Spending Review and Autumn Statement 2015: a summary
Published Monday, November 30, 2015
The Autumn Statement and Spending Review 2015 was presented by the Chancellor of the Exchequer to Parliament on 25 November 2015. At the same time the Office for Budget Responsibility (OBR) published updated forecasts in its Economic and Fiscal Outlook.
This note provides an overview of the forecasts, the Spending Review, and the welfare cap. Announcements made on the apprenticeship levy, housing and tax credits are also discussed.
- The Chancellor has reversed planned changes to the taper rate and income thresholds within tax credits. Changes to Universal Credit announced at Summer Budget 2015 will go ahead as planned from 2016/17.
- The OBR judge that the Government will not meet the welfare cap in 2016/17, 2017/18 and 2018/19.
- An apprenticeship levy will be introduced in April 2017. The levy will be set at 0.5% of an employer’s paybill, and each employer will receive a levy-free allowance of £15,000.
- Local authorities who provide social care will be able to include a 2% council tax precept to fund social care services.
- Stamp duty for buy-to-let properties and second homes will be increased from April 2016. The rates will be 3% points above current stamp duty rates.
- Housing initiatives announced included: a London Help to Buy scheme and 400,000 affordable housing starts by 2020/21. The housing starts are to include Starter Homes and Help to Buy: Shared Ownership Homes.
- Housing benefit for new social tenants will be capped at same level as received by private sector tenants.
- The Welsh Government will receive a funding floor. The floor will ensure that the relative funding provided to the Welsh Government will be at least 115% of comparable per-head spending in England.
- The Government will launch a consultation on a new national funding formula for schools, high needs and early years in 2016. The new formula will be implemented from 2017/18.
- An increase in forecast tax receipts and decrease in forecast debt interest payments has allowed the Government to increase capital spending, reverse tax credits cuts and reduce cuts to departmental spending.
- NHS spending will increase by £10 billion between 2014/15 and 2020/21.
- Schools budget to be protected in real terms over the Spending Review period.
- The Ministry of Defence Single Intelligence budgets will rise in real terms.
- Police funding is protected in real terms over the Spending Review period, although the total Home Office budget will see a 5% fall.
- The Department for Business Innovation and Skills will see a real terms budget reduction of a quarter, despite protection of the capital science budget.
- Spending on transport infrastructure will see a real terms increase of 75% to £11.4 billion in 2019/20.
- Each of the devolved administrations will see a real terms budget reduction of around 4% over the Spending Review period.
The attached Briefing Paper includes analysis of the announced departmental spending changes and fiscal forecasts.
The attached spreadsheet includes interactive tables showing departmental budgets over the Spending Review period.
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