GBSLEP Blog - Delivering on the Autumn Budget and Spending Review
06 Nov 2021
The Autumn Budget assumes that we will enjoy a sustained economic recovery. We, GBSLEP are led by locally based business intelligence and have a unique triple helix structure that brings together public, private, and academic leaders to make informed and joined-up investment decisions. We have five priority sectors that have been identified as areas that can grow the economy: creative industries, low carbon, data-driven health and life science, advanced manufacturing -food and drink and business, professional and financial services. All our work is delivered through the prism of inclusivity, skills, placemaking, innovation, young people, digital and business support. We are encouraged to see that driving economic growth, leading the transition to net-zero, and helping people to work and businesses to get the skills and support they need, are at the heart of the Autumn Budget and Spending Review.
The Chancellor mentioned innovation and supporting entrepreneurs within the opening moments of his speech. It suggests support for grassroots organisations and start-up entrepreneurs is what the Budget will deliver. At GBSLEP our mission is to drive the inclusive economic growth of the region and our work echoes the Chancellor’s view that we must invest in economic infrastructure, innovation, and skills to make this happen. The government has highlighted its commitment to supporting SMEs, but it has not set out what this financial support will look like. Furthermore, the Chancellor has stated the need for this support to be spread across the UK with specific reference to the manufacturing sector. Could there be scope for a manufacturing-based innovation deal for the West Midlands? One bit of good news is that the Innovate UK R&D budget will go up by £400 million by 2024-2025. This is an increase of more than 50% in today’s money and a significant increase in funding that will assist SME’s and start-ups. We anticipate this funding should trickle down through the existing Innovate UK mechanisms to the West Midlands. Furthermore, the budget sets out that £2.5 billion is the minimum funding for Innovate UK and so there may be more funding available later. There is hope for an innovative future for all of us!
The creative industries are a key sector identified by GBSLEP as a potential for accelerating inclusive economic growth and it seems for the Government too! The Autumn Budget has acknowledged this with £42m committed nationally over the next 3 years in supporting creative SMEs to scale up and providing bespoke support for the film and video games sectors. Undoubtedly Covid-19 has hit the creative industries severely with many live venues forced to halt activity last year. Therefore an £800m Live Events re-insurance scheme and a £500m extension of the Film & TV Production restart scheme is essential. Without this support, fewer major live events or major productions can restart. GBSLEP’s focus is on culture and placemaking and it is positive news that £850 million has been committed nationally to cultural and heritage infrastructure, £52m to funding cultural bodies, and over £200m to grassroots sporting infrastructure. We are also working on interventions that can help young people who have been adversely affected by the pandemic. We are also focusing on re-animating our high streets and local places. One of the ways in which we are doing this is through funding nine Cultural Action Zones. This echoes the government’s commitment to levelling up communities, reducing inequalities, and creating better cohesion. There is much hope in the Budget for ‘local pride’ to be amplified through the £150m national Community ownership Fund, £480m to celebrate major events, and £560m towards youth services to improve wellbeing.
Low Carbon and Clean Growth
The Spending Review followed on from BEIS’ Net Zero Strategy published on the 19th of October. The Net Zero Strategy highlighted the need and appetite for investment across our low carbon sector to transition us to net zero. The Strategy also highlighted how the development of thousands of high-quality green jobs will be critical to not only ensure that we can maximise economic growth opportunities after the Covid-19 pandemic but also to underpin the decarbonisation of our economy. The Spending Review included an additional commitment to deliver business rates exemptions for green property improvements, including solar panels and heat pumps, to help businesses invest to make buildings more energy-efficient. This will be a further boost to catalyse investment into our regional commercial premises which require wholesale refurbishment and retrofit across our region. At GBSLEP we are working on several projects to drive forwards inclusive clean growth. We acknowledge the scale of the challenge to achieve net-zero in our Strategic Economic Plan 2016-2030, and we are acting now to make a tangible difference to our regional decarbonisation efforts. This Autumn we have launched our Low Carbon and Circular Economy Grant Fund and Growing Places Capital Fund Programme. In November 2021, we will launch the Clean Growth Programme via our Growth Hub. The Programme will help businesses of all sizes and sectors with planning, funding, and delivering practical steps to reduce their energy use and carbon footprint.
Advanced Manufacturing - Food and Drink
For Food and Drink manufacturers creating the conditions for increased sustainability is vital. In the Autumn Budget, the Government has committed to maintaining total farm support in every nation of the UK - it’s worth a cumulative £3.7 billion a year. So how is this being supported? From the agricultural transition in England including the rollout of Environmental Land Management schemes to pay farmers for delivering climate and environmental benefits while producing the nation’s food to the £100 million investment in the UK Seafood Fund – all roads lead to the long-term sustainability of food and drink.
Talking about a drink – let’s talk alcohol. The government intends to restructure alcohol duty so that all beverages will be taxed in direct proportion to their alcohol content. To simplify the regime, the government will look to reduce the number of main rates from 15 to 6, with common thresholds for each set of bands across product categories. Taxes will be brought into line for drinks at 8.5% ABV or above. To encourage innovation, Government plans to introduce reduced rates for products below 3.5% ABV. The government also intends to introduce a common small producer relief, so to reduce the tax burden on smaller producers of wine, cider, spirits, and wine below 8.5% ABV. Alongside this, a new relief that recognises the importance of pubs and supports responsible drinking will be introduced, with duty rates on draft beer and cider being cut by 5%. Are you still with us or have we made you dizzy? The government is publishing a consultation on the detail of these reforms, which will close on 30 January 2022.
Many of our food and drink manufacturing businesses in the region will be working out how they are going to be affected and it’s a discussion we will pick up at the next meeting of the West Midland’s Food and Drink Manufacturing Forum that brings leading ‘makers’ together
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