The 2024 Autumn Budget is likely to be seen as a significant moment in the recent history of local and regional governance in the UK. As the first Budget statement from a Labour Chancellor of The Exchequer in 14 years, it signals a shift in how local growth will be prioritised and delivered. In this LEDC Espresso shot episode David and Mike discuss the implications of this for local economic development and placemaking.
2024 Autumn Budget – the big picture overview
A major policy reset: the 2024 Autumn Budget represents a substantial reset in the UK’s policy direction, diverging sharply from the previous government’s approach. It is characterised by significant increases in spending and borrowing, indicating a shift towards more proactive government.
Details to come: much of the details on resourcing for local activities will be clarified in the upcoming Spending Review (Spring 2025): watch out for new programmes and capital investment aligned with a new UK Industrial Strategy.
Focus on devolution and local governance: the Budget outlines future directions for devolution, local governance, and investment in housing, alongside new City and Growth Deals for areas outside England. This is particularly relevant for regions that have historically engaged less with devolution initiatives.
Increased funding for local government, business programmes, and science – at least in the short-term: both the Department for Business and Trade (DBT) and the Department for Science, Innovation and Technology (DSIT) received significant budget uplifts. Local government is set to experience a large real-terms increase in day-to-day spending next year, a notable change compared to the last decade. But under current plans spending plateaus after the first year.
The demise of UKSPF – at least in its current form: the Budget confirmed what many in our sector had suspected – that major changes are on the way for growth funding, those national pots of money for economic development and placemaking to which local areas have access. The UK Shared Prosperity Fund (UKSPF) will be replaced in its current guise after a year of transitional funding.
Main measures related to economic development
Transitioning from UKSPF
The UK Shared Prosperity Fund (UKSPF) will undergo major reforms, with transitional funding for another year before significant changes to growth funding and local government structures are implemented. The UKSPF will continue for another year at a reduced level of £900 million before broader funding reforms are implemented.
Investment in Housing and Infrastructure
Affordable Homes Programme: An additional £500 million is allocated to build up to 5,000 affordable homes, focusing on social rent.
Planning system reforms: Over £50 million will expedite the planning process, including recruiting 300 additional planners to enhance local authority capacity.
Housing delivery: £47 million will support up to 28,000 homes affected by nutrient neutrality requirements.
Local Authority spending
Core spending power increase: Local authorities will see a real-terms increase in core spending power of around 3.2% in 2025-26, with £1.3 billion of new grant funding.
Homelessness prevention: An additional £233 million will bring total spending on homelessness to £1 billion, aiding efforts to prevent rises in temporary accommodation and rough sleeping.
Devolution and regional growth
Confirmation that the government will publish a Devolution White Paper aimed at ‘streamlining local government structures’, potentially hinting at further unitarisation.
Confirmation of Integrated Settlements for 'trailblazer' MCAs: Greater Manchester and the West Midlands will receive integrated settlements from 2025-26, giving mayors control over a single flexible pot of funding.
Confirmation that Integrated Settlements will be extended to some other MCAs from 2026-27: the North East, South Yorkshire, West Yorkshire, and Liverpool City Region Combined Authorities
Continued funding for Investment Zones and Freeports aims to drive economic growth in underperforming areas.
Industrial strategy
The creation of the National Wealth Fund (NWF) aims to mobilise over £70 billion of private investment into the UK’s clean energy and growth industries, supporting a new Industrial Strategy.
Strategic implications for local leadership
In the episode David and I emphasise the immense work ahead for those in the local economic development sector. With new institutional arrangements and a focus on strategic collaboration, local leaders must engage with these changes proactively. The rollout of pre-existing initiatives like Free Ports and Investment Zones, alongside the Devolution White Paper, presents both challenges and opportunities for place leaders.
The future of pan-regional partnerships
David and I also discuss the future of pan-regional partnerships. While these collaborations can be beneficial, we agree that they must be bottom-up initiatives rather than imposed structures to have an impact. The success of such partnerships hinges on genuine collaboration among local authorities, particularly in areas like transport and infrastructure.
Comments