Lib Dem £28.6 million school boost

School childrenDisadvantaged primary school pupils in Surrey are set to receive £28.6 million to boost attainment, the Liberal Democrats have announced.

The Pupil Premium funding for 2015/16 will help teachers to support those children at most risk of falling behind their colleagues.  It means primary schools will receive £1,320 for every school pupil who has registered for free school meals at any time in the last six years.

Evidence shows that raising the attainment of pupils by the end of primary school has a direct impact on future exam results.

The pupil premium will get extra money to schools in Surrey,targeted at the children who need it most. The whole class benefits when fewer children are struggling.

Tories slash Surrey education funding by £250 million

HeathsideConservatives will cut the education budget by £253 million in Surrey by 2020 if they were in national government on their own, official research shows.

The Tories would be forced to slash local spending on schools,colleges, and nurseries to keep pace with George Osborne’s plan to drastically reduce spending.

The research, based on official House of Commons library figures, shows schools will bear the brunt of Conservative cuts but childcare, college and early years budgets would also be hit hard.

Unlike both Labour and the Conservatives, the Liberal Democrats are committed to protecting cradle to college education spending.

Highest employment ever

UnemploymentIt has taken some hard choices – and the remarkable effort of millions of people and business around the country – but this marks another positive step on the road to a stronger economy.
There are two million more people in private sector jobs, fewer unemployed young people, long term unemployment is falling and we have more women in work than ever before.

The only way we have been able to play our part in turning the economy around is by taking the long view.  Back in 2008-09 who would have thought the Britain would have the highest growth in Europe (bar Iceland) and the seven highest in the OECD (after Chile, Iceland, Israel, Mexico, New Zealand and Turkey).

But, in my view, we have a long way to go.  Part of the solution is to ensure that any government at the national level is elected with the majority of the voters.  It is unlikely that the recovery would have happened if the Liberal Democrats had not stepped up to provide Britain with a strong and stable government in tough times.  The coalition was elected with 59% of the vote.  There has not been a British national government elected with a backing of over 50% of the vote since the 1930s.  Indeed, in peacetime the present coalition was elected with more support than any other government since the Liberal landslide in the 1860s under Gladstone.

British voting since 1832

Elmbridge Budget

Next Wednesday, Conservative-led Elmbridge plans to decrease the council tax in real terms for next year by keeping the rate the same. Prudent stewardship or a gradual collapse into private wealth and public squalor?

National government taxes like: income tax, national insurance, VAT and corporation tax increase each year automatically in line with either income or prices (unless income or prices fall) – known to economists as fiscal drag.

But the single tax supporting local government – council tax does not. So if council tax is not adjusted each year then it gradually falls – it does not keep up with prices or salaries.

So, oddly, if you want council tax to fall in real terms simply don’t change it.

The whole situation is greatly affected by the extra freeze grant that the national government hands out to local government to encourage no increase in the council tax rate. This grant is powerful because if Elmbridge raised the council tax by just 0.1% it would mean a total loss of the grant.   And this year the coalition guarantee the freeze grant for two years in succession (to get them past the national elections in 2015.  What a way to run the country!

What’s your view?

Key Highlights from the Autumn Statement

Local Government Funding
While the chancellor has announced new, further departmental savings for departments, local government has been largely protected. The chancellor has said this is to encourage local governments to take up the national government’s offer of a council tax freeze which is again available in the coming financial year.

There will be a new national council tax discount of 50% for family annexes from April 2014. This will support extended families living together, for example with children saving for a new home or elderly parents (who would not otherwise qualify for the existing exemptions). It will be fully funded by the national government.

New Homes Bonus
Following the consultation carried out over the summer and in light of some powerful arguments made by colleagues in local government, the national government has confirmed that it will not pursue the proposal to top slice the NHB receipts for Local Enterprise Partnerships for councils outside London. The £2 billion Local Growth Fund will be made up from other decentralised budgets.

