Budget 2016: local government at a glance

User Rept0n1x at Wikimedia Commons

Today George Osborne announced his 2016 budget in the Houses of Parliament. Here, we set out the key announcements impacting local government.


Mr Osborne announced that he would “set schools free from local bureaucracy” and ensure that all schools will be on their way to becoming academies by 2020. Yesterday, Cllr Roy Perry, Chairman of the Local Government Association’s Children and Young People Board, issued the following preemptive statement:

“Ofsted has rated 82 per cent of council maintained schools as good or outstanding, so it defies reason that councils are being portrayed as barriers to improvement. Ofsted has not only identified that improvement in secondary schools – most of which are academies – has stalled, but it has praised strong improvement in primary schools, most of which are maintained.”

The devolution revolution

Mr Osborne announced that new agreements had been made in East Anglia, the west of England and Greater Lincolnshire for devolved regions with elected mayors.

“We’ve agreed a single powerful East Anglia combined authority, headed up by an elected Mayor and almost a billion pounds of new investment. We’ve also agreed a new West of England mayoral authority – and they too will see almost a billion pounds invested locally. And the authorities of Greater Lincolnshire will have new powers, new funding and a new mayor. North, South, East and West – the devolution revolution is taking hold.”

He also stated that new powers over criminal justice would be transferred to Greater Manchester:

“Today I can tell the House that my Right Honorable Friend the Justice Secretary and I are transferring new powers over the criminal justice system to Greater Manchester.”


There were a number of announcements for major infrastructure projects in today’s budget including:

  • a green light for HS3
  • £80m funding for Crossrail 2
  • a plan for a 50m pothole budget
  • £75m for a trans-pennine tunnel

Business rates… or cuts?

Although the Chancellor avoided announcing more direct cuts to local government, he did announce that 600,000 small businesses would be exempt from paying business rates. Whilst this is undeniably good news for small businesses, there will be ramifications for local authorities who are expected to generate their income through business rates in the coming years. Mr Osborne reiterated his commitment to this, saying that “by the end of this Parliament, 100% of local government resources will come from local government- raised locally, spent locally, invested locally.”

Further to this, the Chancellor announced that the Greater London Authority will move to full business rate retention next year, three years earlier than any other authority.

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