Will the Autumn Statement make a difference?

After weeks of speculation about tax cuts the Chancellor’s Autumn statement has received a mixed reaction - from welcoming a return to conservative values to seeing it as simply an exercise in smoke and mirrors. That debate will no doubt continue, but what do the key features of the statement mean for the Public Sector, and most importantly vulnerable people who rely on bodies like Local Authorities for vital support?

There was a lot to absorb in the Autumn Statement, but I’ve picked out four measures, which do seem to offer some level of hope to people and families struggling with the continuing cost of living crisis.

To start with Jeremy Hunt committed to the triple lock for pensioners and an 8.5% increase in the state pension. Secondly he promised a 6.7% rise in Universal Credit in line with inflation. Thirdly, he has increased the National Living Wage by 9.8%, which will be worth up to £1,800 a year to the lowest paid. Last, but not least, he has cut National Insurance from 12% to 10%.

We should welcome any measures that help the most vulnerable and the lowest paid in society. However, the reality is that energy prices are still high, inflation is still increasing and the tax burden is the highest since WWII.  Prices are not going down, they are simply not going up as fast as they have done.

Figures released last August by the ONS show that the price of a loaf of bread has gone up by 37p since 2021, while over the same period a pint of milk has gone up by 24p – a 57% rise. Official figures also show that with the new energy price cap the average household will pay £1,928 per year for electricity in 2024 compared to £764 in 2021.

The bottom line is that support is still vital for the people and families most in need. The Public Sector and Local Authorities in particular have to ensure that the funds they received are distributed quickly, cost-effectively and accountably. That’s where outsourced payment providers like BHN can help by offering flexible, cost neutral card and voucher payments which can be ring-fenced and tracked to ensure that support is spent where it is intended.

The past two years have also shown that social and geopolitical disruption can appear suddenly and have serious consequences for domestic economics. The ability to have agile payment systems in place that allow for rapid response to changing conditions can help the Public Sector respond effectively.

One last thing I picked up from the Autumn Statement. The Chancellor in a post Statement interview stated that “we need a more productive state, not a bigger one” in light of his announcement that he will not be increasing public spending in line with inflation.

Taken against a wider picture where the current parliament is likely to be the first where household disposable income will be lower at its end than the start according to research group the Resolution Foundation, we may be faced with a situation where the demand for support remains stubbornly high while there are increasing constraints on the funds available to deliver it. In addition, we are already hearing suggestions that the Autumn Statement and its reception may be the precursor for an early General Election in Spring next year. If that is the case then a completely different picture of the economy may unfold over 2024.

To find out how we can help please contact me on 07485 376 178 or email me @ jose.bachoir@bhnnetwork.com