What Prospect members need to know about the 2024 Budget
The Chancellor delivered the Budget this week, with the biggest headline-grabbing announcement a 2p in the pound cut to National Insurance for employees and the self-employed.
Commenting on the Budget, General Secretary Mike Clancy said: “it seems the Government is intent on playing cynical games and making unsustainable decisions” and that “the country is crying out for a proper plan for growth”.
But what else was in there?
Here are some of the key announcements which should be of interest to Prospect members and what we make of them.
Size of the Civil Service
The Budget said the Government is “capping Civil Service headcount over the rest of this Spending Review period – this is the first step towards the Government’s target of bringing headcount back down to pre-pandemic levels over the long-term.”
Prospect’s view
The Government is running out of people to blame for its economic record of the last 14 years, so yet again it focuses on civil servants. Every time a minister proposes cutting tens of thousands of civil servants, they fail to set out what it is that they think government should stop doing.
Cuts to public services
The Office for Budget Responsibility said it now expects real department spending until 2026-27 to be 8% lower per person than it would be if Treasury had stuck to plans set out at Spending Review 2021.
Prospect’s view
The Government has a responsibility to get the balance right between levels of tax and spend.
The current balance is clearly wrong, and the majority of the public would rather see increased spending to revive our flagging public services instead of tax cuts and real-terms cuts to services we can ill afford.
Nuclear power
The Budget said: “The Government has reached agreement on a £160 million (excluding taxes) deal with Hitachi to purchase the Wylfa site in Ynys Môn and the Oldbury-on-Severn site in South Gloucestershire.
“The Government has also announced that we have moved to the next stage of the Small Modular Reactor competitive process, with six companies now invited to submit their initial tender responses by June.”
Prospect’s view
These announcements were welcome but, critically, the Chancellor had no update on the urgent task of getting Sizewell C over the line.
Renewables
The Budget said: “The Government has published full parameters for the Contracts for Difference Allocation Round 6 (AR6), including setting the largest ever budget for a single round, of over £1 billion.”
Prospect’s view
Again, this is a welcome announcement, and it shows the government has learned from last year’s offshore wind disaster. However, we are yet to see a proper industrial strategy to deliver good jobs across the renewables industry. Read Senior Deputy General Secretary Sue Ferns’ comment on the Budget’s energy measures.
Museums and galleries
The Chancellor announced a permanent extension to tax relief for museums and galleries. From 1 April 2025 these rates will be permanently set at 45%/40% for museums and galleries.
He also announced an allocation of £100 million of funding for culture projects, which “will support a combination of nationally significant cultural investments such as the British Library North in Leeds, National Railway Museum in York, and National Museums Liverpool.”
Prospect’s view
The tax announcement is welcome, as is more capital funding for some national museums. However, it doesn’t address the long-term problem of funding for the sector, which leads to the low pay and poor conditions that we’ve highlighted in our world-class heritage, second class pay campaign.
Creative industries
The Budget announced: “a new UK Independent Film Tax Credit at a rate of 53% for films with budgets under £15 million that meet the conditions of a new British Film Institute test”, along with tax breaks for visual effects and an extension to tax relief for theatres.
Prospect’s view
We welcome a number of promising announcements, along with a general focus on creative industries. However, there was no direct support for the freelancers that make the creative industries one of the UK’s greatest assets. You can’t have a thriving sector without a thriving workforce and, in the aftermath of the pandemic and SAG-AFTRA strikes in the US, many in the industry are struggling.
Read Bectu’s full response to the budget on creative industries.