On 15 March, Chancellor Jeremy Hunt delivered his “Budget for Growth,” kicking off with the latest economic projections from the Office for Budget Responsibility (OBR).
Expectations are for the UK to avoid a technical recession this year – however the economy is set to contract by 0.2% in 2023, with growth then predicted to reach 1.8% in 2024 and 2.5% in 2025. Inflation is predicted to fall from an average rate of 10.7% in Q4 2022 to 2.9% by the end of this year. This decline can be partly attributed to the three-month extension to the household Energy Price Guarantee (EPG), confirmed by the government earlier in the day on 15 March.
Four Pillars
The Chancellor’s growth strategy focuses on four pillars ‘Everywhere, Enterprise, Employment and Education.’
Everywhere – Levelling Up
The government has announced ‘trailblazer’ deals giving new and deeper devolution powers to local leaders in the Greater Manchester and West Midlands Combined Authorities.
For the first time outside of London, local leaders will now be able to set the strategic direction over the Affordable Housing Programme (AHP) in their areas. These two combined authorities will receive powers in a two-staged approach, initially having partial powers which will ensure the current 2021-26 AHP, which is overseen by Homes England, can be delivered.
After 2026, for any new AHP funding, these combined authorities will gain more powers, including directing Homes England to identify and bring forward sites for housing and to partner with providers.
Enterprise
For businesses to have the right conditions to succeed, the government introduced a new policy of “full expensing”, among other measures.
Employment
The Chancellor introduced new measures to “remove the barriers that stop people who want to from working”. This includes targeting mature workers with:
- The expansion of the DWP’s ‘midlife’ MOT scheme,
- A new ‘Returnerships’ scheme to make existing skills programmes more accessible to older workers and help them upskill and retrain
- A pension tax relief overhaul.
Education
Mr Hunt plans to reform the childcare system, currently “one of the most expensive systems in the world.”
His proposal offers 30 free hours of childcare each week to pre-school-age children aged nine months or above in English households where both parents work. It will be phased in on the following timeline:
- April 2024 – eligible two-year-olds will receive 15 hours of free childcare per week
- September 2024 – qualifying children aged nine months to two years will receive 15 hours
- September 2025 – eligible children aged nine months to three years will receive 30 hours.
Also, schools and local authorities will be funded to increase availability of wraparound care, between 8am and 6pm.