Loading...

Spring Budget 2021: Key Government Spending Plans

On 3rd March 2021, Chancellor Rishi Sunak delivered the UK Budget in the House of Commons, outlining the Government’s spending plans in the coming months and years.

As the nation prepares to tentatively ease COVID restrictions over the coming months, this budget announcement was one of the most eagerly anticipated for many years. Perhaps the main takeaway for businesses across the UK is the extension of the job retention scheme until the end of September. Mr. Sunak said the scheme would continue to help millions through the challenging months ahead.

Delivering the budget in Parliament Chancellor of the Exchequer Rishi Sunak said:

“This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people.

“First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis.

“Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that.

“And, third, in today’s Budget we begin the work of building our future economy.”

COVID-19

Predictably, the initial focus of the budget announcement was around the ongoing support for those areas of the economy worst-hit by the COVID-19 pandemic. As well as the extension to the furlough scheme, the Chancellor also announced an extra £1.65 billion cash injection to ensure the Covid-19 vaccination roll-out in England continues to be a success. Mr. Sunak also announced £28 million to increase the UK’s capacity for vaccine testing, support for clinical trials and improve the UK’s ability to rapidly acquire samples of new variants of COVID-19.

Protecting jobs and livelihoods

As part of Government efforts to support, protect and create jobs, the Chancellor announced increasing support with £126 million of new money to enable 40,000 more traineeships, and doubling the cash incentive to firms who take on an apprentice to a £3,000 payment per hire. Also announced was £7 million for a new “flexi-job” apprenticeship programme in England, that will enable apprentices to work with a number of employers in one sector.

To balance the need to raise revenue with the objective of having an internationally competitive tax system, the rate of Corporation Tax will increase to 25%, which will remain the lowest rate in the G7. In order to support the recovery, the increase will not take effect until 2023. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate.

UK Infrastructure Bank

Mr. Sunak announced the formation of a new UK Infrastructure Bank to be based in Leeds. It will see an initial £12 billion in capital, with the aim of funding £40 billion worth of projects. Local Authorities will gain access to £4Bn in loans, which can be tailored for projects around transport, storage and renewable energy. Speaking ahead of the budget announcement, the Chancellor said:

“We are backing this bank with the finance it needs to deliver modern infrastructure fit for the 21st century and create jobs.

“This shows how serious we are about levelling up the country so that everybody can benefit from our future prosperity.”

The Chancellor also reiterated the need for a commitment to green investment, which the Infrastructure Bank will help with.

Environment & Green Energy

He also announced a £20 million to fund UK-wide competition to develop floating offshore wind demonstrators and help support the Government’s aim to generate enough electricity from offshore wind to power every home by 2030.

Mr. Sunak also announced £68 million to fund a UK-wide competition to deliver a first-of-its-kind long-duration energy storage prototypes which will reduce the cost of net zero by storing excess low carbon energy over longer periods.

An investment led recovery

The chancellor also spoke about Freeports, something which he said ‘could only be done now we have left the European Union.’ He announced that eight new English Freeports will be based in East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside and will be special economic zones with different rules to make it easier and cheaper to do business.

Beginning in April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment meaning they can reduce their taxable profits by 130% of the cost. This is worth £25 billion to companies over the two-year period the super-deduction will be in full effect.

Support for the whole UK

In addition to the announcements which apply to the whole of the UK, this budget also provides an additional £2.4 billion to the devolved administrations in 2021-22 through the Barnett formula.

  • £1.2 billion funding to the Scottish government
  • £740 million funding to the Welsh government
  • £410 million funding to the Northern Ireland Executive

Grahame Steed, BiP Solutions’ Content, Research and Communications Director said:

“Given the experience of the past 12 months, it is encouraging to see continued and increasing investment into public service delivery and particularly areas such as infrastructure and sustainable energy. This, and the exciting changes heralded by the Transforming Public Procurement Green Paper, make it a time of opportunity for all engaged in the public sector supply chain – and we look forward to supporting buyers and suppliers as we navigate our way through this period.”

The Changing Face of Procurement in 2021 – Keeping you informed

Back in December, the Government published their Transforming Public Procurement Green Paper, with the goal of speeding up and simplifying procurement processes, placing value for money at their heart and enabling innovation in public service delivery. But what does this mean for UK buyers and suppliers and what challenges lie ahead in the coming months?

Here at BiP Solutions, we are delighted to announce an all-new series of monthly briefings and webinars specifically designed to help buyers and suppliers navigate the challenges which may arise in light of the proposed changes to the current procurement framework. Both the briefings and the accompanying webinars have been specifically tailored to help these organisations to ensure they can work effectively, compliantly and responsively in what is a dynamic and fast-changing environment.

We will also be hosting live events and creating other assets throughout 2021 and beyond, making sure we are supporting our clients through what will be one of the largest set of changes in the public sector procurement landscape for decades.

As well as the upcoming briefings and webinars, our research arm, BiP Inform will soon be releasing the report from our inaugural research project, aiming to give us a better understanding of the thoughts of public sector buyers and suppliers regarding the latest proposals.

‘The proposals within the Transforming Public Procurement Green Paper represent the largest changes to procurement process and practice in the UK for decades. At BiP Solutions we are tracking developments closely and have committed to ensuring our customers are the best informed about what these changes mean and how they should prepare for them. Exciting times lie ahead, but buyers and suppliers should engage with our campaign to ensure they have the information and insight they need to stay compliant and competitive as the proposals become policy and then practice’ (Grahame Steed, Content, Research and Communications Director, at BiP Solutions.)

