period will be used to fund a programme of additional infrastructure investment. These savings include a public sector pay cap of 1%
Local government budgets will be adjusted accordingly. However, the Local Government Association has pointed out that the Autumn Statement gives no further detail on the nature of this adjustment

CHILDREN’S SERVICES

There will be an extra £600m of funding for an estimated 100 additional free schools by the end of this Parliament. This will include new specialist maths Free Schools for 16-18 year olds, “supported by strong university maths departments and academics”
£600m in additional funding will be made available to support local authorities with the greatest pressure on school places in England. The government said this funding was enough to deliver an additional 40,000 school places
There will be funding for a new £50m a year programme to support disadvantaged 16-17 year olds into education, an apprenticeship or a job with training
A further £380m a year will be invested by 2014/15 in extending the offer of 15 hours’ free education and care a week to disadvantaged two year olds

EMPLOYMENT

Public sector pay awards are to be set at an average of 1% for each of the two years after the current pay freeze comes to an end. Departmental budgets – including local government budgets – will be adjusted in line with the policy, with the exception of the health and schools budgets, where savings will be recycled
The State Pension age will be raised to 67 between April 2026 and April 2028. This measure is expected to save around £60bn between 2026/27 and 2035/36
Independent Pay Review Bodies will be asked to consider how public sector can be made more responsive to local labour markets. They will be expected to report back by July 2012. This will apply to all pay review body workforces, with the exception of doctors, dentists, the armed forces and the judiciary
The Minister for the Cabinet Office will review how “more local, market-facing” pay could be introduced in civil service departments. Secretaries of State may then choose to take forward recommendations for their departments
Extra support from Jobcentre Plus will be given to unemployed 18-24 year olds
The government will press ahead with employment law reforms such as an increase in the qualifying period for unfair dismissal from one year to two years from April 2012
All potential claimants will be required to submit their Employment Tribunal claim to ACAS so that early conciliation can take place
The government will look for a ‘Rapid Resolution’ scheme, to provide a quicker and cheaper alternative to a tribunal hearing in simple employment cases (such as holiday pay)
The government has launched a call for evidence on the effectiveness of the TUPE regulations. A formal consultation could take place in 2012
A call for evidence will be completed on the impact of reducing the collective redundancy process for redundancies of 100 or more staff from the current 90 days to 60, 45 or 30 days
Mr Justice Underhill will lead a review of the Employment Tribunal Rules of Procedure. In the meantime the government will change the rules on witness statements and expenses, cost and deposit orders and judges sitting alone in unfair dismissal cases
The government will work with industry and key stakeholders to change attitudes to mediation and embed it as an accepted part of the dispute resolution process
The government will introduce a provision for employment tribunals to levy a financial penalty on employers found to have breached employment rights. This will be payable to the Exchequer. Judges will still have discretion about whether to exercise the power so that employers are not penalised for inadvertent errors
On compromise agreements, the government will develop a model agreement for use by smaller businesses, consult on a legislative change to enable compromise agreements to cover all existing and future claims, and rename the agreements as ‘settlement agreements’
Subject to consultation, the government will introduce a system of ‘protected conversations’ which will “allow employers to have a conversation about any employment issue with their employees”
The government is consulting on the introduction of fees for bringing a claim in the employment tribunal
A consultation will take place on the introduction of compensated no-fault dismissal for micro-businesses with fewer than 10 employees
The government will consider how it could move to a “simpler, quicker and clearer” dismissal process. This would potentially include working with ACAS to make changes to its code or by introducing supplementary guidance for small businesses
The government will close a loophole in the Public Interest Disclosure Act 1998, which enables employees to blow the whistle about breaches to their own personal work contract
The current body of National Minimum Wage regulations will be merged into a single set of consolidated regulation

