Spending Reviews, Autumn Statements, Budgets and Queen’s Speeches all have a tendency to throw up lots of little surprises once the detail has sunk in. Things tend to unravel, more details become clear and the wider implications of decisions come to the surface – as does greater clarity on the extent to which ‘new’ money is really new, or re-announced, diverted or brought forward.
Now we’ve had a few days to reflect on the 2015 Spending Review, or the day the Chancellor got his kit on as we like to call it, the relative spending and investment in sport and recreation should still be seen very positively.
Given the cuts in 2010-15, cuts elsewhere and the rumours circulating beforehand, the overall settlement represents a significantly better position that we’d expected to find ourselves in. It represents a recognition at the heart of government of the value of the work that our members and our sector does.
We did flag some notes of caution in our early analysis last week – principally the ‘flat cash’ rather than inflation proofed settlements (though these are still much, much better than they could have been), the cuts to the public health budget and most significantly of all, to local government budgets.
The overall levels of cutting across government were not as great as many had predicted, though this of course masks the fact that with around 55% of spending in protected departments (NHS, schools, defence, international aid) that much greater cuts are required elsewhere to deliver the average.
This has two particular consequences for sport and recreation. The first being that local government in general will feel a major squeeze in this Parliament and secondly, because at a local level sport and recreation are non-statutory services, this means that cuts here are also likely to be greater than in protected areas, especially with rising social care costs.
There will be radical changes to local government by 2020 (with a cumulative drop in between 75-80% in council spending power between 2010-20):
• The grant from central to local government will be removed in aggregate in its entirety by 2020;
• Further powers and responsibilities will be devolved to the local level. There is much to celebrate about this – but it will mean increasingly varied provision and the need to engage with new and multiple decision makers in each local area;
• Business rates (which we’ve covered before) will increasingly be a local responsibility. Note: all growth to business rates can be kept by local authorities moving forward, but there will still be redistribution of current collection between councils (so no council is going bust overnight);
• We know that there could be a major change for CASCs and registered charities if statutory and discretionary budgets for business rate relief are altered – we expect to hear more about this in the 2016 Budget;
• There will be changes to local government contracts, where we would expect higher value, larger contracts to be awarded. This will accelerate if more local authorities combine functions – making bids to run services harder for small organisations;
• Local government will increasingly need to partner, outsource or cut its discretionary spend – especially on capital intensive projects and facilities;
• Councils may well look to sell off higher value assets and land to plug the gap;
• There has been some relaxation on council tax rises – with a rise of 4% rather than the current 2% permissible without a local referendum but only if the additional 2% is ringfenced for adult social care.
My final observation on what happened last week is that the Review did not pan out as many had predicted. Our sector did better than expected – but there were significant ‘U turns’ including on policing and tax credits. This shows that campaigning, and particularly harnessing public opinion works. Thank you again for all of your support for #GetYourKitOn – it really did make a huge difference but the work continues.
Now the dust has settled
