The Budget 2021

Investment in our local services will be vital for national economic and social recovery.

Last month’s Budget set out plans to provide support for jobs and businesses as we emerge from the pandemic. 

Councils know their local areas best and have delivered for their communities. They must be trusted to lead efforts to rebuild and level up our economy, get people back into work and create new hope for their residents. 

It is good that councils have been placed at the heart of the delivery of new funds such as the Levelling Up Fund and Community Renewal Fund and the LGA looks forward to working with the Government on the detail. 

However, councils are concerned by the prospect of competitive bidding as they want all our resources and energy to be used to support regeneration in our communities.  

Emergency government grants distributed by councils have been a vital lifeline to struggling businesses worried about their future. It is positive that further funding will be provided to support businesses, and councils remain ready to use their local knowledge and expertise to distribute this money quickly. 

We welcome the extension of the furlough scheme, which has been vital in securing jobs that otherwise may have been lost. Going forward, it will be crucial to ensure people seeking to re-enter the labour market get the local support, advice and training they need to face the future. 

Councils stand ready to work in partnership with the Government to shape and redesign its Plan for Jobs initiatives, such as Kickstart and Restart, so they are effective locally.  

Many households could be economically vulnerable for some time, so we are pleased that the Chancellor announced an extension to the £20-a-week universal credit uplift. This must be kept in place for as long as it is needed so that households are not pushed into financial hardship because of vital support being withdrawn. 

We were disappointed the Budget contained no mention of adult social care or children’s services. The Government must urgently bring forward its proposals for adult social care, including a clear timetable for reform, so that we can finally put the sector on a sustainable footing. 

We also continue to emphasise the need for additional funding for child and family support services. As a starting point, returning the Early Intervention Grant to 2010/11 funding levels by providing an extra £1.7 billion would enable councils to reinstate some lost preventative and early help services.  

The Budget included some welcome investment to reduce carbon emissions, but councils want to see further progress if we are to unlock the significant opportunities renewable energy infrastructure can provide, particularly in the green growth sector and in job creation. 

Councils continue to lead local efforts to protect lives and livelihoods from COVID-19 but still face substantial cost pressures and income losses. 

The Government has provided a significant financial package of support for councils in response to the COVID-19 pandemic, but the ongoing financial impact and unpredictability of the crisis means this support must be kept under review. 

We continue to call on the Government to meet all cost pressures and income losses incurred by councils as a result of the pandemic. 

Public finances are undoubtedly under huge strain, but investment in our local services will be vital for our national economic and social recovery. 

Alongside providing a multi-year settlement in 2022/23 to put councils on a long-term sustainable footing, bringing power and resources closer to people is the key to improving lives, tackling deep-set inequalities and building inclusive growth across the country. 

Domestic abuse

  • Additional £19 million, including £15 million across England and Wales, to increase funding for perpetrator programmes.

The LGA says: “This is a welcome emphasis on the importance of addressing perpetrators’ abusive behaviour and preventing domestic abuse from occurring in the first place.” 

Towns Fund

  • More than £1 billion from the Towns Fund for a further 45 Town Deals across England.

The LGA says: “This additional funding will help many places adapt their town centres and ensure they remain vibrant hubs for businesses and socially.” 

Business support

  • 100 per cent business rates relief for retail, hospitality and leisure properties in England to continue until 30 June, followed by 66 per cent relief (subject to caps) to 31 March 2022.
  • ‘Restart’ grants of up to £6,000 per premise for non-essential retail businesses and up to £18,000 per premise for hospitality, accommodation, leisure, personal care and gym businesses.
  • Additional £425 million of discretionary business grant funding for local authorities in England.

The LGA says: “We welcome further grants to businesses affected by the COVID-19 pandemic and the additional discretionary business grant funding.” 

Levelling Up Fund

  • Launch of prospectus for £4.8 billion Levelling Up Fund – for infrastructure that improves everyday life, including town centre and high street regeneration and local transport projects. 

The LGA says: “It is good that councils have been placed at the heart of delivering the Levelling Up Fund… but we are very concerned by the prospect of competitive bidding.”

Community Ownership Fund 

  • New £150 million fund to help communities buy local amenities, such as pubs, sports clubs, theatres and post office buildings, to run as community-owned businesses.

The LGA says: “We agree with the principle of empowering communities to take responsibility for their community assets where they might otherwise no longer be available for community use.”

Mental health

  • Additional £3 billion to support the NHS recovery in England, including tackling waiting times for mental health services. 

The LGA says: “Councils’ mental health services and wider public health responsibilities need parity of funding with NHS mental health services, so they can help the whole population to be mentally healthy.”

Workforce, jobs and skills

  • Furlough scheme extended to end of September.
  • ‘Plan for jobs’ includes more job coaches.
  • Increase in payments to employers who take on new apprentices.
  • £7 million fund to help employers set up and expand portable apprenticeships.
  • Additional £126 million in England for high quality work placements and training for 16 to 24-year-olds.

The LGA says: “We can help ensure these programmes meet the needs of different places and join up disconnected national schemes at the frontline, so they are more effective.”

Armed Forces

  • Up to £475,000 for Armed Forces charities to support the development of a digital and data strategy. 
  • An additional £10 million for the Armed Forces Covenant Fund Trust, to deliver charitable projects and initiatives that support veterans with mental health needs.

The LGA says: “It is vital that councils continue to receive enough funding to support veterans and their families across a range of services that also affect mental health, including housing, money advice and employment support.”

Welfare

  • Universal credit £20-a-week uplift extended to September.
  • Other uplifts and protections for benefits claimants to continue.

The LGA says: “The national benefits system should provide the principal safety net for low-income households. Local welfare funding should be restored to at least £250 million a year to enable councils to deliver an efficient and sustainable local safety net.” 

Low carbon energy

  • £20 million to support the development of floating offshore wind technology.
  • £68 million UK-wide competition to implement several first-of-a-kind energy storage prototypes or technology demonstrators.
  • £4 million competition for the first phase of a biomass feedstocks programme, to support the rural economy.

The LGA says: “The Budget has not set out any new investment in housing retrofit or infrastructure to reduce the environmental impact of waste and recycling services.”

This is an edited version of the LGA’s ‘Budget 2021: on-the-day briefing’, available at www.local.gov.uk/parliament/briefings-and-responses. The briefing covers in more depth the Budget announcements mentioned here, as well as other announcements, including on business rates, the spending review, COVID-19 and vaccinations, economy and infrastructure, UK Infrastructure Bank, towns and regeneration study, modern methods of construction for housing, flooding, devolution, UK Shared Prosperity Fund, freeports, and homelessness.

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