The Autumn Budget and Spending Review 2021 has been presented, and it is aimed at preparing the UK for an ‘age of optimism’. There are a number of key concerns that have arisen as the COVID-19 pandemic continues, so this budget has garnered a great deal of attention. With encouraging metrics like growing investment and rising employment, we could be approaching the light at the end of the tunnel. Here is a broad summary of the key takeaways from the Autumn Budget Statement 2021.
Looking to the ‘post-COVID’ era
The Office for Budget Responsibility (OBR) expects the economy to regain its pre-COVID size around the turn of the year. Borrowing is decreasing and employment is rising, but inflation is still a cause for concern, and a number of spending commitments both past and future are behind some minor tax hikes that will come into force.
One interesting commitment is that the government is set to increase investment in housing, including a boost to the Affordable Homes Programme. There will also be a new focus on tackling homelessness. The Government wants to ‘level-up’ in as many ways as possible and we can all be hopeful for improvements in many areas after a difficult two years.
Recovery in the labour market
This Government has provided an enormous amount of financial support for the economy this year. This has helped keep people in work and keep businesses from collapsing, but there have also been a number of casualties of the economic strain caused by the COVID-19. The focus now is on the rising employment levels and supporting a strong economic recovery as we emerge from the crisis. This includes an increase in the national living wage and a public sector pay rise.
No UK nation is forgotten
The devolved administrations of the UK will receive an additional £8.7 billion per year on average to help Scotland, Wales and Northern Ireland level-up in line with England. This will boost their investment into education, housing, hospitals, transport and more. There will also be specific initiatives that target the existing strengths of the devolved nations to help them thrive even further, and increased funding for farming and fishing has been confirmed.
The Chancellor’s vision is one of a high-skilled, high-wage economy with productivity at its core. The new Plan for Growth aims to make this a reality, with R&D investment set to reach record levels. Infrastructure projects are to receive a significant boost, and young people can look to the future with real optimism as the Government’s investment creates genuine opportunity as they enter the world of work.
Borrowing and debt are as high as they have ever been, but forecasts suggest public finances are stronger than expected. The following targets are covered in the statement:
- Moving quickly to repair public finances
- Net investment in public sector averaging 2.7% GDP
- Investment in health and the NHS
- Making up for lost learning in children and young people
- Investment in the Affordable Homes Programme
- Additional support for the criminal justice system
Capitalising on UK recovery
The firm belief of this government is that the best way to help with recovery is to support people into work and help them progress in their careers. A significant investment in work coaches will help people on Universal Credit find their way into new jobs. A new Household Support Fund will help those most in need get through the winter, and there will be further backing to help businesses continue their recovery from recent lockdowns.
All of this means real hope for people across the UK. We have all struggled in various ways through the pandemic and, though it is not yet over, we are seeing the nation rebuild itself. Building back greener is another key priority to avert more problems in the future, but the ability of Britain to flourish outside the EU is the goal we can now all work towards.
If you want to learn more details about the Autumn Budget and Spending Review 2021 and what it will mean for you, please download our in-depth PDF guide. We are also available to answer any questions you may have, so don’t hesitate to get in touch.