This short report was first published as a lead story for our Nouseletter.
On 30 October, Chancellor Rachel Reeves announced significant transformative changes to national fiscal policy.
From the greatest increase in spending since World War Two, with taxes expected to raise by £40 billion – to an ambitious amount of investment into national public services such as the NHS; there is much to anticipate regarding the projected growth the government expects the Autumn budget to produce nationwide.
However, Local Councils still remain under severe pressure, with the burden of financial cuts and lack of funding becoming increasingly paramount. This is not a new phenomenon for York. Currently, the City stands as one of the lowest funded authorities in the country.
So, how will the Autumn Budget affect a City Council already under severe financial strain?
The budget’s key emphasis on investment into public sectors such as healthcare, social care and housing should theoretically ease the pressure on local councils, as the overall standard of living for vulnerable groups, such as elderly citizens, improves.
For example, the carers allowance is set to increase by thirty pounds a week, providing better support. Infrastructure improvements are further expected with a boost in capital spending.
The council has continuously outlined lack of housing as a key area of concern for York Residents, so plans to transform 350,000 homes provides some optimism towards more sustainable housing.
However, in areas not directly boosted by central government funding, such as community programmes and environmental initiatives, Labour’s strategy may intensify existing funding gaps.
Moreover, the budget's hike on taxation, such as on employers national insurance – could negatively affect local businesses in York. For a council severely underfunded, there are clearly areas of concern regarding what is important to local residents and where money has to be spent for balancing purposes.
Small businesses, which dominate York, could face extra bills of up to £150,000 a year. These are mainly due to the budget's "triple whammy" of rising cuts and costs:
- 6.7% rise in the minimum wage to £12.21 an hour
- 13.8% to 15% rise in the rate employers pay national insurance contributions
- The cutting back of post-Covid relief from 75 per cent to 40 per cent, which has driven up business rates.
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