GOVERNANCE

The government will set aside an extra £675m for local authorities in England who freeze or reduce their council tax in 2012/13. The devolved administrations will receive additional funding in line with increase based on the Barnett formula
A VAT exemption will be introduced for services shared between VAT exempt bodies, such as universities and charities
The government will extend the current small business rate relief holiday for a further six months from 1 October 2012. The government will also give businesses the opportunity to defer 60% of the increase in their 2012/13 business rate bills as a result of the RPI uprating, to be repaid equally across the following two years. The devolved administrations will be provided with Barnett consequentials to facilitate similar action if they choose to
The government will make a series of commitments in relation to the release of public data across a range of areas. These include linking primary and secondary healthcare datasets, publishing prescribing data, making available train and bus data, and publishing anonymised fit note data
Up to £10m will be provided over five years – with match funding from industry and academia – to set up an Open Data Institute. The institute will help businesses “exploit the opportunities created by the release of public data”
The government will ensure all NHS patients can access their personal GP records online by the end of this Parliament
The government will publish a new procurement arrangement for school information and learning services in spring 2012 “to improve parents’ and pupil’s access to education data and increase competition in provision of learning services”

HOUSING

The Right to Buy will be “reinvigorated” to support social tenants who aspire to buy their own home. This will be achieved by raising the discount to make it attractive. The discount is expected to be set at up to 50%
For each home purchased through the Right to Buy, “the government will provide an additional affordable home”. This will be in addition to plans to deliver up to 170,000 affordable homes through the Affordable Homes Programme
A new build indemnity scheme for builders and lenders will be launched “to stimulate the construction of new homes”. The scheme will enable home buyers to purchase new build houses and flats with a 5% deposit. House builders and the government will help provide security for the loan. The scheme, which will see the government take on a contingent liability up to a maximum of £1bn, “will help up to 100,000 families and young people buy their own home”
A new £400m Get Britain Building investment fund will support firms in need of development finance. “This will help to drive progress on stalled sites which have planning permission and are otherwise ready to start”. A prospectus will be issued to interested developers by the end of 2011
There will be support for new development which could include “modern garden cities, urban and village extensions”. Proposals will be invited from developers and local authorities for new developments that have clear local support
£200m will be allocated to encourage early uptake of the Green Deal for energy efficiency in its initial phase over 2012/13 and 2013/14. This was a commitment given at Budget 2011. Further details will be set out in 2012 and any plans will be subject to state aid considerations
Stamp duty land tax relief for first time buyers will end on 24 March 2012 as planned
As set out in the government’s recently unveiled Housing Strategy, £50m in extra funds will be provided to tackle the worst concentrations of empty homes in areas of low demand

LITIGATION and LICENSING

The government will launch a review of regulators to ensure that enforcement arrangements are “appropriate, proportionate, fit for purpose and risk-based, in order to tackle heavy handed, prescriptive and inefficient enforcement, and build on good practice where it exists”
The Primary Authority scheme will be extended
Sunset clauses will be imposed on new regulators
There will be a move towards greater co-regulation and earned recognition for businesses
The government has accepted the recommendations of Professor Löfstedt’s report on health and safety legislation. It will also seek to go further as part of the Red Tape Challenge.
The government has accepted a number of the recommendations of the Farming Regulation Task Force

PLANNING and PROPERTY AND ASSETS

In response to the Penfold Review, the government will ensure the key consenting and advisory agencies have a remit to promote sustainable development as soon as the National Planning Policy Framework is finalised. “This will ensure that these bodies consider the impact of their decisions on sustainable economic growth and swiftly approve consents when it is appropriate to do so”
Also in response to the Penfold Review, a 13-week maximum timescale will be introduced for the majority of non-planning consents to speed up the consenting process and to give certainty to developers. This timescale will take immediate effect for government agencies
There will be a more effective mechanism for applicants to obtain an award of costs, if there is an appeal against refusal of a planning permission where a statutory consultee has acted unreasonably. This will be introduced in summer 2012. “The government will also improve the performance of the key statutory consultees in responding swiftly to applications”. This will include those bodies bringing forward an improvement plan by spring 2012
More flexibility will be built into the new major infrastructure planning process, particularly in the pre-application phase, by summer 2012, “as part of a light touch review of the process responding to feedback from users of the regime”
The government will ensure that compliance with the Habitats and Wild Birds Directives “does not lead to unnecessary costs and delays to development, while continuing to support the Directives’ objectives”. The government is reviewing the Directives as currently implemented in England by Budget 2012 and is “committed to tackling blockages for developments where compliance is particularly complex or has large impacts”
There will be a review of planning appeals procedures, “seeking to make the process faster and more transparent, improve consistency and increase certainty of decision timescales”. Proposals will be brought forward for implementation in the summer of 2012
There will be consultation on a proposal to allow the reconsideration of those planning obligations agreed prior to April 2012 “where development is stalled”
There will be consultation on proposals to allow existing agricultural buildings to be used for other business purposes such as offices, leisure and retail space
The government will provide approximately £15m to fund up to six pilot Rural Growth Networks “to demonstrate how local authorities and LEPs can use the planning regime and targeted infrastructure investment to support economic growth in rural areas”
See also the Projects and Transport section below

