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Talking Point - Spending Review and Autumn Statement 2015

By Wesleyan

Delivering the Spending Review and Autumn Statement today, the Chancellor George Osborne said that he aimed to create “economic and national security” for the UK.

Combined with the Autumn Statement, he outlined his third spending review, the first since 2010 that lays out the Chancellor’s forecasts for inflation, public spending and the economy. The Chancellor stated that he needs to find £20 billion in savings in order to eradicate the deficit by 2020, and move into a modest surplus.

Key announcements included:

NHS

The NHS budget currently £101 billion, will rise to £120 billion by 2020.

Grants for health students will be replaced by student loans reforming their funding system.

The removal of the cap on the number of student nurses and midwives will deliver an additional 10,000 training places during this Parliament.

An additional £600 million is being put aside for mental health services to help more people access treatment each year.

Education and children

The school funding formula, used to calculate the allocation of money for each school pupil, is to be phased out and a new national funding formula introduced from 2017.

£23 billion is to be invested into schools creating 600,000 extra school places by opening 500 new free schools and university technical colleges as well as investing in school buildings.

Sixth form colleges in England will be given the opportunity to become academies allowing them to reclaim VAT on non-business costs.

Free childcare is to be doubled from 15 hours a week to 30 hours a week for three and four year olds, from September 2017. Eligibility for the additional 15 hours is subject to a maximum income level of £100,000 per parent and a minimum income level, equivalent to working 16 hours a week at the national living wage.

Pensions

From 6 April 2016 the Basic State pension will rise to £119.30 per week, an increase of £3.35, and the starting rate for the new State Pension will be set at £155.65 per week.

For you

Those purchasing additional properties such as buy-to-lets and second homes will pay an additional of 3% above the current Stamp Duty rates from 1 April 2016.

ISA allowances will remain unchanged in the 2016/17 tax year at £15,240 or £4,080 for a Junior ISA and Child Trust Fund.

Housing budget doubled to £2 billion with 200,000 starter homes to be sold at a 20% discount, from the market value, to the under 40s.

From 2016 a new Help to Buy scheme in London will provide an interest free loan up to 40% of the value of a newly built home, up from the current scheme which offers up to 20%.

Local Authorities are given the power to level an additional 2% precept on Council Tax to be spent solely on Adult Social Care, if they wish.

Tax Credit cuts of £4.4 billion that had been announced were cancelled. Tax Credits will be phased out as Universal Credit is phased in.

For businesses

600,000 small businesses will benefit from a rate relief scheme for one more year.
Uniform business rates to be abolished, with elected mayors allowed to raise rates under certain conditions.

The next two phases of contribution rate increases for auto-enrolment schemes will be delayed by six months to align with the start of the tax year.

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