BUDGET 2012: By practice area

March 23, 2012

Local Government Lawyer highlights some of the key aspects of this year’s Budget for each practice area.

EMPLOYMENT

The Pay Review Bodies are due to report from July 2012 on reforming public sector pay “to better reflect local labour markets”;
A number of civil service departments that entered the pay freeze in advance of other workforces will exit it from April 2012. “These departments will be able to introduce more local, market-facing pay reform from this year”. This will follow further work with the Cabinet Office to develop proposals for local pay;
The Treasury will conduct an internal review looking into the financial barriers to social enterprise;
The Government has accepted the Low Pay Commission’s recommendation for below inflation increases to the adult National Minimum Wage rate to £6.19 per hour and the apprenticeship rate to £2.65 per hour, and to freeze the youth rate. These changes are to take effect from October 2012-03-23.

HOUSING

The Government has published a shortlist of sites to receive £420m of funding through the Get Britain Building Fund. A further £150m is to be provided, which is expected to deliver more than 3,000 homes;
The New Buy scheme – details of which were announced earlier this month – will allow people to buy a new home with a 5% deposit. This is expected to support up to 100,000 households to buy a home;
A “reinvigorated” Right to Buy will be introduced. A higher single cap of £75,000 will replace the current range of regional caps from 2 April 2012. Receipts will pay down the outstanding housing debt on the units sold and replace, on a one-for-one basis, the additional properties sold with new affordable homes for rent;
Sufficient public land has been identified to meet the Government's ambition of disposing land with the capacity to build more than 100,000 homes. A progress report will be published before summer 2012;
The current Housing Revenue Account subsidy system will be replaced with a self-financing model from 28 March 2012. However, the Government will re-examine plans over the amount councils are allowed to borrow from 1 April;
A consultation will be held in 2012 on the regime for Real Estate Investment Trusts (REITs) and specifically on the role they can play in supporting the social housing sector;
£3m will be reinvested each year to double the rate of council tax rebate for military personnel from 50% to 100%;
Local Housing Allowance rates will be frozen from one year from April 2012 (this was previously announced by the DWP in December 2011);
As announced at Budget 2010, from April 2013 Housing Benefit payments to working age social-rented-sector tenants who under-occupy their properties will be limited. Percentage reductions of 14% will be applied to those under-occupying by one bedroom and 25% to those under-occupying by two or more bedrooms (this was announced by the DWP on 14 December 2012);
A cap will be placed on the additional costs of Universal Cap of up to £2.5bn per year will be placed in the next spending review;
The Government is to press ahead with various changes to the implementation of the household benefit cap (announced on 1 February 2012). For example, people who lose their jobs having been in work for the previous 12 months will be exempt from the household benefit cap for a period of nine months;
A consultation will be held on simplifying the CRC Energy Efficiency Scheme to reduce administrative burdens on business. “Should very significant administrative savings not be deliverable, the Government will bring forward proposals in autumn 2012 to replace CRC revenues with an alternative environmental tax."

LICENSING AND COMMUNITY SAFETY

The Government is to set out “a broad package of policies to address the harms associated with alcohol abuse in the forthcoming Alcohol Strategy”;
A consultation will be held on alcohol anti-fraud measures, including the introduction of fiscal marks for beer, supply chain legislation, and a licensing scheme for wholesale alcohol dealers;
Sunday Trading laws will be relaxed from 22 July to 9 September 2012 inclusive to allow retailers to make the most of the Olympics and Paralympics.

LITIGATION AND REGULATORY

The Government will provide up to £325m additional funding for the Department of Work & Pensions to implement its strategy for tackling fraud and error in the benefit system;
84% of health and safety regulation will be scrapped or improved. Some of these measures are set out in the following bullet points;
Legislative change will be introduced in 2012 so that health and safety law will no longer hold employers to be in breach of their duties in civil law “where they have done everything that is reasonably practicable and foreseeable to protect their employees”;
The Health and Safety Executive will be given authority to direct all local authority health and safety inspection and enforcement activity, “in order to ensure that it is consistent and targeted towards the most risky workplaces”. A code based on existing powers will be introduced in April 2013;
The Reporting of Injuries, Diseases and Dangerous Occurrences Regulation (RIDDOR) and its associated guidance will be amended “to provide clarity for businesses on how to comply with the requirements by October 2013”. This will be in addition to the legislative change being made in April 2012 to extend to seven days (from three) the period an employee needs to have taken off work before an injury or accident needs to be reported.

