UK Autumn Statement – Chancellor speaks, anything of Procurement interest?

Well, I hope there's something of procurement interest, as for the next hour or so we're going to do live blogging on George Osbourne's speech on the UK's economic outlook and new measures he's taking.

1235pm   Here we go. "Britain is on the right track".  Deficit down by a quarter (that's deficit note, not debt. 90% of the population don't understand the difference). We're saving a lot on debt payments through low interest rates because the bond markets trust us.  Going to switch from current expenditure to capital.

1240pm  OBR (Office for Budget Responsibility) forecasts growth of -0.1% this year. So that's shrinkage rather than growth. It's all the Eurozone's fault however. The 2008/9 shock was deeper than previously thought. That's still getting in the way.  OBR growth forecasts now 1.2% in 2013, 2% in 2014, and 2.3% in 2015.  Well down on previous forecasts. 1.2 million new jobs. Unemployment much better than in Spain, France etc. Will peak at 8.3%.

1250pm  Changing the way Bradford and Bingley debts treated on Government balance sheet. Being transparent about that and other changes e.g. Royal Mail pension fund. Deficit will fall this year (not what most commentators think but he's very confident on that). Will keep falling, won't be eliminated till 2018/19 though. What will total debt be by then? Won't have debt falling until 2016/17.

1.00pm  No net rises in taxation. Continuing with national pay arrangements for health, civil service - but more freedom for schools to implement performance related pay.  Already generated £12B efficiency savings in Whitehall. If all departments reduce admin spend like Education, can save another £1B. If they all use digital etc, there's another Billion. So Departments are having budgets cut by another 1% next year and 2%year after.  Some caveats e.g. MOD equipment budget. Money saved will be re-invested in £5B capital programmes. Roads - upgrading A1, A30, M25 etc.  Taking high-speed rail to N-West and Yorkshire. More new homes, flood defences, broadband...   £600M more for scientific research infrastructure, £270M on FE colleges, £1B on free schools and academies.

Replacement for the "discredited" PFI - government wants a share of the reward because it takes its share of the risk.

1.10pm  Tax evasion. Collecting more tax, 2500 more inspectors, general anti-abuse law. HMRC will not have budget cut. Looking for big firms to pay their share too. But also need more from the wealthy. Punitive tax rates don't work. Property tax too difficult. Looks like bad news on pensions... yup, lifetime allowance going down from £1.5M to £1.25M and annual allowance from £50K to £40K.  Lucky my pension isn't that great (?) so doesn't worry me...

Pensions will go up 2.5% next year.  Reducing fraud, error and debt on welfare... that's an old chestnut! Out of work benefits have gone up faster than earnings over last few years. So benefits will go up just 1% per year for the next 3 years (except some disability benefits). Saves £3.7B by 2015/16.

1.20 pm  Same increase in tax thresholds (1%)  - so more people will fall into higher rate tax. How long before 40% becomes pretty much the standard rate?

We need to come up ways of competing with developing countries. Kind words about the Heseltine report. New money for local enterprise partnerships. Support industries where we have advantage - and  "support the supply chains of advanced manufacturing" (don't know what that means).  A new business bank - hasn't that been announced before? Help small firms further - for next 2 years, increase annual investment allowance from £25K to £250K.  Cutting main rate of corporation tax to 21%! That's a shock. Lowest rate of any major western economy. But not for Banks...

3p rise in petrol prices through fuel escalator will be cancelled.   Upping the personal tax allowance, people can earn £9400 before they pay tax.  Good news for the lowest paid.

Well, that's it. We'll have more on the new PFI scheme tomorrow, which is probably the main item of interest to procurement people. Then we have more cuts in central departments' budgets - more pain perhaps for procurement functions? But more capital investment should mean more commercial roles in areas such as Highways.

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