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Autumn Statement 2015

George Osborne has delivered the Autumn Statement Here is a summary of what was announced.

The Spending Review sets out how £4 trillion of government money will be allocated over the next five years, so the government can invest in priorities like the NHS, defence and housing. On average, departmental spending will fall at less than half the rate of the previous five years.

The state of the economy

  • Growth of 2.4% forecast for 2015-6, unchanged from July’s Budget
  • Forecast growth in 2016-7 and 2017-8 revised up to 2.4% and 2.5% respectively
  • Borrowing forecast to total £73.5bn this year, falling to £49.9bn, £24.8bn and £4.6bn in subsequent years before hitting surplus in 2019-20

Business

From 2020 local councils will be able to keep money from business rates collected from shops and businesses

Apprenticeship levy set at 0.5% of employer wage bill, with £15,000 allowance for eligible firms

Funding for flood defence to be protected in real terms

Big energy users such as the steel and chemicals industries to be exempt from environmental tariffs

26 new enterprise zones to be created or extended

Public borrowing/deficit/spending

  • Government expected to borrow £8bn less than forecast as it aims to secure £10.1bn budget surplus by 2020
  • Office for Budget Responsibility says public finances set to be £27bn better off by 2020 than forecast
  • Total spending to rise from £756bn this year to £821bn by 2019-20
  • Overall day-to-day departmental spending to be cut by £20bn, equivalent to 0.8% of total expenditure each year by 2020
  • Policing, health, education, international aid and defence budgets protected
  • Transport, energy, business and the environment among biggest losers, resource budgets falling by 37%, 22%, 17% and 15% respectively

Health and education

  • Health budget in England, currently £101bn, to rise to £120bn by 2020-21
  • An extra £600m earmarked for mental health services
  • Grants for student nurses to be scrapped and replaced by loans
  • New social care “precept” in council tax of up to 2% to allow local councils to raise £2bn for social care
  • Better Care Social Fund to be increased by 1.9%
  • £15m raised from charging VAT on sanitary products to be given to women’s health charities

Schools funding will be protected

  • £23 billion will be invested in school buildings creating 600,000 extra school places and 500 free schools
  • Maintenance loans will also be available to higher education students who study part time from 2018

Personal taxation, pensions and savings

  • The basic state pension will rise to £119.30 a week
  • Savings credit to be frozen at current level
  • Every individual and small business to have their own digital tax account by the end of the decade

Housing

  • 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

Other Key budget announcements

  • Capital funding of transport projects to rise by 50% by 2020
  • Electrification of the Trans-Pennine, Midland Mainline and further sections of the Great Western Railway to go ahead
  • Culture department to see funding cut by 5%
  • Extra cash for the Arts Council and UK Sport
  • Free museum entry to be maintained
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