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Budget 2021: Key issues for Kent in Chancellor Rishi Sunak's spending review

05:00, 27 October 2021

updated: 10:24, 27 October 2021

The Chancellor, Rishi Sunak, will be opening up that famous budget briefcase later today but what could it mean for Kent?

Every budget is important but the Chancellor’s spending plans and how he intends to help the UK economy recover from the coronavirus pandemic make this one particularly significant. So, what are the key issues for Kent? Our political editor Paul Francis looks ahead...

Chancellor Rishi Sunak has unveiled his 2021 Budget. Picture: PA
Chancellor Rishi Sunak has unveiled his 2021 Budget. Picture: PA

And as well as the budget, the government will set out its three-year spending review, which will be significant for public services, from schools to our councils.

Levelling up: The government’s flagship policy which is designed to boost investment in poorer towns and communities could cause concern if extra money is diverted to the so-called ‘red wall’ seats in the north.

Despite the county being part of a region described as the powerhouse of the UK economy, there are notable areas which have been economic blackspots for decades, especially in the east of the county.

A number of Kent councils will be waiting to hear if their bids for a slice of the money to fund their schemes get approved. Among them are Thanet council, which has a three-pronged bid, involving the Port of Ramsgate becoming a “green port” which it says will provide a “hub for innovation and training, supporting renewable energy and zero carbon maritime logistics.”

Medway Council has three linked proposals aimed at creating jobs through cultural regeneration. Its bid involves expanding the “creative workspace” at the Brook Theatre, leading to an additional 40 professional touring events each year, and 50 jobs.

Tudor Price is deputy chief executive at Kent Invicta Chamber of Commerce

Canterbury city council has arguably among the more eye-catching packages, involving the creation of a pollinator park along the top of the city wall. It says the bid could transform Canterbury’s heritage assets.

Turning the city wall into a green haven of wildflowers akin to Manhattan’s High Line park is one strand of a bid that also includes transforming Canterbury’s crumbling castle into an amphitheatre, and renovating the Dane John Gardens.

Those behind the vision say it could see the city compete with the top tourist hotspots across the UK and Europe say it “could change beyond recognition this decade”.

Tudor Price from the Kent Invicta Chamber of Commerce said: "If businesses do not get the support it needs, it will have to pass on some of the costs to the consumer which is not going to help inflation; there needs to be some systemic support to get some of these supply chain issues under control.

"Despite the Prime Minister saying it's not to do with Brexit, it is. If we want to be more self sufficient and sustainable, there needs to be more support measures."

The NHS: The government’s pre-announcement of a cash injection of £5.9bn in the NHS to catch up on missed and postponed appointments has been heavily trailed; the question is whether it will be enough?

And there’s been a bit of smoke and mirrors around this announcement - it forms part of the £36bn extra cash being raised by the 1.25% National Insurance hike over the next three years. And might we hear some reference to that statement of intent to build 40 new hospitals?

The government’s pre-announcement of a cash injection of £5.9bn in the NHS. Stock image: Radar
The government’s pre-announcement of a cash injection of £5.9bn in the NHS. Stock image: Radar

Social care: Another long-awaited announcement. After years of dithering, the government will confirm the introduction of a social care levy on National Insurance to meet the costs of looking after the elderly and vulnerable.

There may be a sting in the tail for care homes: While the NHS will be exempt from paying the extra charge, no such commitment has been made for providers of adult care services.

Up and up again? Councils will be looking to the government to put their finances on a stable footing by recognising the extra costs of dealing with the coronavirus and by plugging the gap between what they need to keep council tax bills down and maintain services at their existing level.

Kent County Council has already identified a gap of £60m or more and another hike in council tax bills could be on the cards. The best councils can look forward to is probably a standstill budget.

Climate change: The budget comes just before the UK hosts Cop 26, the climate change global summit so expect some commitments and action needed to achieve its net-zero emissions target by 2050.

The switch to electric cars means almost £30bn in fuel duty raised annually for the Treasury will need to be replaced. Picture: New AutoMotive
The switch to electric cars means almost £30bn in fuel duty raised annually for the Treasury will need to be replaced. Picture: New AutoMotive

Road pricing has emerged as a possible way to compensate for the potential loss of revenue from fuel taxes; and with the cost of filling the tank at a high, the government won’t want to antagonise motorists. The switch to electric cars means almost £30bn in fuel duty raised annually for the Treasury will need to be replaced.

Speaking about fuel duty, South Thanet MP Craig Mackinlay said: "It has to be frozen because we have seen a 20% rise in prices; The big unknown is how are we going to replace the 37 billion of fuel duties? Are we going to have a road charging type scheme? I'd be very concerned about that."

Taking care of business: To help the business community survive over the period of the pandemic, the government offered a range of benefits, key among them being a discounted business rate, which tapers to roughly two thirds of bills up until next March.

But coming down the pipeline is an increase in corporation tax, rising to 25% in April 2023 and a 1.25% hike in the rate of dividend tax and National Insurance contributions.

Reform or abolition of business rates is unlikely, so there may be meagre offerings to small and medium-sized businesses, many of whom remain in a fragile condition.

Cost of Living: The Chancellor is poised to announce an increase in the Living Wage to £9.50 and hour from £8.91 an hour - a 6.6% rise.

Head to our politics page for expert analysis and all the latest news from your politicians and councils.

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