Autumn Statement 2022: Public services need to be on alert to tackle the challenges despite support promised

Whilst there was a clear message that Departments will need to deal with inflationary pressures, an £8.8billion package for the NHS and Social Care through additional funding and additional council tax flexibilities was announced.  This doesn’t provide much guidance to district councils, but, in setting 2023 budgets, all local authorities are going to have to take a serious look at council tax rises combined with how much to draw from revenue reserves to prevent a cavalcade of section 114 notices because of serious concerns on financial resilience.

Social rents will be capped to 7% in 2023/24, which provides financial planning certainty for local authorities and social housing providers regarding social housing revenue income and the impact to households.  On the other hand, it squeezes the funds available for repair and maintenance costs where these are linked to inflation leading to some difficult decisions to be had over the scale, speed, and specification to maintain the quality of social housing stock.

Means tested benefits will rise by 10.1% and £280m has been proposed to tackle benefit fraud and error, where, according to the DWP’s statistic release on 26 May 2022, the estimated value of overpayments in 2021/22 was £8.6 billion.  Reducing this level of overpayment needs to be put firmly in focus to ensure the right amounts are given to the people most in need.

The Chancellor also confirmed a reduced, but continuing investment in capital schemes, such as HS2 and the new hospital programme. He also confirmed round two of the levelling up fund and a set of new devolution deals and refining investment zones. Management capacity to progress devolution deals, deliver on levelling up, and support local investment, against a backdrop of all the aforementioned pressures, is going to be increasingly challenging.

This budget brings back austerity. It has been specifically designed to appease markets and remove immediate threats to the UK economy.  There are clear attempts to provide some stability for public services, to enable them to adapt and build resilient strategies to sustain quality services, but it isn’t going to be easy and there are clear and obvious significant risks to be managed, else we may well see increasing number of organisational failures.