Spending Review and Autumn Statement
On 25th November, the Chancellor, George Osborne, outlined his spending plans for the next 5 years in the Spending Review and Autumn Statement. The Government has maintained its intention to reduce spending in order to clear the national debt and have a surplus by 2020. The Statement revealed which areas of Government would receive investment and those were services would be trimmed.
This briefing note outlines the key announcements which may affect you or your family or your business concerns.
Health and social care
- £150m to fund a new Dementia Research Institute.
- £10bn real term increase by 2020/21 to deliver 7 day hospital and GP services.
- £6bn of funding to given upfront next year to NHS England (not the Department of Health).
- 25% cut in Department of Health budget.
- NHS will make £22bn of efficiency savings by 2021.
- Local Authorities delivering social care will be able to add a 2% social care precept to council tax that must be exclusively spent on social care. This will equate to £2bn of extra funding to the care system by 2019-20 if all Local Authorities take up this offer.
- Social care spending will have risen in real terms by end of this Parliament.
- There will be an additional £1.5bn through an ‘improved’ Better Care Fund in 2017.
- £500m for the Disabled Facilities Grant up to 2019/20, expected to prevent 8,500 needing to go into care homes.
- Basic State Pension will rise to £119.30 per week, an increase of £3.35.
- Pensioners will now be £1,125 better off per year since 2010.
- New single tier state pension will be £155.65 for those reaching pension age from April 2016.
- Housing Benefit and Pension Credits to be scrapped for ex-pats (people out of the country for more than 4 weeks at a time).
- The Government has pledged funding to build 8,000 specialist homes for older and disabled people, with the intention of preventing 8,500 people from going into care homes.
Probate and inheritance
- The Government will legislate to allow the ISA savings of a deceased person to continue to benefit from tax advantages during the administration of their estate and will set out further plans for introducing this measure in 2016, following technical consultation with ISA providers.
- The Government will legislate to ensure a charge to inheritance tax will not arise when a pension scheme member designates funds for drawdown but does not draw all of the funds before death. This will be backdated to apply to deaths on or after 6 April 2011.
- From April 2019 Capital Gains Tax on residential properties will need to be paid within 30 days of disposal of assets.
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