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No new money for housing in Spring Budget 09/03/2017

The Spring Budget was presented to Parliament by the Chancellor of the Exchequer on Wednesday 8 March. The main headline for local authorities in England was the allocation of £2billion of additional funding over the next three years to spend on adult social care. However, any mention of housing was conspicuous by its absence. 

 

In a Budget that contained far fewer new tax and spending measures than recent previous Budgets, the main announcements were:

 

Tax:

 

  • The main rate of self-employment Class 4 National Insurance contributions to rise from 9% to 10% in April 2018 and 11% in April 2019. The Class 4 rate is currently levied on self-employment profits above £8,060. This change raises between £325 million and £645 million a year.
  • The tax-free allowance for dividend income to be reduced from £5,000 to £2,000 from April 2018. This change raises over £800 million a year from 2019/20. 
  • Local authorities to receive around £300 million over the next three years to provide discretionary support for businesses facing increases in business rates bills following April 2017's business rates revaluation in England.
  • Additional funding of £20-25 million a year to support some businesses that no longer receive small business rate relief after the revaluation.
  • A 25% charge to be introduced targeted at those seeking to reduce the tax payable by moving their pension wealth to another jurisdiction. This change raises around £60 million a year.
  • UK VAT of 20% will apply to mobile phone use by UK residents when outside the EU. Currently VAT is applied when UK residents use their mobile phone inside the EU, but not when outside. The change ensures mobile phone companies cannot use the inconsistency to avoid UK VAT. This change raises around £65 million a year.

 

Spending:

 

  • Local authorities in England to receive £2 billion of additional funding over the next three years to spend on adult social services.
  • NHS in England to receive an additional £100 million in 2017/18 for capital investment in A&E departments. The funding will support up to 100 new GP triage projects.
  • NHS in England to receive £325 million over the next three years to invest in local Sustainability and Transformation Plans (STPs). STPs are locally developed proposals to improve local health and care.
  • £320 million of additional spending this Parliament to extend the free schools programme introducing new schools in England, including selective schools. Over £500 million will be provided in 2021/22.
  • Additional funding for 16-19 technical education in England. New T-levels, offering technical training routes, will be introduced from 2019/20. Around £300 million will be provided during this Parliament.
  • An additional £216 million spread over 2018/19 and 2019/20 for school maintenance.
  • The Scottish Government (£350 million), Welsh Government (£200 million) and Northern Ireland Executive (£120 million) receive additional funding through the Barnett formula.

 

The House of Commons Library has produced a useful summary of Spring Budget 2017 and the Office for Budget Responsibility's forecasts for the economy and public finances.

 

However, in a dramatic U-turn, less than a week after the Budget announcement on changes to self-employment National Insurance Contributions, the Chancellor announced that he would not be proceeding with the measures outlined in the Budget for changes to Class 4 NICs.

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