For all updates and announcements regarding the Green Paper and other key developments in 2021, please visit our dedicated site: www.bip-inform.com

ENDS

The Queen’s Speech, December 2019

18 December 2019 saw the delivery of the Queen’s Speech to Parliament, setting out the new Government’s agenda. Here, we take a look at some of the elements of proposed legislation that are of most relevance to BiP Solutions’ customers.

The UK’s departure from the European Union on 31 January was a priority, with a total of seven separate points of legislation covering different aspects of Brexit discussed. The proposed legislation covers areas agriculture, fisheries, combating “unfair trading practices” and aiming for stability in financial services. The Department for Exiting the EU itself will be dissolved on 31 January, with some of its functions rolled into the Department for International Trade.

Healthcare is another key area of focus, with legislation being introduced to enshrine a £33.9bn increase in NHS funding by 2023/4. The Mental Health Act will also be reformed, and a Medicines and Medical Devices Bill aims to deliver faster patient access to medical innovations, simultaneously supporting the growth of this area in the UK.

Sustainability and environmental damage are also mentioned, with an Environment Bill establishing a new Office for Environmental Protection, introducing charges for specific single-use plastics, and banning exports of plastic waste to non-OECD countries. This will necessitate the development of capacity to process this waste in the UK, meaning there will need to be investment and development of the relevant infrastructure.

Infrastructure was much discussed during the campaign for the recent election, and it receives specific attention in the Queen’s Speech too, with commitment to a National Infrastructure Strategy that will outline how investiture in public services and infrastructure will be achieved while keeping government borrowing and debt under control. There will also be a move to improve broadband provision, with legislation facilitating the installation of digital infrastructure. You can read more about the implications of the Speech for the construction industry at Construction Online.

Finally, there were many announcements made in defence and security, ranging from new legislation covering espionage to prisoner sentencing. Possibly the major announcement in this area for businesses is the commitment to spend a minimum of 2% of GDP on defence. Defence Online has covered this in more detail.

The text of the Queen’s Speech is available here while the Government’s briefing notes covering the proposed bills are here.

New Brexit Guidance for Procurement

Business people figurines shaking hands on map of Europe

The Government has released new guidance specifically aimed at those working in public procurement as to what the effect of the various possible Brexit outcomes will be for the industry.

The Procurement Policy Note (PPN), ‘Preparing the UK for Leaving the EU’, sets out guidance that will be applicable as soon as the UK leaves the EU, scheduled for 29th March. The guidance aims to cover all potential outcomes, whether or not the UK has negotiated a withdrawal deal with the EU. The PPN clarifies areas including how procurement notification requirements in the different constituent countries of the UK will be affected, the currently assumed length and scope of an ‘implementation period’, and – most crucially – the changes that suppliers will have to make if there is a ‘no-deal’ exit.

The PPN and explanatory notes can be accessed here.

BiP Solutions is specifically named in the explanatory ‘frequently asked questions’ supplement to the PPN, as one of the first e-senders to announce plans to integrate with the new, UK-specific tenders notification service that may supersede the Official Journal of the EU (OJEU) in the case of ‘no deal.’ This represents a potential major change for UK suppliers and how they do business. To find out more, read our recently updated guidance document, ‘Procurement After Brexit: Deal or No Deal‘, which complements the Government’s PPN.

For the latest updates on what Brexit means for procurement, visit BiP Solutions’ dedicated Brexit page.

Registration necessary to work with EU after Brexit

Woman at verify login page on computer screen

As preparations for the UK’s departure from the EU intensify, procurement professionals should ensure they are aware of the requirements to register for an Economic Operator and Registration Identification (EORI) number.

Late February’s announcement that UK businesses will be able to continue to trade with members of the GPA in the event of a ‘no-deal Brexit’ is undoubtedly welcome. However, businesses need to take steps to make sure that they will individually be able to do business internationally after 29th March. The primary requirement for businesses looking to continue to work with the EU will be to have an EORI number.

An EORI number is a requirement for moving goods into or out of the EU. The purpose of an EORI number is to allow HMRC to identify your company and collect the appropriate duties. If you do not have an EORI number, you may face delays and even increased costs, for example storage fees if HMRC cannot clear the goods involved in your transaction.

In the event that the UK leaves the European Union without a negotiated deal, you will need an EORI number to continue trading with the EU. This requirement will be effective as of ‘exit day.’

You can apply for an EORI number now even if you do not use it. While the situation around a potential deal between the UK and EU remains dynamic, the possibility of ‘no deal’ means that businesses that currently work with the EU may want to consider the importance of an EORI number. The Government advises that the application process should take less than ten minutes. Ensure that you have all the information you need to apply by viewing the Government’s advice here.

To learn more about how public procurement could be affected by various possible Brexit scenarios, click here to view BiP’s updated factsheet, ‘Procurement After Brexit: Deal or No Deal.’

We are currently dealing with a technical issue causing our services to be temporarily offline. Our customer service team are reaching out to those who may be affected while the situation is resolved. We apologise for any inconvenience caused.

Select a page to copy this section to:

Select where in the level you want it inserted: