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kevin
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Briefing and analysis

Chancellor George Osborne will deliver his next Budget on Wednesday 23 March. On Thursday 24 March the Institute for Fiscal Studies will be holding a lunchtime briefing. The presentation will provide an opportunity to hear a considered view of the Chancellor's announcements from Institute staff. Slides will be loaded onto our website after the event.

Useful publications and resources

Green Budget 2011

The IFS Green Budget 2011 - produced in collaboration with Barclays Capital and Barclays Wealth - focused on the policy challenges confronting the Chancellor of the Exchequer in advance of the 2011 Budget. IFS researchers examine the outlook for the public finances, assess a number of the key issues relating to the planned public spending cuts and discuss possible decisions on taxation. Barclays analysts look at the outlook for the macro-economy, and the implications for markets.

Spending Review 2010

Our analysis of the Spending Review examined the impact on public finances, public services and the distribution of income.

Public finances

  • The IFS produces a monthly bulletin analysing recent developments in the government's public finance figures.
  • An IFS observation examines the debate around fuel duty and what implications any change in policy would have for the public finances.
  • Disease and cure in the UK: The fiscal impact of the crisis and the policy response (a presentation given by Carl Emmerson at a European Commission seminar in June 2010) examines what we know about the effect of the financial crisis and recession on the public finances and the proposed fiscal repair measures.
  • Before the recent general election Robert Chote, Rowena Crawford, Carl Emmerson and Gemma Tetlow examined what the three main UK parties said (explicitly and implicitly) about the scale, timing and composition of the fiscal repair job ahead, teasing out the differences and similarities.

Welfare benefits

  • An IFS Briefing Note Universal Credit: a preliminary analysis analyses Universal Credit as set out in the government's White Paper, Universal Credit: Welfare that Works.
  • IFS held a briefing on the Universal Credit on 12 January 2011.
  • Poverty and inequality in the UK 2010 assessed the changes to average incomes, inequality and poverty that have occurred since 1979, with a particular focus on the changes that have occurred in the latest year of data (2008-09) and since 1996-97.

Public-service pensions

Education

  • An IFS Briefing Note offers an analysis of higher education reforms and assesses how progressive they are.
  • Following the Government's announcement that it planned to withdraw the Education Maintenance Allowance (EMA) in favour of a more efficient and cost-effective scheme, an IFS observation An efficient maintenance allowance? examines the impact and effectiveness of EMA payments.

Fiscal facts

Election 2010

Our analysis for the election looked at Labour's record and at the parties' proposals. The work was funded by the Nuffield Foundation.

Official documentation

The Treasury's home page links to previous and current Budget documentation. The new Office for Budget Responsibility's publications - including their November 2010 economic and fiscal forecasts - can be found here.

http://www.ifs.org.uk/projects/347

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kevin
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The Public Finances Databank is a compilation of published data covering the main aspects of the Government’s finances including receipts, expenditure, borrowing and debt. All the data are presented in clearly defined tables and charts which provide a quick and easy way of assessing past performance as well as showing forecasts for the future. Many of the data fields go as far back as the 1970s, while the latest Office for Budget Responsibility forecasts extend to 2015-16.

Some of the documents below are available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website.< For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.<

HM Treasury accepts no responsibility for the accuracy of the material published.

For information on GDP Deflators and the latest data please see GDP Deflators: A User´s Guide.<

To arrange for automatic delivery of each updated version of the databank direct to your email address, please contact the editor Beth Tasker<, 020 7270 5254.

Latest Monthly Public Sector Finance Statistics

Monthly estimates of the main public sector finance statistics are issued jointly by the Office for National Statistics and HM Treasury.

Latest Government Debt and Deficit under the Maastricht Treaty

Six-monthly estimates of the Government Debt and Deficit under the Maastricht Treaty statistics are issued by the Office for National Statistics. The latest release was on 31 March 2010.

Related links

External links

http://www.hm-treasury.gov.uk/psf_statistics.htm<

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kevin
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Chancellor of the Exchequer, George Osborne MP, will make a Budget statement to the House of Commons on Wednesday 23 March at 12.30pm.

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Budget statement

The Budget usually takes place in March or April. Every year the Chancellor of the Exchequer makes a major speech to the House of Commons on the state of the national finances and the Government's proposals for changes to taxation. This statement is known as the Budget.

