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How will the 2017 budget affect you?

How will the 2017 budget affect you?

Budget 2017 – 22nd November 2017

Overview

  • OBR forecast – an additional 600,000 people in work by 2022, and 1.4% GDP growth in 2018. Borrowing is £49.9bn this year – £8.4bn lower than spring prediction. Borrowing will fall each year in the coming years
  • £3bn for Brexit – with more available if needed.
  • An additional £10bn in capital investment for the NHS over the course of this parliament to support the STPs.
  • Additional £2.8bn for the NHS in England up to 2019/20. £350m immediately, £1.6bn in 2018/19 and the balance, £0.9bn, in 2019/20.

  

NHS 

The Chancellor announced a winter bail out for the NHS of £350m immediately, a familiar and controversial figure from the referendum campaign, £1.6bn in 2018/19 and around £0.9bn, in 2019/20. Extra funding next year will be £3.75bn in total. He also pledged an additional £10bn in capital investment for the NHS over the course of this parliament to support STPs – around £2.2bn a year, which may be weighted towards the beginning of the period.


Business rates

The only change around business rates was the Chancellor brought forward the move from Retail Price Index uprating to Consumer Price Index (CPI) uprating. Business rates uprating will go to the lower CPI inflation index in 2018 rather than 2020, which will save businesses around £240m in 2018/19 and £530m in 2019/20.


SMEs

The National Living Wage will increase from £7.50 to £7.83 per hour, and the Government has accepted the Low Pay Commission’s recommendations on the National Minimum Wage rates, including for young people. The Chancellor announced an ‘Action Plan’ to unlock £20bn of new investment in UK scale-up businesses, including through a new fund in the British Business Bank, seeded with £2.5bn of public money.


Northern Powerhouse

The Chancellor said the Government backs the Northern Powerhouse, the Midlands Engine and the Metro Mayors. There will be a new £1.7bn transforming cities fund to be divided between six areas with Metro Mayors – with the rest to be open to competition. There will be money for rail improvements and there will be improved mobile reception on rail routes including Trans-Pennine.


Whilst we appreciate the small increase in the personal allowance there is little in this budget that meets the aspirations of our members.

There was an opportunity for the Chancellor to spell out exactly how the Government will deliver a pay award for NHS staff. Unfortunately Philip Hammond only suggested that he would provide funding for the Pay Review Body’s recommendation. The Society has had concerns over the Pay Review Body’s recommendation due to the Government’s influence on the parameters of any award and the failure of Wales and Northern Ireland to implement the award in full. We are pleased to note that pay rises for NHS staff would not come from front line clinical budgets. 

The extra funding for the NHS is much needed however the £2.8bn over three years does not meet the demands of an extra £4bn that was requested for NHS England by independent experts. Simon Stevens, NHS England CEO, said that without action, waiting times for key services would increase. The additional funding of £350m for this winter equates to just over £1 million per trust in England. We wait to see what the devolved countries do with their additional funding before commenting further. (worth noting – traditionally the health budget received an extra 4% above inflation however since 2010 it has been close to 1% so this extra does little to improve that. We also note that the Chancellor managed to find £3bn over the next two years to prepare for Brexit.

Overall, we believe this was a missed opportunity to help those in the public sector and in small business.




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