Chris Cowcher, Head of Policy, comments on what Wednesday’s Budget means for the community business sector, and reflects that it brings mixed news covering a number of issues.
The media headlines had been written before yesterday’s budget announcement with a very clear indication before the Chancellor Rachel Reeves had delivered her speech, that this was going to be a ‘tax and spend’ budget. The central message was that the Budget was for the “long-term” with an investment in economic growth its core ambition.
Whilst Plunkett welcomes the move away from short-termism, we need to work with our members to consider what immediate impacts yesterday’s announcements will have on their operations.
As a movement that is committed to delivering for local communities, and more importantly the people that live and work locally, the ‘new deal for workers’ is a concept that is broadly supported by the community ownership movement. However, the increased costs to employers, related to the rise in a National Living Wage and National Insurance contributions will need to be managed accordingly, with many community businesses having very marginal operations with little room to accommodate increase overheads.
In our pre-budget submission to HM Treasury we had asked the Government to provide clarity on the status, and future status of the Community Ownership Fund. Having been ‘paused’ due to the election, there remains a cohort of applicants awaiting an update on their Spring submissions, as well as an ever-growing pipeline of other community ownership projects seeking to apply to any future round also. Whilst nothing was mentioned yesterday, we will continue to represent the views of our members in our conversations with Government.
More positively there was a ‘watch this space’ message related to the recent National Planning Policy Framework consultation, with the Government set to respond to the consultation before the end of the year and confirm their pro-growth reforms for the planning system. With Plunkett’s ambition to see the creation of new community-owned businesses, alongside the provision of new housing, we are hopeful that there could be more opportunities for our sector coming soon.
Similarly, our sector will await with interest the trailed ‘Small Business Strategy’ which will be published in 2025. This document will provide a framework for growing the cooperative economy. With clear reference to high streets, in yesterday’s budget papers, you would assume that the Government’s commitment to a Community Right to Buy and supporting more community ownership should form a part of, and will link into, this strategy.
Finally, there was some positive news for hospitality businesses, such as community-owned pubs, who will continue to receive Business Rates relief next year. However, it will be at just 40%, which is lower than is current 75% level. Plunkett is supportive of the Government’s long-term aspiration to review business rates, and we are pleased to hear that uniqueness of hospitality and retail will be rightly recognised in any future system.
However, we will also continue to make the case for flexibility in any future decision and ask that it is local authorities who are ultimately responsible and empowered to support those businesses and enterprises in their locality who are delivering for people, place and planet.
