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Central Government Panel

The March Budget: briefing note on aspects particularly relevant to central government organisations and public management.

The Chancellor's Budget Statement on 16 March 2005, together with the publication of the Hampton and Arculus reports on the same day, gives an overall strong emphasis on deregulation. There were also a number of other announcements which will impact on central government organisations. This Briefing Note highlights the main points of interest for those in central government.

Direct quotes from the Budget speech, the Budget Report, Hampton Report or Arculus Report are shown in italics.

The Chancellor began his report with an update of the Government's progress in a number of policy areas including the Gershon report, Civil service relocation, and public sector asset disposals:

• public sector asset disposals
  I can report that following the Lyons Report on public sector assets £14 billion of asset disposals have already been identified, £4 billions to be sold this year.
• Civil service relocation
  I can also report the first 7,800 civil service jobs to be relocated out of London and the South East to Yorkshire, South West, the North East and West, the Midlands and East England, and Scotland and Wales.
• Gershon report
  I can report - ahead of target - the first £2 billion of value for money Gershon savings, on top of £2 billion savings in procurement announced in December. And I can also report - on target - the reduction of the first 12,500 civil service posts. And having examined, in detail, representations put to me, I hold to Sir Peter Gershon's recommendation that to go beyond his proposal for £21 billion savings would, in Sir Peter's words, put the delivery of front line services at risk.

Public Spending

The Chancellor moved on to announce some planned increases in public spending:

The Government is committed to providing new investment in Britain's public services. Spending on public services will be £62 billion higher by 2007-08 compared with 2004-05. Around 75 per cent of this increase will go on the Government's priorities of health, social services, education, transport, housing and the fight against crime.

So for policing and law and order I can confirm that expenditure in 2007-8 will, as stated in our spending plans, be £3.5 billions higher than this year.

Expenditure on transport will be £2.4 billions higher than this year.

Defence £3.7 billion higher.

Education £12 billions higher.

Health £23 billions a year more in 2007-8 than in 2004-5.

With regard to Education, Secretary of State Ruth Kelly has subsequently indicated that additional funding of £150m will be available in 2008-09, rising to £500m. The aim is to "provide for a wide-ranging programme of rebuilding, refurbishing and upgrading covering at least 50 per cent of primary schools in England." There will also be a long-term programme of capital investment in primary schools - further support for ITC in schools: £25m capital funding in 2006-07 and 2007-08 for schools in deprived areas. The DfES will also double their contribution to the e-Learning Foundation to £500,000 a year from 2005-06. And the Government intends to increase the grant paid directly to schools in England in 2006-07 "bringing the payment in that year for a typical primary school up to around £34,000 and for the typical secondary school up to around £109,000". A further increase is promised for 2007/08 to bring these payments to around £36,000 and £115,000 respectively.

Deregulation: Hampton and Arculus Reports

The Chancellor announced the publication of the Hampton Report and highlighted some of its main recommendations. The report, from Philip Hampton on Reducing administrative burdens: effective inspection and enforcement sets out the Government's plans to reduce the regulatory burden on businesses and to streamline inspectorates in the public sector. In summary, the Hampton Report recommends:

• comprehensive risk assessment should be the foundation of all regulators' enforcement programmes;
• there should be no inspections without a reason, and data requirements for less risky businesses should be lower than for riskier businesses;
• resources released from unnecessary inspections should be redirected towards advice to improve compliance;
• there should be fewer, simpler forms;
• data requirements, including the design of forms, should be coordinated across regulators;
• when new regulations are being devised, Departments should plan to ensure enforcement can be as efficient as possible, and follows the principles of this report; and
• thirty-one national regulators should be reduced to seven more thematic bodies.

For consumer and trading standards a single body will take over the responsibilities of the four inspection bodies we inherited in 1997. There will now be five inspection bodies for food safety, the countryside, agriculture, animal health and environmental protection - compared with 22 separate bodies in 1997. Five existing agencies will be merged into the Health and Safety Executive. The Government is bringing forward proposals for a reduction in public sector inspectorates from 11 to 4 - with single inspectorates for criminal justice, for education and children's services, for social care and health, and for local services.

The Insolvency Service Agency will take over the responsibilities of the DTI's Companies Investigation Branch.

The Inland Revenue and Customs will also now consult on a single tax account for small business where information need be provided only once, a single point of contact for both VAT and corporation tax, and flexible payment options.

On 17 March, the Health Secretary John Reid has confirmed that the Healthcare Commission and the Commission for Social Care Inspection will merge to form a single organisation by 2008.

The full text of the Hampton Report and a list of the regulatory bodies can be downloaded from the Treasury website at: www.hm-treasury.gov.uk/media/AAF/00/bud05hampton_641.pdf

Turning to the regulation of businesses, the Chancellor announced that the Government is accepting the recommendations of the Arculus Report, also published on 16 March, setting requirements for every department for year by year reductions in the burden on business.

The strong emphasis on deregulation in the Budget indicates that all three main political parties are now committed to this issue. The Conservatives have said that they would introduce a deregulation bill. The Arculus report recommends just that.

The Budget speech, the full Budget report and associated papers can be downloaded from the Treasury website at: http://www.hm-treasury.gov.uk/