What is in the Budget?

The Budget statement will include:

  • a review of how the UK economy is performing
  • forecasts of how the UK economy will perform in the future
  • details of any changes to taxation.

What happens after the Budget statement?

It is customary for the Leader of the Opposition to respond to the speech given by the Chancellor rather than the Shadow Chancellor. The Shadow Chancellor makes his response the day after the Budget statement.

The Budget Debate will continue on Thursday 24 March, Monday 28 March and will conclude on Tuesday 29 March.

The Budget statement will be shown live from when the Chancellor begins his statement on Wednesday 23 March and can be viewed live on the Parliament website from 12.30pm.

House of Commons Library Analysis

The House of Commons Library regularly produce briefing notes which inform MPs about key issues. The Library has produced a briefing paper on the background to the 2011 Budget.

Further information

More information about the 2011 Budget can be found on HM Treasury website. The Parliament website has information about the history of the budget as a parliamentary occasion and frequently asked questions about budget speeches and financial documents. 

http://www.parliament.uk/business/news/2011/march/budget-2011-statement/<

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kevin
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Headline Comparisons

  • Central government current receipts in February were 0.9% lower than in the same month last year. The Office for Budget Responsibility's (OBR) Economic and Fiscal Outlook forecast an increase in receipts relative to last year's levels of 8.9% for the year as a whole and of 8.9% for the period from November 2010 to March 2011. The latest figures show an increase relative to last year's level of 7.7% for the year to date, with a 5.7% increase between November 2010 and February 2011 compared to the same four months last year.

     

  • Central government current spending in February was 4.6% higher than in the same month last year. The OBR's latest forecast implies an increase relative to last year's level of 5.4% for the year as a whole and of 4.2% for the period from November 2010 to March 2011. The latest figures show an increase relative to last year's level of 5.9% for the year to date, with an increase of 5.1% between November 2010 and February 2011 compared to the same four months last year.
  • Public sector net investment in February was £5.2bn, compared to £5.8bn spent in February 2010. Together, public sector net investment over the first eleven months of this financial year has been £32.7bn, which is 20% lower than in the same months of 2009−10. The OBR's latest forecast was that net investment in 2010-11 would be £42.3bn, which is 7% below last year's level.

Download full version (PDF 531 KB)<

http://www.ifs.org.uk/publications/5518<

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kevin
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This year’s Budget rightly focused on growth. If we are going to lift people out of poverty we need a strong economy to be able to do it. However, in the meantime it looks like people living in poverty will continue to struggle. The key announcements affecting people in poverty in today’s Budget include:

  • Raising the income tax threshold by £630. This will be worth £126 a year to people paying 20% tax.  It will not help all those who are already below the tax threshold. The change also benefits anyone who earns up to £115,000 (with those paying 40% tax gaining £48 a year) rather than being targeted only at those on lower incomes.

    • Two other factors will reduce much of the gains from raising personal tax allowances. First, in-work benefits are withdrawn as income rises. Second, the change in the inflation measure to be used in uprating tax thresholds (from the Retail Prices Index to the Consumer Prices Index) is an effective tax increase which will raise £105 million this year, £235 million next year and £630 million the following year.  It won’t take too long for this to cancel out the benefits of increasing the personal tax allowance.  
  • Youth unemployment. A very welcome £270 million package to help young people into work or training, including 50,000 apprenticeships.  This is in addition to £250 million announced in the 2010 Spending Review to pay for 75,000 new adult apprenticeships by 2014–15. 
  • A ‘fuel stabiliser’ to help motorists struggling with rising petrol prices. This will help those in poverty who drive cars and will be especially useful in rural areas, where a car is seen as an essential part of a minimum standard of living. However, people in poverty tend to be more reliant on public transport, where prices have continued to rise.
  • The extension of supported mortgage interest is a welcome protection for vulnerable homeowners, but there is a need for a consistent safety net over the longer term. While the new ‘Firstbuy’ scheme will offer a valuable opportunity for 10,000 households, and create new jobs, it won’t help with the serious problems of affordability and volatility in the market. In addition, even low-cost loans to meet the deposit requirements can be problematic with the history of overpricing leading to negative equity in parts of the new build market.
  • It is unclear how the proposed changes to the planning system will work alongside the fundamental system change set out in the Localism Bill.  Certainly there is reason to be concerned that new approaches to planning will fail to deliver the supply of new houses that is needed, and risk exacerbating spatial inequality.

