Columnist

Government budget 'must deliver firm foundations'

The Government has talked about taking tough decisions for the long term.

The impact of the employers’ National Insurance increases, along with tax allowance threshold changes and significant minimum wage uplifts, are undoubtably some of those decisions and will be at the forefront of businesses’ minds.  

Looking a bit more closely, there are other clues about the direction the Government wants to take – measures which give some context to the Chancellor’s claim to be “fixing the foundations”.

The Government has said it has recognised the pressure local authorities are under and will bring forward a comprehensive set of reforms.

These will include a reform of the approach to allocating funding to each authority, moving to a multi-year settlement from 2026/2027.

This is something the North East Chamber of Commerce has called for in our Stronger, Fairer North East policy plan, as our members across sectors have identified it as a major brake on regional growth and productivity.

On devolution funding, the Government has agreed integrated finance settlements for Greater Manchester and the West Midlands from 2025, with the North East Combined Authority (NECA) the first region authority becoming eligible for a settlement in 2026/2027.

The Chancellor also committed £25 million of funding to NECA to support the remediation of the Crown Works Studios site, in Sunderland.

This will support the North East’s creative industries and is expected to lead to around 8000 new regional jobs.

There were positive announcements on housing, with more money being allocated to recruit planning officers.

This addresses some of the brakes on development, including inward investment, which we know lack of capacity in the planning system can cause.

There was encouraging news for investment in the electric vehicle and the automotive sector in our region, and the announcement of the National Infrastructure and Service Transformation Authority will help to drive more effective delivery of infrastructure across the country.

As part of a Get Britain Working white paper, the Government is investing £240 million to trial new ways of getting people back into work, including tackling ill health.

There will also be a focus on young people who are not in education, employment or training to help them develop their careers.

These measures will aim to help address the country’s high levels of economic inactivity.

As the North East continues to be one of the regions with the highest levels of economic inactivity overall, these interventions have the potential to address a major labour market challenge.

Having pressed reset with this budget, the Government needs to use future fiscal events and policy initiatives to make sure businesses and employers can play their full role in the delivery of growth.

At the Chamber, we will be watching these developments closely to make sure they provide firm foundations, not just across the country but for our members and businesses right here in the North East.

Rhiannon Bearne is North East Chamber of Commerce deputy chief executive and executive director of policy and representation

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