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Key points from the Autumn Statement and Spending Review

Autumn Statement 2015

Chancellor George Osborne has set out the state of the economy in the Autumn Statement and spending plans for the next four years in the Spending Review. Here are the main points:

Spending Review headlines
- Planned £4.4bn cuts to tax credits watered down, with changes to income thresholds and taper rates due in April abandoned
- Office for Budget Responsibility says public finances set to be £27bn better off by 2020 than forecast
- Government expected to borrow £8bn less than forecast as it aims to secure £10.1bn budget surplus by 2020
- Total spending to rise from £756bn this year to £821bn by 2019-20
State spending - as a share of total output - to fall to 36.5% in 2020, down from 45% in 2010
- Overall day-to-day departmental spending to be cut by £20bn, equivalent to 0.8% of total expenditure each year by 2020
- Policing, health, education, international aid and defence budgets protected
- Transport, energy, business and the environment among biggest losers, resource budgets falling by 37%, 22%, 17% and 15% respectively

Housing and local government
- New 3% surcharge on stamp duty for buy-to-let properties and second homes from April 2016, raising about £1bn
- Restrictions on shared ownership to be removed and planning system reformed to deliver more homes
- London Help-to-Buy scheme to offer interest-free loan worth up to 40% of the value of a newly built home
- Plans to hand £2.3bn to private developers to build 400,000 new homes in England
- Local government to keep all revenue from business rates by the end of the Parliament
- Councils to receive extra £10m to help homeless people
- Local government spending, in cash terms, to be same in 2020 as 2015

Business, science, energy and the environment
- 26 new enterprise zones to be created or extended
- Uniform business rates to be abolished, with councils and elected mayors allowed to cut or raise rates under certain conditions
- Councils to keep all business rates income by 2020 with central block grant phased out
Science budget to rise in real terms to £4.7bn
- Apprenticeship levy set at 0.5% of employer wage bill, with £15,000 allowance for eligible firms
- Funding for flood defence to be protected in real terms
- Scheme to develop "carbon capture and storage" technology at power stations axed
- Energy Companies Obligation to be replaced in March 2017 and Renewable Heat Incentive cut by £700m
- Big energy users such as the steel and chemicals industries to be exempt from environmental tariffs

Pensions, savings and personal taxation
- State pension to rise by £3.35 a week to £119.30 next year
- Savings credit to be frozen at current level
- Every individual and small business to have their own digital tax account by the end of the decade

Infrastructure, transport and culture
- Capital funding of transport projects to rise by 50% by 2020
- £250m support for motorways and other roads in Kent to relieve pressure caused by Operation Stack
- Electrification of the Trans-Pennine, Midland Mainline and further sections of the Great Western Railway to go ahead
- Culture department to see funding cut by 5%
- Extra cash for the Arts Council and UK Sport
- Free museum entry to be maintained 

Police, security and justice
- No real-terms cuts in police budgets in England and Wales, with spending to rise by £900m by 2020
- Forces expected to make efficiency savings by sharing resources
- Holloway women's prison in London to close as part of modernisation of estate, including nine new prisons
- Underused courts to be sold off, raising £700m for new technology
- Defence budget to rise from £34bn to £40bn by 2020, with extra cash for the security services
- Overseas aid budget to increase to £16.3bn by 2020, while Foreign Office budget protected in real terms

Welfare and tax credits
- £12bn in targeted welfare savings to be delivered in full but government to breach overall welfare cap in first years of Parliament
- Two-child limit on child tax credit claims to go ahead from April 2017
- Family element of tax credits to be scrapped for new claimants
- Housing benefit for new social tenants to be capped at same level as private sector
- Housing benefit and pension credit payments to be stopped for people who leave the country for more than one month
- Department of Work and Pensions budget to be cut by 14%
- Some job centres to be co-located in council buildings
- Conditions for benefits to be extended to more than one million more claimants

- Health budget in England, currently £101bn, to rise to £120bn by 2020-21
- The NHS in England to get upfront cash injection of £3.8bn next year as part of £8bn added funding between 2015-6 and 2020-2021
- NHS in England expected to make £22bn in efficiency savings while Department of Health resource budget to fall by 25%
- An extra £600m earmarked for mental health services
- Grants for student nurses to be scrapped and replaced by loans
- Cap on training places for nurses scrapped, with goal of increasing numbers by 10,000
- New social care "precept" in council tax of up to 2% to allow local councils to raise £2bn for social care
- Better Care Social Fund to be increased by 1.9%
- £15m raised from charging VAT on sanitary products to be given to women's health charities

- Schools budget in England protected in real terms
- Total education budget to rise by £10bn by 2020
- School funding formula in England to be phased out
- New 30-hour free childcare subsidy for parents of three-and four-year-olds to be limited to those working more than 16 hours a week
- Only those earning less than £100,000 will be eligible for the subsidy from 2017
- Sixth-form colleges allowed to become academies
- Funding for Further Education colleges to be "protected in cash terms"

State of the economy and borrowing
- Growth of 2.4% forecast for 2015-6, unchanged from July's Budget
- Forecast growth in 2016-7 and 2017-8 revised up to 2.4% and 2.5% respectively
- Borrowing forecast to total £73.5bn this year, falling to £49.9bn, £24.8bn and £4.6bn in subsequent years before hitting surplus in 2019-20
- Debt as a share of GDP forecast to fall to 82.5% in 2015-16, before dropping to 81.7%, 79.9%, 77.3%, 74.3% and 71.3% in subsequent years

Source : BBC News  

26 November 2015

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