Richard Harbord: Budget pessimism
0
The chancellor has said that the public sector would face more cuts. This, of course, will have surprised nobody.
Those who read Room 151 regularly will remember in my comments on the Autumn Statement and the Spending Review that I did not believe the optimistic assumptions for the economy would hold and suspected by Autumn 2016 the figures would be less encouraging.
Well, I was wrong. The assumptions haven’t even lasted that long. The general feeling is that many economic indicators are going the wrong way.
Part of the problem – as George Osborne points out correctly – is the rest of the world. Commentators calculate that last month the indicators were 0.1% above a world recession.
Obviously, in a world recession there are winners and losers but the maximum normal growth of the winners at such times historically has been 2%. That is not great.
The Spending Review, you will only too clearly remember, started with further cuts and then in the last year ended in a vision of additional resources.
The other little difficulty which I intend to say nothing about is Europe and the referendum. The only point here is that there are going to be three or four months of everyone pussy footing around and not willing to make decisions for fear of their preferred option not being chosen by the public.
Already, you can see a watering down of various government proposals in order not to offend its Brexit position. I imagine the budget will be a fairly vapid affair as well.
Back benchers
Never has it been such a good time to be a back bencher if you want to influence policy (fuel tax may well be an example). This will not be quickly resolved. There will be a considerable healing process in government and perhaps a new Prime Minister.
The budget is supposed to bring further announcements on business rates and may well do so.
There is very little to go on at present but obviously there are still big unresolved issues like the Central List and equalisation.
The recent consultation on appeals was comprehensively attacked by the valuation profession and said to be unworkable and further details of that are still awaited.
There have been actions on the changes to pension funds. The first submissions would seem to show not all pools have reached the necessary minimum. There is, however, until July to make further changes here.
From the view of an outsider the devolution policy does not seem to be going too well and is proving quite difficult in a number of areas. The results of that also impinge on the eventual devolution of business rates.
I have to say that I have always been very opposed to major reorganisation of the structure of local government. It cannot be carried out effectively and quickly. Major upheaval and job changes lead to introspection and a vacuum in policy terms.
Also, I have never been convinced that many reorganisations have actually,made major savings in the long term. That would be difficult to gauge because quality of services is also a factor. However, I am coming more and more to the view that there is no future with the structures that exist now and that we should move to a unitary structure.
Not as many authorities as expected have taken full advantage of the additional precept and council tax availability. One authority at least is cutting council tax.
The future looks very difficult to me even though I am by nature an optimist.
