The CUT Budget Review A South West Story 2010

Last year, Britain’s deficit was the largest in peacetime history. The state is borrowing one pound in every four that it spends, and every day it costs almost £120 million just to pay the interest on the nation’s debts. The consequences of not acting now are serious: all regions across England would be faced with higher interest rates, business failures, rising unemployment and even potentially the end of the recovery .

It is imperative that this debt is set on a sustainable downward path.

This Spending Review promotes long-term economic growth, as well as wider reforms to enable a private sector led recovery, it improves fairness by supporting the most vulnerable, and gives people the freedom to better themselves and their families in the future.

The Government is committed to rebalancing the economy. In particular, it is determined to remove barriers and provide focused support to ensure that all places can realise their growth potential by:

• Supporting appropriate infrastructure;
• Stimulating private sector growth in all regions; and
• Providing local areas with incentives and powers through devolution.

Supporting infrastructure

This Spending Review supports investment in infrastructure that underpins economic growth. Thriving cities and urban areas will be critical to the success of the private sector, and will increase the UK’s resilience to economic shocks.

For the South West, this Spending Review confirms that the following capital programmes will be supported:

• Yeovil - £32 million support for Augusta Westland civil rotorcraft design & manufacture;
• M4/M5 – hard shoulder running and variable speed limits north of Bristol;
• Poole bridge – new bridge providing link to key development sites; and
• Weymouth 2012 package – an integrated transport package to be delivered in time for the Olympics

Stimulating private sector growth
The Government has set in place a number of important initiatives to support growth across the English regions, including those with a recent track record of below average economic performance. The Local Growth White Paper to be published shortly will outline in more detail key initiatives to support growth locally and in the regions, including:

• £1.4 billion Regional Growth Fund over 2011-12, 2012-13, and 2013-14. This will provide support for projects that offer significant potential for sustainable economic growth and can create new private sector employment, particularly in those areas currently dependent on the public sector, helping them to make the transition to private sector led growth and prosperity;

• Tax Increment Financing, which will enable local authorities, including potentially those in the South West, to borrow against locally raised business rates; and

• Local Enterprise Partnerships (LEPS) which will provide the strategic leadership in areas and set out local economic priorities. LEPs will play a pivotal role in delivering the Government’s aim for an economy “rebalanced” towards the private sector.

Providing local areas with incentives and powers through devolution
The Government is clear of the need to encourage and incentivise growth in all regions, and ensure that local communities benefit from these actions. This Spending Review outlines how the Government will devolve power to Local Government, giving greater control over its spending, reducing excessive bureaucracy and regulations:

• In total, local authorities will have greater control over more than £7 billion of funding from 2011-12 which is moving into Local Government formula grant, being unringfenced or is new funding for the SR10 period, so enabling them to better meet local communities’ needs.

• Reducing barriers to effective joint working by establishing the first Community Budgets in 16 local areas, including Swindon, from April 2011. Pooled departmental budgets will help councils and their partners to work together to support families with complex needs. All places may be able to operate these approaches from 2013-14.

The Chief Secretary to the Treasury, Danny Alexander: 
‘The consequences of not acting now would be disastrous. We would be faced with higher interest rates, business failures, more job losses and even potentially the end of the recovery. So, we have to be brave and tackle it now. Delaying decisions would mean even more money wasted on debt interest, and so even bigger cuts in the end.

‘Instead the choices we make will invest in the future - to give everyone the opportunity for a fair start in life regardless, of their background. By being tough on waste and welfare, we are  able to find money for the services that really matter - giving children a good start in life, supporting the NHS, and caring for older people. 
’

 

Comments (1)

Andre Oct 25, 2010 04:50 PM

Or to express this in another way, we need to collect £1 additionally in public income on every £3 currently collected to meet the cost of public provision this additional pound would, drive social and economic growth for the public economy; upon which the private sector is reliant for much of its consumer led profits. In the southwest Over 158,000 families are on waiting lists for social housing and with big cuts in housing investment this figure looks set to climb sharply. Across the South West, only 11 of the 300 most deprived areas are classified as rural. However, 90,300 people of working age in rural areas are receiving some form of DWP benefit – one quarter of all such claimants across the South West. In other words, the ‘rural share’ of deprivation in terms of people (25% of all working-age people receiving benefits in the South West live in rural areas . This is six times larger than the ‘rural share’ of deprivation sited, in terms of areas only 4% of deprived areas in the South West were rural. In reality communities throughout the South West are facing serious challenges with:

• the most elderly population in England,dependant on our public economy
• the highest level of inward migration,
• the most people living outside urban areas, were it is difficult for people to get to training, jobs and services
• low levels of income (as well as the biggest spread in income disparities between different parts of the region),
• the highest proportion of people doing part time jobs and of those with second jobs,
• the most unaffordable housing outside London and
• the least energy-efficient housing stock.In addition the South West has pockets of urban deprivation to match anywhere in the UK

More broadly the impact of welfare and public sector cuts hit women and BME communities harder in this new fair society, 40% of the public sector is staffed by women, the working class and people from ethnic minority communities. These cut's are crude and counter productive, they do not take in to consideration the variation in local conditions, the end result being that the poorest are asked to carry the burden of a publicly funded budget, that protects the profits of the richest in society