Cutting business rates and helping local shops
A series of measures have been announced to continue to prioritise small businesses and local growth. This includes:

  • The planned 3.2% RPI increase for 2014-15 will be reduced to 2%. There will be a £1,000 discount for all retail, pubs, cafes (excluding banks and betting offices) with rateable values below £50,000 for 2 years.
  • The doubling of Small Business Rate Relief will continue for a further year. Ratepayers will continue to keep their Small Business Rate Relief entitlement for a year where they take on a second property,
  • New occupiers of former retail premises which have been unoccupied for a year will receive a 50% discount for 18 months.

There will be a consultation on reforms to the business rates appeals process and a commitment to clear 95% of the September 2013 backlog of appeals before July 2015.
It has been reported that local governments will be fully refunded for the loss in revenue resulting from these changes.

Increasing funding for housing
A number of new measures to support house building were announced. This includes a £1 billion, six-year investment programme to fund infrastructure to unlock new locally-led, large housing sites. This will support the delivery of around 250,000 houses. More is being done to support Right to Buy; introducing agents help buyers complete their purchase, and a £100 million fund to improve applicants’ access to mortgage finance. There is also the intention to consult on a Right to Move for social tenants wanting to take up work or training in another area.

Announcement referred to a review into the role of local governments in supporting overall housing supply. Accompanying this, the national government has announced a limited increase in Housing Revenue Account borrowing.

The additional £300 million will be allocated via a competitive bidding process with support given to local governments which can produce good business cases, agreed by their local enterprise partnership, that bring in local authority owned land and other forms of cross-subsidy such as sales of high value vacant property, raising funds to provide more overall homes.

Delivering savings from cutting fraud
Alongside the roll of the Single Fraud Investigation Service, DCLG and DWP are investing in local government’s capacity to tackle non-welfare fraud. This package of support will include extra funding over 2014-15 and 2015-16 which will be able to support new fraud investigator posts in councils focussed on tackling corporate fraud.

£538,500 for pupils in Surrey catch-up

This week the national government has paid over half a million pounds to Surrey schools for children in year seven who didn’t reach the expected level in their reading, writing or arithmetic when they finished primary school.  This will fund catch-up classes and individual tuition.  Heathside will get £12,000 for the 24 children concerned.

National Government reduces Elmbridge funding

15 January.  As you might know, the burghers of Elmbridge, per person, are one of the highest contributors of tax to the national government.  Some of this tax is returned to Elmbridge but not much.  This is because, on average,  we are one of the richest people in England.

The national government has just announced that the 2013/14 return to Elmbridge will be  11.4 % cash reduction compared to our 12/13 settlement – so an even bigger reduction if inflation is taken into account. This is certainly not a good outcome for Elmbridge but we assumed the worst and we were only out by £23,000, which is a relief.  So for Elmbridge, whilst it’s not brilliant news – our predictions have been proved right.

The national government plans to reduce the 2014/15 return even further – another reduction of around 12%.  This is much worse than we expected. The provisional figures indicate that Elmbridge will have a £200,000 reduction compared to our forecast. This is bad news as we have to identify another £200,000 worth of savings in addition to the £1,000,000 that we have already identified 2014/15. This large reduction in the returning of our tax 2014/15 is because of:

a) The 6.5 % reduction announced in the national government’s spending review in 2010.

b) The 1% reduction in the return of our tax for 2014/15 announced in the national government’s autumn statement of 2011.

c) A further 2% reduction in the return of our tax for 2014/15 announced in the national government’s autumn statement of 2012.

d) A further planned £300,000,000 being taken for New Homes Bonus.

The national government’s freeze grant for council tax of 1% is only available for 2013/14 and 2014/15.  We have had confirmation that this freeze grant will only be included in the base for two years.

The outcome of the settlement  for 2013/14 shows our strategy of prudence against uncertainty is absolutely right. Gradual increases in council tax levels combined with other revenue sources beyond the national government’s return of our taxes is even more crucial in future and will help us become more financially resilient.