Comprehensive Spending Review

Billed as the toughest spending review since the end of the Second World War, George Osborne set out the government’s plans to save £81 billion. Included in the announcement was a reduction in housing benefit, a cut to the DCLG budget of 33% by 2015 and what appears to be the axing of CABE. However, a number of transport infrastructure projects have been given the green light to continue. Perhaps the most significant announcement from the planning point of view was that council funding would be cut by 28% over the next four years. Could this decision be the spark that is needed to generate some enthusiasm from councils to take advantage of the New Homes Bonus? Time will tell, but surely if local authorities remain unincentivised to approve development in this economic climate the New Homes Bonus will never achieve what the Secretary of State intends.

DCLG Budget

·         33% real term budget cut over spending review period (SRP)

·         7.1% annual cut in council budgets for four years

·         £6.7bn in spending to be devolved to local GVT over SRP

·         Capital spending to be reduced by 74% during SRP

·         Ring fencing of Local Authority Grants ended

DCLG Policy

·         Social housing reform promised as well as a pledge to build 150,000 affordable homes during the SRP

·         Councils to get power over Housing Finance System

·         Greater emphasis on sustainable growth and ability for councils to respond to needs of local communities.

·         As stated in spending review: “New presumption in favour of sustainable development”.

·         Pledge to reduce the regulatory burden on the house building industry over the SRP.

·         Introduction of Tax Increment Finance powers to allow councils to fund key projects by borrowing against future increases in locally collected business rates.

·         DCLG will no longer be funding CABE (Commission for Architecture and the Built Environment). As a sponsor body this appears to suggest CABE ceasing to exist.

·         English Heritage Funding will be cut by almost a third which equates to £130 million over the next 13 years.

New Home Bonus Scheme

·         It is hoped that the scheme “will directly reward and incentivise local authorities and local communities to be supportive of housing growth”.

·         The New Home Bonus Scheme will be “equivalent to matching the additional council tax from every new home for each of the following six years”

Infrastructure Scheme

·         £10 billion on road, regional and local transport schemes

·          £14 billion for Network Rail

·          £6 billion for London Underground maintenance

·          Crossraill funding secured

·         Mersey suspension bridge

·         Tyne and Wear Metro upgrades

·         Funding will be stopped for 7 waste PFI projects, saving £3 million by 2014-15 and more in the longer term