And so, as the dust settles in the debating chamber of the House of Commons, the hard work begins, analysing the detail of today’s Spending Review and Autumn Statement. George Osborne had his fair share of headline announcements – not least his welcome change of mind on tax credits – and John McDonnell made Parliamentary history in his response by quoting from Mao Zedong’s Little Red Book. But what does it all mean for community businesses across the country? Five things stand out.
First, the Chancellor re-affirmed his commitment to social investment, with the announcement of £105 million worth of Social Investment Bonds to help tackle issues including homelessness, poor mental health and youth unemployment (with a particular emphasis on locally designed schemes). At the same time, the Office for Civil Society, which oversees much of this activity, was instructed to reduce its headcount.
Second, on energy policy, Osborne confirmed that “the provision of reserve generating capacity and the generation of renewable energy benefiting from other government support by community energy organisations” would no longer qualify for support under the Enterprise Investment Scheme, Venture Capital Trusts and Seed Enterprise Investment Scheme. Nor would they be eligible for Social Investment Tax Relief when that provision is expanded.
Also on energy policy, we learned that the much-anticipated response to the government’s consultation on Feed in Tariffs “will be published shortly”. No more detail was given – beyond a claim that, if the proposals are implemented as planned, “this will save the average household around £6 and the average small business user £500 on their energy bills in 2020-21.”
Of course, no fiscal policy announcement can avoid saying something about taxation. The reforms to local government finance (both council tax and business rates) are likely to have a significant – but difficult to predict – impact on the shape of local public services and local economic growth. At the national level, the Treasury estimates that reducing corporation tax to 18% will give the UK businesses the lowest tax rate in the G20.
One final area to keep an eye on is around the Right to Contest. The government says it plans to “strengthen existing legislation” that allows local communities to challenge the use of land and property in use by local authorities (not just property that is empty or under-used) where these assets “could be made surplus and put to better use”.
Of course, with a sector as diverse as the community business sector, there are bound to be other announcements today that I have missed. You can read the entire 2015 Spending Review report here. Please do drop me a line if you think I have overlooked something important.
Richard Harries is Director of the Power to Change Research Institute.