News

Sunak becomes Prime Minister and appoints new government

Rishi Sunak became Prime Minister last month following the resignation of Liz Truss.

He won the leadership race after his rivals Boris Johnson and Penny Mordaunt dropped out.

Sunak becomes the first British-Asian prime minister and the youngest prime minister in over 100 years.

He previously served as chancellor under Boris Johnson and his resignation was part of the reason for Johnson’s exit from office.

Previous prime minister Liz Truss resigned after 45 days in the role, making her the shortest-serving PM in British history. The resignation came after several of her own MPs called for her to resign, following ministerial resignations and U-turns on economic policies. In the days before her resignation, chancellor Kwasi Kwarteng was sacked and home secretary Suella Braverman resigned.

Sunak began naming his cabinet almost immediately with some familiar faces back in their previous roles.

Jeremy Hunt remains as chancellor. He was appointed by former PM Liz Truss a little over a week before, after her previous chancellor Kwasi Kwarteng was sacked. Upon appointment, Hunt reversed several of his predecessor’s policies. He previously served as health secretary under David Cameron.

Suella Braverman was reappointed as home secretary less than a week after her resignation following a data breach. In her resignation letter she said: “I have made a mistake; I accept responsibility; I resign.”

James Cleverly also retains his role as foreign secretary, after also being appointed by Truss.

Dominic Raab is justice secretary and deputy prime minister having previously served in the role under Boris Johnson. He did not serve in this role under Truss. He has previously served as foreign secretary and covered for Boris Johnson when he was in hospital with Covid.

Ben Wallace remains as defence secretary, a role which he has held since July 2019 and Tom Tugendhat is back as minister for security.

Thérèse Coffey is back in the cabinet as environment secretary. She briefly served as health secretary and deputy prime minister under Truss.

Her previous position as health secretary has been reclaimed by Steve Barclay who briefly held the position under Boris Johnson after Sajid Javid resigned.

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AUTUMN STATEMENT

Chancellor delivers Autumn Statement

Chancellor Jeremy Hunt has delivered his long-awaited Autumn Statement in the House of Commons.

Hunt began his speech by acknowledging that the UK is in a recession and that things will get worse before they improve.

Among the measures announced is a reduction in the threshold for when the highest earners start paying the top rate of tax, from £150,000 to £125,140. This means those earning £150,000 or more will pay just over £1,200 more a year.

There will be a windfall tax on the energy industry of 35 per cent from 1 January 2023, until March 2028. This is up from 25 per cent. There will also be a temporary levy of 45 per cent on electricity generators. It is expected these two measures will raise about £14 billion next year.

Hunt has confirmed the government departments can expect a squeeze and that they will have to make “tough decisions to deal with inflationary pressures in the next two years”. He did say that overall spending on public services will rise for the next five years after accounting for inflation.

According to the chancellor, the health budget will be protected. However, he has called on the NHS to “join all public services in tackling waste and inefficiency. He said: “That doesn’t mean asking people on the frontline to work harder, but rather asking challenging questions on how to reform all public services for the better.” Hunt has announced that the NHS budget will be increased by £3.3 billion in each of the next two years.

The chancellor included an extra £1.5 billion for the Scottish government, £31.2 billion for the Welsh government and £650 million for the Northern Ireland executive to tackle pressures on schools and the NHS.

Hunt has also announced that it is not possible to maintain the 0.7 per cent target of overseas aid spending, with spending to remain at around 0.5 per cent.

Sizewell C nuclear plant will be going ahead, which will create 10,000 jobs and provide power for six million homes for 50 years. Northern Powerhouse rail and HS2 will also be going ahead with £600 billion of investment over the next five years.

There will be targeted support for the cost of living, with additional payments of £900 to be paid to those on means-tested benefits, £300 to pensioner households and £150 to people on disability benefits.

The National Living Wage is set to rise for over 23s from £9.50 an hour to £10.42. This is equivalent to a pay rise of £1,600 for a fulltime worker.

Benefits will also rise in line with inflation. From next April, means-tested benefits including Universal Credit will rise in line with September’s inflation figure of 10.1 per cent.

Pensions will also rise in line with the 10.1 per cent inflation increase.

Rent rises in the social rented sector will be capped at 7 per cent in the next financial year.

Shadow chancellor Rachel Reeves delivered a reply, saying “Here we are at the end of 2022, three prime ministers, four chancellors and four budgets later.”

“And where do we find ourselves? In a worse place than we started the year.”

She said: “What does the chancellor have to offer today?”