PROCUREMENT

Following on from the publication of forward procurement plans for construction, wider infrastructure, information and communications technology (ICT) and facilities management, the government will publish medium-term plans setting out its procurement needs for other sectors by April 2012
The government will “make better use of pre-procurement dialogue with suppliers to ensure procurement processes are well designed and quickly carried-out, as well as identifying capability gaps in the supply chain that need to be addressed to meet future demand and taking action to remove barriers to growth”
There will be a presumption against the use of the competitive dialogue process “unless it can be demonstrated that it delivers value for money”
The government will complete “all but the very biggest and most complex” procurement processes within 120 working days through introducing the Lean sourcing process from January 2012. Public sector procurers will be trained in how to apply this approach
An industry standards group in the infrastructure sector will examine the simplification of procurement specifications and the removal of unnecessary technical standards. This will report back to the government on initial progress by spring 2012
The government will ensure that “the bundling of contract and sub-contract packages in procurement offers enhanced opportunities for SMEs”
The government will extend the use of Project Bank Accounts as a means of ensuring both certainty and speed of payment to SMEs
To reduce burdens on business, the government will negotiate in the EU for a “radical simplification” of the Public Procurement Directives

PROJECTS and TRANSPORT

There will be £6.3bn of additional infrastructure spending over the Spending Review period. Of this, £1.3bn was announced earlier in the autumn
The Chief Secretary to the Treasury will chair a new cabinet committee on infrastructure. “This committee will show decisive leadership in tackling planning and regulatory delays and addressing key commercial and policy issues, to support the delivery of the 40 infrastructure projects and programmes most critical to growth”
The Regional Growth Fund will be increased by £1bn, plus Barnett consequentials for the devolved administrations. The fund will be extended into 2014/15
There will be commitments to £5bn of capital projects in the next Spending Review as part of the National Infrastructure Plan
Up to £20bn of private sector investment in infrastructure has been targeted through the signing of a memorandum of understanding with two groups of UK pension funds and the establishment of the Insurers’ Infrastructure Investment Forum with the Association of British Insurers
Local authorities will be given more flexibility to support major infrastructure. “As part of its commitment to enable Tax Increment Financing, the government will also consider allowing city mayors to borrow against future CIL receipts where this can make a significant contribution to national infrastructure”
The government will, “subject to affordability”, consider using transparent forms of guarantee to support specific projects where this provides best value for money for taxpayers and users, “recognising that the private sector cannot bear every risk in major new projects”
More flexibility will be built into the new major infrastructure planning process, particularly in the pre-application phase, by summer 2012, “as part of a light touch review of the process responding to feedback from users of the regime”
More than £1bn is to be invested in tackling congestion and improving the national road network. This includes £270m for two new managed motorway schemes to allow use of the hard shoulder at congested times on the M3 and M6
There will be £170m in extra funding for local authority transport projects to enable all the projects in the development pool for the Spending Review 2010 period to go ahead, “subject to them passing the Department for Transport assurance process”. As of 29 November 2011, 20 individual projects had passed this process including the Kingskerswell bypass in Devon, the Lincoln Eastern bypass and Manchester Cross City Bus
The government will invest an extra £50m to be distributed to all local transport authorities outside London through the Integrated Transport Block
£25m will be invested to help bus companies and local authorities in England buy new low carbon buses
More than £1.4bn will be invested in railway infrastructure and commuter links
The increase to Transport for London and regulated rail fares will be limited to inflation, measured using the retail price index, plus 1% for one year from 2012
£100m will be provided to create ten “super-connected” cities, with 80-100 megabits per second broadband and city-wide high-speed mobile connectivity
100% capital allowances will be made available in the Enterprise Zones in Sheffield, the Black Country, Liverpool, Tees Valley, North Eastern, and the Humber