An invite pinged into my email in-box a fortnight ago announcing that the Prime Minister requested the pleasure of my company at a reception at No 10 Downing St on March 27 'at a reception in support of the Government's policy on the referendums for city mayors.'
What could this entail I thought? The PM must be a pretty busy man what with all these foreign policy crises, meeting President Obama and mopping up after incompetent party treasurers. Surely he has no time to spare sipping Chardonnay (or in his case water) talking to local worthies about obscure constitutional issues of local government.
Well obviously he does because the big guns were rolled out for this event. As I queued at the gates I found myself in front of Lord Heseltine who turned out to be compering the presentations. Upstairs at No 10 the function room was packed with civic and business leaders. Lord Heseltime announced to laughter that he had 'waited for a long time to invite you to No 10.' The Prime Minister then delivered an impassioned speech in favour of elected mayors saying he backed them for three reasons, their accountability to the electorate, their direct link for inward investors and their visible leadership. He also pledged to set up a Cabinet of elected mayors whose first meeting he would chair.
To emphasis that this agenda was strictly cross party there were also speeches from Leicester's Labour mayor Sir Peter Soulsby, the ex-Lib Dem leader of Newcastle Lord Shipley and of course Boris Johnson. Announcing that Lord Heseltine was 'the godfather' of elected city mayors and glancing at the PM Boris added: 'I want to thank Dave for allowing me into No 10.'
On the way out into Downing St in the glorious spring sunshine a crowd ofvisiting schoolchildren thronged around the famous doorway. In front of me Boris wheeled his bicycle down to Whitehall. As he entered it a teacher called out to her brood: 'Look children! It's the London Mayor!'
I guess that proves that rather proves Cameron's point.
Tuesday 27 March 2012
Wednesday 21 March 2012
Watch out for the warning over welfare costs.
Ironically towards the end of the Chancellor's Budget speech news flagged up on the TV that Game, the high street computer games shop chain, was seeking administration with the loss of thousands of jobs. It was a salutory reminder that despite Osborne' s well-crafted and highly political Budget speech, that in the real world the econony remains on a knife-edge, especially out in the regions. With the eurozone growth rate downgraded to just 0.3% this year and the UK's still anaemic projection of 0.8%, the chances of the forecasts going awry are still considerable.
So what does it mean for local government? The Office of Budget Responsibility expects growth to be 2% next year and 2.7% in 2014. The Chancellor says borrowing will be £1 billion less than his forecast last November at £126 billion for 2011/12. - not including the impact of the state taking on the Royal Mail pension fund whose liabilities will be £200 million a year after the initial upfront credit impact of the fund. Public sector net borrowing will fall from its peak of 11.1% of GDP in 2009/10 to 4.3% in 2014/15. Borrowing in 2010/11 was £137 billion, £9 billion lower than forecast in the 2011 Budget. The elimination of the structural deficit by 2016/17 remains on course. The Budget claims that 40% of the cuts announced in the 2010 Spending Review will be achieved by April 2012 and that government departments will actually underspend by £6 billion in 2011/12 - a figure that definitely needs more scrutiny. As usual with Budgets beware of smoke and mirrors.
The growth agenda remains a key plank in government policy with an extra £270m for the Growing Place Fund, a new Pension Infrastructure Platform owned by pension funds which will deliver its first £2 billion of investment next year, £150m announced in TIF money for cities and the pilot 'earn back' fund for Manchester city region with the rest of the core cities being examined this year. Regional pay variations may be introduced to some Whitehall departments but not local government. The increase in the tax allowance to £9,205 from 2013 will be good news for low-paid council staff. Doubtless chief executives on salaries above £150,000 will be quietly celebrating the drop in the top tax rate to 45% from then - but will Eric Pickles insist they hand it back to their councils?
What however is especially interesting in the Budget is the commentary about welfare reform. Osborne expects the new Welfare Reform Act to deliver savings of £4.5 billion by 2014/15 but his speech warned that if welfare continued to rise - it is already a third of all government spending - there could be as much as £10 billion that would need to be cut from it. Watch this space.
Overall, the underlying economy remains fragile but the Budget is politically canny, obscuring the reality of the real world with modest tax cuts and tax tweaking with populist measures like the tax on company-owned properties. For local government and the public sector I'm afraid it is business as usual.
