Friday, June 28, 2013

News: Spending Round 2013


The Spending Round 2013 sets out how the government will spend £740 billion pounds of tax-payers' money between April 2015 and April 2016. But what does it mean for Rotherham?

Based on the themes of Reform, Growth and Fairness, the Chancellor of the Exchequer, George Osbourne outlined how the Government intends to need to find £11.5 billion of further savings.

Most Government departments are seeing a cut to their budgets and local councils will see a 10% cut in resource budgets. The impact on Rotherham Council's budget is set to be discussed at a cabinet meeting next week with directors already predicting an indicative funding gap of £19.12m for 2014/15 and £29.275m for 2015/16, even before the spending review this week.

The government's welfare reform is set to impact on the borough and the review announced a cap on welfare spending from 2015 and a seven-day wait before job seekers can claim benefits.

Yesterday, the Chief Secretary, Danny Alexander, outlined the Government's economic infrastructure plan, with specific plans for more than £100 billion of infrastructure projects.

Important to the region's manufacturers, the Nuclear AMRC and the proposed Rolls-Royce nuclear components factory in Rotherham, the proposed new nuclear power station at Hinkley Point is eligible for a "mulitmillion pound" guarantee. The High Value Manufacturing Catapult (of which The AMRC and Nuclear AMRC are key parts), will also be hoping to secure further funding from the proposed investment in research facilities to partner with industry in developing materials and production techniques critical for the UK's manufacturing base and inward investment.

Over £70 billion has been committed to transport projects, including an increase in the budget for the HS2 rail network, that will include a proposed station in South Yorkshire, to £42.6 billion (in 2011 prices) for construction costs and £7.5 billion for rolling stock. Funding is also there for previously announced projects such as the M1 widening in the region and the Bus Rapid Transit (BRT) scheme linking Sheffield and Rotherham.

Enterprise Zones, which include areas of Rotherham such as the AMP and Templeborough, will also be able to bid for a further £150m to support infrastructure and get development going.

Regarding economic development, the Local Development Partnerships (LEPs) have been given a clearer outline of how much Government funding will come under local control. A £2 billion a year Single Local Growth Fund for LEPs has been created that brings together previously announced pots for transport, skills and housing. "£20bn will be under the control of LEPs up to 2020" but it less cash than Lord Heseltine envisaged in his comprehensive economic plan.

From November 2013 LEPs will have access to £1.5bn of cheaper borrowing through the Public Works Loan Board (PWLB), the board used by councils to borrow money at better rates to fund large capital projects.

Also supporting jobs is a "refocused" Regional Growth Fund (RGF) where local projects will bid for a share of £600m in the years 2015-16 & 2016-17.

LEPs are also to be allocated €6.2bn (£5.3bn) of EU Structural and Investment Funds for 2014-20 to boost growth under a simplified "Growth Programme." The Sheffield City Region LEP can expect €203m for 2014 to 2020. Half of what was expected given South Yorkshire's "Transition" status. Local Wentworth and Dearne MP, John Healey called it "outrageous and unjustifiable."

HM Treasury website

Images: HM Treasury


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