PLANNING, PROPERTY AND THE ENVIRONMENT

The National Planning Policy Framework will be published by the end of March 2012, “coming into force for plan-making and decisions from that point onwards, with appropriate implementation arrangements for local authorities in local plans”;
The NPPF will “refocus planning policy to better support growth, will include a powerful presumption in favour of sustainable development to underpin all local plans and decisions, and will localise choice about the use of previously developed land, ending nationally imposed targets”;
The Government will wok with key statutory consultees to ensure that they support the delivery of sustainable development in line with the NPPF "and are held to account for doing so";
A number of measures will be brought to deregulate and simplify the planning system. A consultation will be held on reducing information requirements and on proposals to amend the Use Class Order and associated permitted development rights, “to make changing the use of buildings easier, for implementation by April 2013”;
New permitted development rights for micro-renewable energy installations will come into force in April 2012;
More details will be published shortly on the 12-month ‘Planning Guarantee’;
Legislation will be brought forward to adjust the scope of Special Planning Procedure in order to remove duplication in the consenting regime for major infrastructure development. Draft revised guidance will be published shortly, intended to “make the regime clearer and easier to use, and to clarify the flexibility that exists in the legislation in respect of pre-application processes, examination rules and in determining the scope of associated development”;
A consultation will be published on allowing the reconsideration of planning obligations agreed prior to April 2010 where development is stalled;
Land auction pilots on public sector land will be taken forward with the aim of having two sites ready for market by the end of 2012;
Environmental regulation will be rationalised (a move already announced by Defra this week). A number of the measures are set out below;
There will be a consultation on simplifying the system for recording waste transfer. An electronic system for registering waste transfer will be developed. The Government will also consider allowing electronically uploaded hazardous waste returns;
A consultation will be held on preventing excessive compliance costs for business from the Waste Electrical and Electronic Equipment Regulations;
Application procedures for environmental permits will be simplified and speeded up;
New statutory guidance on contaminated land will be introduced to focus on high risk land and clarify what land won’t be caught by the contaminated land regime;
Air quality legislation will be simplified and strengthened;
Environment Agency enforcement will be focused on high-risk cases. Trials of auditing by accredited third parties will be taken forward;
A further review of the environmental framework, including guidance and data reporting, will be completed to “make compliance simpler and more consistent without compromising environmental protections”. This will report to ministers by September 2012;
The Government will reduce “the cost, complexity and delay” to businesses that the Habitats Directive can impose by preparing streamlined guidance, setting clearer standards for evidence and improving the customer focus of the statutory bodies;
A Major Infrastructure and Environment Unit will be established to engage at an early stage with nationally significant infrastructure projects on potential Habitats Directive issues, “ensuring evidence plans are agreed upfront and identifying where imperative reasons of over-riding public interest may apply”;
The Government will legislate later in 2012 for increased statutory packaging recycling targets from 2013 to 2017. Targets will increase annually by 3% for aluminium, 5% for plastic and 1% for steel. Glass recycling targets will be split by end use.

PROJECTS AND TRANSPORT

In 2012/13 a 20 basis points discount on loans from the Public Works Loan Board under the prudential borrowing regime will be introduced for those principal local authorities providing improved information and transparency on their locally-determined long-term borrowing and associated capital spending plans;
The Government will also work with the local authority sector to consider the potential for an independent body to facilitate the provision of PWLB lending at a further reduced rate, “to authorities demonstrating best quality and value for money”;
The Growing Places fund will be increased by £270m. This includes £70m for the Greater London Authority;
The Manchester ‘Earn Back Model’ – announced this week as part of a ‘City Deal’ – will see £30m a year provided from 2015/16. This is a new pilot for infrastructure investment;
Up to £150m in tax increment financing will be made available from 2013/14, including through additional funding, to support TIF 2 in core cities. Further details on a competition for allocating funding will be announced later in 2012;
A Major Infrastructure and Environment Unit will be established to engage at an early stage with nationally significant infrastructure projects on potential Habitats Directive issues, “ensuring evidence plans are agreed upfront and identifying where imperative reasons of over-riding public interest may apply”;
A consultation will be published on allowing the reconsideration of planning obligations agreed prior to April 2010 where development is stalled;
A national roads strategy will be developed with a renewed focus on the level of performance expected from the Highways Agency;
A feasibility study will be carried out into new ownership and financing models for the national road network. A report on progress will be published by the Autumn Statement 2012;
The Government intends that in principle Transport for London should receive funding from a locally-retained share of London’s business rates;
Lord Heseltine will lead an independent review of how spending departments and other relevant public sector bodies interact with the private sector, and assess their capacity to deliver pro-growth policies. This will include a benchmarking exercise comparing how other competing economies implement their industrial strategies. The review should conclude in early autumn 2012.

SOCIAL SERVICES

£20m will be made available to the not-for-profit advice sector in 2013/14 and again in 2014/15 “to support the sector as it adapts to changes in the way that it is funded”.