2014 Budget: implications for public sector lawyers | Practical Law

2014 Budget: implications for public sector lawyers | Practical Law

A legal update on the 2014 Budget announcements of interest to public sector lawyers.

2014 Budget: implications for public sector lawyers

Practical Law UK Legal Update 1-561-2725 (Approx. 6 pages)

2014 Budget: implications for public sector lawyers

Published on 19 Mar 2014United Kingdom
A legal update on the 2014 Budget announcements of interest to public sector lawyers.

Speedread

On 19 March 2014, the Chancellor, George Osborne, made his Budget Statement to the House of Commons.
The statement included various policy announcements of interest to public sector lawyers, for example:
  • Funding to promote house building and regeneration.
  • Funding to repair flood defences and potholes.
  • Expansion of the Troubled Families programme to help an additional 40,000 families in 2014-15.
  • A number of new housing initiatives, for example to enable private house-building (a right to build) and social housing tenants to move for work (a right to move).
For details of all of Practical Law's Budget coverage, see the 2014 Budget landing page.
On 19 March 2014, the Chancellor, George Osborne, made his Budget Statement to the House of Commons.
This update covers the announcements of most interest to those working in public sector organisations. For details of Practical Law's Budget coverage, see the 2014 Budget landing page, which will be updated to include further commentary on the 2014 Budget from leading practitioners.

Specific policy announcements of interest to public sector lawyers

Announcements of interest to those in the public sector were made in the following areas.

Public sector efficiency

  • HM Treasury and the Cabinet Office Efficiency and Reform Group will continue to make savings by driving efficiencies and reducing wasteful expenditure. In 2014-15 these savings will amount to £20 billion a year compared to 2009-10.
  • Pay awards for most public sector workers will be limited to 1%. The government is making good progress to remove progression pay in the civil service by 2015-16. A pay bill control pilot will run in DEFRA and the Intellectual Property Office.
  • New employer contribution rates will be introduced for the Principal Civil Service Pension Scheme, the NHS Pension Scheme, and the Police Pension Scheme from 1 April 2015 and the Teachers' Pension Scheme from 1 September 2015.
  • The government has identified land and property to generate £5 billion of receipts to support growth and drive efficiency. This is in addition to the £3.5 billion of land and property already identified by departments and a forecast additional £1.5 billion that will be identified through ongoing operational reviews.
  • The Government Property Unit will increase its work with local areas on better use of public sector assets linking with Growth Deals, and building on the Strategic Land and Property Review.

Vulnerable people

  • The government will expand the Troubled Families programme to work with an additional 40,000 families in 2014-15.
  • The government will launch a seminar series by HM Treasury to engage with key stakeholders on reshaping public services to reduce waste and complexity in public services. Measures may include better support for: helping the unemployed into work, vulnerable children and young people, people with mental health problems and the criminal justice system, while continuing to drive down costs.
  • Welfare spending is capped for the years 2015-16 to 2018-19 in line with the OBR's forecast. Spending on state pensions is excluded from the cap.

Environment

  • The government is providing £140 million of new funding to repair and restore the condition of vital flood defences that have suffered damage.
  • An extra £200 million of emergency funding will be available across the UK for a potholes challenge fund to enable local authorities to repair up to 3.2 million potholes following severe weather.
  • The standard and lower rates of landfill tax will increase in line with the RPI, rounded to the nearest 5 pence, from 1 April 2015. The government will introduce a loss on ignition testing regime on fines (residual waste from waste processing) from waste transfer stations by April 2015. Only fines below a 10% threshold would be considered eligible for the lower rate. Full proposals will be set out in a consultation document later in 2014. The government intends to provide further longer term certainty about the future level of landfill tax rates once the consultation process on the testing regime has concluded.
  • The value of the landfill communities fund for 2014-15 will be reduced to £71 million. As a result, the cap on contributions by landfill operators will be amended to 5.1%. This reduction takes account of progress that environmental bodies have made to address the government’s challenge to reduce unspent funds. The saving will be used to fund an equivalent one-off increase to address waste crime.

Housing

  • The government will create a £500 million Builders Finance Fund to provide loans to developers to unlock 15,000 housing units stalled due to difficulty in accessing finance.
  • The government will consult on a "right to build" giving people who want to build their own home a right to a plot from councils, and a £150 million repayable fund to help provide up to 10,000 serviced plots for custom build.
  • The government will consult on a "right to move" for social tenants to increase their mobility for work-related reasons.
  • A £150 million fund will be established to kick start the regeneration of housing estates through repayable loans. Bids will shortly be invited from private sector developers working with local authorities on estates that might be able to benefit.
  • The government will support a new garden city at Ebbsfleet with capacity for 15,000 new homes. The government will also publish a prospectus by Easter 2014 setting out how local authorities could develop their own, locally-led proposals for bringing forward new garden cities.

Planning

  • The government will continue to improve and streamline the planning system. To support businesses and households, it will review the General Permitted Development Order (SI 1995/418 (as amended)), including consulting on creating a much wider "retail" use class, excluding betting shops and payday loan shops. The refreshed approach is based on a three-tier system to decide the appropriate level of permission, using:
    • Permitted development rights for small-scale changes.
    • Prior approval rights for development requiring consideration of specific issues.
    • Planning permission for the largest scale development.
As part of this, the government will consult on specific change of use measures, including greater flexibilities for change to residential use, for example from warehouses and light industry structures, and allowing businesses greater flexibilities to expand facilities such as car parks and loading bays within existing boundaries, where there is little impact on local communities.
  • The government will shortly publish the outcome of its consultation on the Nationally Significant Infrastructure planning regime, including a series of measures to streamline and improve the process.
  • The government has also published further analysis of the extent and nature of the potential financing opportunities in UK infrastructure.

Local growth

  • The government will increase the Public Works Loan Board's current lending limit of £70 billion up to £95 billion to enable local authorities to continue to borrow.
  • Business rate discounts and Enhanced Capital Allowances will each be extended by three years as an incentive for new and expanding businesses to locate in Enterprise Zones.
  • The government will take forward a Wales Bill that will devolve new tax and borrowing powers to Wales, enabling the Welsh government to raise more of the money it spends and providing it with further tools to support growth in the Welsh economy. In addition, the Welsh government can use existing borrowing powers to invest in the M4.
  • The government will commit £100 million to Greater Cambridge until 2019-20 to support transport and infrastructure proposals through a gain share mechanism.
  • The government is in discussion with Glasgow on the development of a city deal.
  • Proposals to extend the Gospel Oak to Barking line to Barking Riverside will be developed to unlock up to 11,000 new homes.
  • The government will consider proposals with the GLA for the Brent Cross regeneration scheme.
  • As announced in Budget 2013, the government will introduce a package of tax reliefs to support the employee ownership sector.