Budget 2006 In The West Midlands

Advantage West Midlands, along with the other Regional Development Agencies (RDAs), was asked to provide policy advice to contribute to the development of Budget 2006. This press notice responds in full to the RDAs’ advice, including the announcement that the Government will work with the RDAs to radically rationalise business support services. The West Midlands, along with other regions, has also provided advice on their priorities within long-term indicative funding allocations.

The Government is today publishing the third of its Devolving Decision Making reports. This sets out the Government’s analysis of the role that cities play in enhancing regional economic performance and identifies the challenges for building on cities’ recent economic performance.

Building on this analysis, Budget 2006 announces that the Government will review the effectiveness and efficiency of economic development and regeneration interventions across local areas, cities and regions. This will be done in preparation for the 2007 Comprehensive Spending Review. The review reflects the Government’s commitment to enabling cities and regions to improve their economic performance to deliver full employment and rising prosperity for all. It will be set within the context of further devolving decision making to the regional and local levels.

As an important contribution to delivering efficiency and devolving decision making, the Government has published today The Review of Government Offices. This provides for a more strategic, streamlined role for the regional Government Office network.

Measures announced today which are particularly relevant to individuals and businesses in the West Midlands include:

• in response to advice from the RDAs, an announcement that the Government will work with RDAs and other local and national bodies to reduce the number of business support services from around 3,000 now to no more than 100 by 2010;
• the launch of a consultation document, The Science and Innovation Investment Framework 2004-2014: Next Steps, which proposes further actions to take forward the Government’s ten-year strategy for science and innovation. The document invites consultation responses on new measures to create a more effective science and innovation system in the UK, and maximise the impact of public investment in research on the economy;
• announcing that Richard Ellis, Chair of the East of England Development Agency, will jointly chair a working group with the Financial Secretary to the Treasury, consisting of RDAs, business organisations and the Carbon Trust who will examine how best to provide information and support to businesses on energy efficiency;
• publishing a new strategy before the summer to create a step change in the Government’s drive to market the UK economy internationally. To deliver the strategy, UKTI will undertake a programme of organisational change, allocate further resources to increasing trade with emerging markets and implementing an international R&D strategy;
• an intention to extend additional support to firms with between 250 and 500 employees that are above the current SME research & development tax credit threshold. This will build on the £800 million of R&D investment already carried out by firms in the West Midlands;
• the announcement that ten local enterprise growth initiative schemes from fifteen local authorities have been awarded £126 million over three years. This will mean £12.6 million for the West Midlands;
• an HM Revenue & Customs announcement on its plans to reduce the administrative burden of the tax system. Other Government departments will also set out the ways in which they are implementing the Hampton Review and reducing regulatory burdens;
• highlighting the proposals published in the Welfare Reform Green Paper in January 2006, including the national roll-out of the successful Pathways to Work pilot projects for incapacity benefit claimants and replacing the current incapacity benefits with a new Employment and Support Allowance;
• funding for more frequent work focused interviews for lone parents. This will impact on over 610,000 lone parents across the UK, and potentially affects 58,400 lone parents in the West Midlands;
• confirming the rise in the adult rate of the National Minimum Wage to £5.35 in October 2006, affecting 150,000 people in the West Midlands;
• announcing the roll-out of the Women in Work commission recommendations to expand skills coaching pilots on the basis of the successes of pilots such as Birmingham & Solihull and Train to Gain as piloted in Birmingham & Solihull, Shropshire and the Black Country;
• refocusing the Fortnightly Job Review from June 2006 to ensure that only those who are able to demonstrate that they have met their jobseeking responsibilities will be able to continue their benefit claim. This potentially affects the 103,900 in the West Midlands currently claiming jobseeker’s allowance;
• a commitment to increase the child element of the Child Tax Credit at least in line with average earnings up to and including 2009-10, building on the support the Government is already providing to 426,900 families in the West Midlands via the Tax Credit system;
• an announcement that the Child Trust Fund, which became operational in April 2005, will be extended so that all children will receive an additional payment at age 7 of £250 and children from lower income families will receive £500;
• giving over 60’s and disabled people in England free off peak nationwide bus travel from April 2008. Approximately 789,715 in the West Midlands will be eligible for free travel;
• an update on progress towards the Government’s target to relocate 20,000 public sector posts out of London and the South East. Posts have been relocated to every nation and region including 197 to the West Midlands;
• announcing that an additional £2million has been made available for a national competition to celebrate innovative projects run by young people as part of the Youth Opportunity Fund and Youth Capital Fund. To date, the West Midlands has been allocated £6.2 million from the two funds; and
• funding of £100 million so that every area will benefit from neighbourhood policing by April 2007, bringing the total number of Police Community Support Officers (PSCO) in England and Wales to 16,000 by April 2007, meaning 418 more PCSO’s for the West Midlands.