George Osborne announces budget cuts

Today George Osborne announced plans for departments to hand back £1bn of underspends this year and for budgets to be £2bn smaller than expected over the next two years.

Today George Osborne announced plans for departments to hand back £1bn of underspends this year and for budgets to be £2bn smaller than expected over the next two years.

The chancellor said councils would be excused from contributing to the savings because they were expected to freeze council tax:

“We will not apply these additional savings to local government, because we expect them to freeze council tax next year,” he said.

The chancellor also said that the New Homes Bonus will not be top-sliced and handed to Local Enterprise Partnerships, adding that the borrowing cap on the Housing Revenue Account will be increased by £300m given the extra money will be under the control of LEPs to ensure the local growth fund is at least £2bn a year.

As well as this, £1bn of loans will be provided to help blocked housing developments “on sites in Manchester and Leeds and across the country”.

On the SME front - business rate increases would be capped at 2% from April and there would be an extension of the small business rate relief with a new £1,000 discount. This would apply for all businesses rated up to £50,000 and is designed to help small businesses on the high street.