“More of the same - with working people paying the price for his failure. The Chancellor should have come today to ask for forgiveness, at the very least he could’ve offered an apology.”

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Gove returns as levelling up secretary

Michael Gove has returned to his previous position as secretary of state for levelling up, housing and communities in Rishi Sunak’s new cabinet.

Gove previously served in the role under Boris Johnson, but was sacked after calling for Johnson to resign. His sacking was one of the catalysts that led to Johnson’s resignation.

Gove has also previously served as education secretary and justice secretary.

Upon the news, Cllr Tim Oliver, Chairman of the County Councils Network, said: “The County Councils Network (CCN) would like to welcome Michael Gove back to the position of Levelling Up Secretary. Michael demonstrated during his previous time in the department that he was a strong supporter of local government around the cabinet table, and understands the opportunities and challenges facing councils right across the country.

“We worked closely with Michael and his ministerial team to develop the Levelling Up White Paper and then the Levelling Up and Regeneration Bill, and it is now critical that levelling up is delivered across England. Key to this will be keeping the momentum going on the county devolution agenda, and this should include a clear commitment to the principles underpinning the white paper and turbocharging devolution, starting with announcing the next set of areas to agree devolution deals, and opening up a second round of county deal negotiations.

“Earlier this year Michael committed to providing financial certainty to the sector and we now want to work with him to deliver this. Investing in and empowering county authorities will go a long way to ensuring that local areas can boost economic growth and bolster England’s productivity in the long run, while ensuring that residents have access to excellent services and the most vulnerable are protected.”

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HOUSING

Gove commits to building 300,000 homes a year

Speaking to the BBC, housing secretary Michael Gove has said the government is committed to building 300,000 homes a year by the mid 2020s.

The commitment was part of the manifesto pledge, but former prime minister Liz Truss said she wanted to scrap “Stalinist” housing targets.

Gove claimed he wants to build more homes for ownership and rent, though meeting the target would be difficult due to economic circumstances.

He said: “We need to be straight with people: the cost of materials has increased because of the problems with global supply chains and also a very tight labour market means that the capacity to build those homes at the rate we want is constrained.”

He also said that new developments should have the consent of local communities.

Many have described the current situation as a housing crisis, with long waiting lists for council houses and many living in substandard conditions.

In 2017, chancellor Phillip Hammond outlined the target of building 300,000 homes a year by the mid 2020s and this was recommitted to in the 2019 manifesto.

Boris Johnson attempted to increase building, by forcing councils to accept new housing developments in certain areas. Though this was stopped after opposition from his own MPs.

Also, earlier this year, former housing secretary Robert Jenrick said that the government would “miss their 300,000-homes-a-year manifesto pledge by a country mile”.

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PROCUREMENT

One in five pounds of public sector procurement awarded to SMEs

Just over one in every five pounds (21 per cent) spent by Government on public sector procurement in 2021 was awarded to small and medium enterprises (SME), a report from the British Chambers of Commerce (BCC), powered by Tussell, has found.

The BCC’s SME Procurement Tracker – the UK’s most comprehensive source of data on SME procurement, in partnership with Tussell – has revealed that while the value of published public sector procurement spending with SMEs has increased, the proportion of total Government money awarded directly to SMEs has not grown over the past five years. Based on procurement expenditure data published by public bodies for transparency purposes, the value of reported public procurement spending in the UK increased significantly over the period 2016-2021. The amount spent on third-party goods, services, and works increased more than two-fold during this time, rising from £80 billion in 2016 to £181billion in 2021.

The total value of direct public spending with SMEs in 2021 was up significantly on previous years, nearly doubling from £20 billion in 2016 to £38 billion in 2021.

In 2021, just over 105,000 SMEs invoiced the wider public sector directly for a median annual amount of £32,000. However, SMEs are now receiving a relatively smaller amount of reported direct Government procurement spending than they were five years ago.

In 2016, 25 per cent of public sector procurement spending was awarded directly to SMEs. By 2021, this figure had dropped to 21 per cent, indicating that only just over one in every five pounds spent by Government on public services went straight to SMEs, excluding indirect spend with SMEs via the supply chain. This is significantly behind Central Government’s target of spending one in every three pounds with SMEs by 2022, a target which also includes indirect spend with SMEs via the supply chain, which is hard to measure.

As a proportion of their overall procurement budget, direct spend with SMEs by Local Government bodies was the highest at 38 per cent. NHS bodies across England spent 22 per cent of their procurement budget with SMEs, while Central Government was significantly lower than the average – awarding only 11 per cent to SMEs.

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