However, the big news for poverty was really in last year’s Budget. A whole host of measures will take effect this April, falling heavily on those at the lower end of the income spectrum.

In total, welfare cuts were projected to save the Treasury over £2 billion this year, largely by reducing the incomes of people already in poverty.

This includes:

  • Changing the inflation measure used to uprate benefits, which is likely to erode their value over time compared with earnings (projected to save £1.2 billion this year).
  • Reductions to housing benefit and Local Housing Allowance.
  • Abolishing the ‘health in pregnancy’ grant.
  • Changes to tax credits which together save £1.2 billion. These include increasing the rate at which tax credits are withdrawn, which was calculated last year to wipe out much of the gains of raising the income tax threshold for low-income households.
  • Reducing help with childcare costs, which saves £335 million this year.

On the other hand, the increase in the Child Tax Credit of £150 per year above inflation will also begin this year. This will cost the Treasury £1.2 billion.

The Government states that the combined impact of measures in the 2010 Budget and Spending Review, and the 2011 Budget, is to reduce child poverty by 50,000 in 2011–12 and 2012–13. This is within the margin of error.  Earlier forecasts by the IFS predicted that child poverty would fall this year and next year and then increase in 2013–2014, taking it back to 2008–09 levels.  As always, the picture for childless adults is much grimmer.

The impact of the big squeeze on local authority budgets is also likely to accelerate this year, both in terms of jobs and services. It seems almost certain that those in poverty will see a reduction in some of the services they rely on. For instance, we already know that some Surestart centres are closing, youth services are being very badly hit and bus routes are under pressure.  However, we can also hope that some innovative and more effective ways of meeting people’s needs will emerge.

Today was billed as the Growth Budget. Economists are picking over the detail and debating the macro-economic effects. These are important for poverty. However, the actual impact of higher growth (if it is achieved) on poverty depends on a whole range of micro-level factors. In particular, if jobs are created, what is their quality and what scope is there for those who get work to keep it and to progress? Likewise, how far will those jobs be accessible for parents and other carers?  

Alongside efforts to help businesses grow by reducing regulation and improving skills, we would also like to see a big change in the encouragement, support and incentives for businesses to:

The 21 New Enterprise Zones, revamped Sector Skills Councils, business associations and networks of employers all need to take a lead here. Local, central and devolved governments, alongside Local Enterprise Partnerships, need to facilitate, coordinate and promote this, and look at ways of incentivising the right kind of growth, which generates opportunities for people to escape poverty through decent local jobs.

http://www.jrf.org.uk/blog/2011/03/poverty-and-2011-budget

 

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anonymous (not verified)
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The Education Committee 4th report finds that the Educational Maintenance Allowance (EMA) changeover was poorly executed by Government.

Background

On 28 March 2011 the Government announced a new £180 million bursary scheme< to help the most vulnerable 16-19 year olds continue in full-time education, which was to replace EMAs in England,which cost £560 million. The EMA scheme continues throughout the rest of the United Kingdom.

The report

The report finds that allocated funding for student support for 16-18 year olds for 2011-12 was far too late to allow students to make informed decisions and that the Government should have done more to acknowledge the EMA’s combined impact on participation, attainment and retention, before it decided how to restructure financial support.

According to the Committee, the bursary scheme which is to replace the EMA will inevitably lead to inconsistencies which could distort young people’s choices of where to study. It is not persuaded that bursaries administered by schools and colleges will necessarily be fairer or more discriminating than a slimmed-down, more targeted entitlement such as the EMA.

The report also makes a number of recommendations including:

  • free or subsidised travel to all 16 to 18 year olds travelling to and from learning.
  • making free school meals available to 16-18 year olds in colleges.
  • not supporting the principle of payments to employers taking on Apprentices.
  • local authorities respecting duties (and not making cuts) imposed by Parliament to encourage, enable or assist effective participation by young people in education or training via Connexions services.
  • that the National Careers Service should be funded by the Department for Education to provide face to face careers guidance for young people.

You can view the Education Committee 4th report on the Parliament website.

More information

http://www.disabilityalliance.org/skillema.htm<

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