Blog: Friday 1st November 2024 - Capsticks, Corporate Partner

Key takeaways from the Autumn Budget 2024

Local government is to receive more than £1bn to ‘help deliver essential services’, with at least £600m for social care and £230m to ‘help tackle homelessness and rough sleeping’.

In addition to increasing tax by £40bn, including increases in National Insurance, Capital Gains Tax and Inheritance Tax, and defining debt as “Public Sector Net Financial Liabilities”, Chancellor Rachel Reeves has created capital investment in hospitals, schools, green energy and transport.

The NHS is receiving significant increases in spending, including a £22.6bn increase in the day-to-day health budget. A £3.1bn increase in the capital budget has been confirmed.

The 2024 Budget has confirmed a change in the (self-imposed) fiscal rules regarding how the national debt is calculated, by using an alternative debt metric using Public Sector Net Financial Liabilities (PSNFL) which allows certain financial assets to be taken into account; this has the impact of freeing up £53bn of debt. Rachel Reeves has been careful to reassure the financial markets that four “guardrails” will be in place to ensure spending is well managed (including certainty of capital budgets for five years and greater transparency of capital spending).

Key takeaways

Homes

• £500m boost to the Affordable Homes Programme

• £3bn for Housing Guarantee Scheme

• Existing housing stock will be protected by reducing Right to Buy discounts, so thousands more council homes will remain in the sector

• £25m to deliver 3,000 energy efficient affordable homes

• Local authorities will be able to keep 100% of the receipts generated by a Right to Buy sale

Planning

• Development of a 10 year infrastructure strategy to be published alongside phase 2 of the Spending Review

• £5m to deliver improvements to the planning regime for nationally significant projects and £46m to fund the recruitment and training of 300 graduates and apprentices into planning offices in local authorities

• Liverpool Central to receive investment to deliver up to 2,000 homes

• Capital investment to be increased by £13bn next year

• £1bn to improve safety standards, remediate social housing and remove defective cladding

Education

• £1.4bn for the existing School Building Programme to rebuild over 500 schools in greatest need

• £2.1bn for school maintenance (being £300m more than this year)

• Rachel Reeves has promised a £1bn uplift for special educational needs funding

Transport

• Priority transport schemes:

     -    York – Manchester rail upgrade

     -    East – West Rail (Oxford, Milton-Keynes and Cambridge)

     -    HS2 to run to Euston

• Upgrading at Bradford, Liverpool Baltic and Manchester Victoria stations

• The delivery of the TransPennine upgrade including electrification

• Links between Oxford and Bedford

• The electrification of the Wigan to Bolton line

• £1.6bn to maintain and renew roads

• £975m for aerospace

• £2bn over five years for the automotive sector

• The National Infrastructure and Security Transportation Authority (NSTA) to be operational by 2025

Capital Investment Projects

• Re-forming and expanding the Office for Investment

• Formal launch of Office for Value for Money (OVFM)

• More scrutiny by National Audit Office of Central Projects

• West Midlands and Greater Manchester to receive integrated settlements

• Creation of a National Wealth Fund to catalyse over £70bn of private investment

• £25m investment in the media site in Sunderland

• £500m to drive progress in reliable fast broadband coverage

• Funding towards ongoing core research projects

• Investment in 11 new green hydrogen projects

Conclusion

On the whole, the markets reacted positively to the Budget. Shares in UK housebuilders rose during the speech, oil and gas share prices rose and stock markets have reacted positively.

Labour have positioned the Budget on the basis that the public want to pay for investment in public services and use tax for that purpose. Rachel Reeves concluded by saying: “The choices I have made today are the right choices… to restore stability to our public finances, protect working people, fix our NHS and to rebuild Britain. Now that doesn’t mean the choices are easy but they are responsible.”

For more information please contact:

Tiffany Cloynes, Partner; Jill Anderson, Principal Associate; Chantal Davison, Associate