So what does it mean for local government? The Office of Budget Responsibility expects growth to be 2% next year and 2.7% in 2014. The Chancellor says borrowing will be £1 billion less than his forecast last November at £126 billion for 2011/12. - not including the impact of the state taking on the Royal Mail pension fund whose liabilities will be £200 million a year after the initial upfront credit impact of the fund. Public sector net borrowing will fall from its peak of 11.1% of GDP in 2009/10 to 4.3% in 2014/15. Borrowing in 2010/11 was £137 billion, £9 billion lower than forecast in the 2011 Budget. The elimination of the structural deficit by 2016/17 remains on course. The Budget claims that 40% of the cuts announced in the 2010 Spending Review will be achieved by April 2012 and that government departments will actually underspend by £6 billion in 2011/12 - a figure that definitely needs more scrutiny. As usual with Budgets beware of smoke and mirrors.
The growth agenda remains a key plank in government policy with an extra £270m for the Growing Place Fund, a new Pension Infrastructure Platform owned by pension funds which will deliver its first £2 billion of investment next year, £150m announced in TIF money for cities and the pilot 'earn back' fund for Manchester city region with the rest of the core cities being examined this year. Regional pay variations may be introduced to some Whitehall departments but not local government. The increase in the tax allowance to £9,205 from 2013 will be good news for low-paid council staff. Doubtless chief executives on salaries above £150,000 will be quietly celebrating the drop in the top tax rate to 45% from then - but will Eric Pickles insist they hand it back to their councils?
What however is especially interesting in the Budget is the commentary about welfare reform. Osborne expects the new Welfare Reform Act to deliver savings of £4.5 billion by 2014/15 but his speech warned that if welfare continued to rise - it is already a third of all government spending - there could be as much as £10 billion that would need to be cut from it. Watch this space.
Overall, the underlying economy remains fragile but the Budget is politically canny, obscuring the reality of the real world with modest tax cuts and tax tweaking with populist measures like the tax on company-owned properties. For local government and the public sector I'm afraid it is business as usual.
Tuesday 20 March 2012
Osborne's Budget 2012 is not what he had planned
A picture in yesterday's papers shows an unshaven, bleary-eyed George Osborne jogging around St James' Park, Westminster, at the start of another long day. It is safe to say that the Budget was uppermost in his mind. Doubtless too, he would have been ruminating about Harold Macmillan's famous warning that 'events, dear boy' have a habit of upsetting the best laid plans of government.
According to the original plan outlined in 2010 by now Osborne ideally should have been standing up on Budget Day announcing that his plans were on course to meet their original 2015 targets. Of course they are not as we know thanks to external events like the euro-crisis and high inflation, as was flagged up in the Autumn Statement last year. The deficit-reduction targets have stretched into 2016/17, a year which many in the public sector now fear could be another cliff-edge drop in public spending, coming as it does after a general election.
The reality is no one, least of all Osborne, knows where the economy is heading. The original deficit-reduction targets are out the window though deficit reduction as a strategy ploughs on. The Chancellor is at the mercy of international events, gleaning hope from latest growth figures in the US or the settlement of the Greek crisis or even changes to growth forecasts in China. The Treasury will put a gloss on the figures - a tweak to the tax regime here, slightly improved public sector borrowing figures there, icing on the cake. But in the real world the UK economy, after two years of coalition economics, is becalmed.
According to the original plan outlined in 2010 by now Osborne ideally should have been standing up on Budget Day announcing that his plans were on course to meet their original 2015 targets. Of course they are not as we know thanks to external events like the euro-crisis and high inflation, as was flagged up in the Autumn Statement last year. The deficit-reduction targets have stretched into 2016/17, a year which many in the public sector now fear could be another cliff-edge drop in public spending, coming as it does after a general election.
The reality is no one, least of all Osborne, knows where the economy is heading. The original deficit-reduction targets are out the window though deficit reduction as a strategy ploughs on. The Chancellor is at the mercy of international events, gleaning hope from latest growth figures in the US or the settlement of the Greek crisis or even changes to growth forecasts in China. The Treasury will put a gloss on the figures - a tweak to the tax regime here, slightly improved public sector borrowing figures there, icing on the cake. But in the real world the UK economy, after two years of coalition economics, is becalmed.
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