The Chancellor is set to resist Tory pressure to help cash-strapped councils during his Spring Statement today.
Philip Hammond is expected to deliver a low-key financial update despite a plea from Conservative former Minister Gary Streeter to help councils with finances “cut to the bone”.
Mr Streeter told the Commons yesterday that the Government has an “opportunity” to be “more generous with efficient local authorities”. But officials were keen to play down the Chancellor’s statement as a short announcement on the state of the public finances rather than an outline of new tax and spending policies.
Economists expect Mr Hammond will announce Government borrowing is set to be about £7bn lower in 2017-18 than had been predicted when he unveils the latest forecasts of the Office for Budget Responsibility (OBR), which will for the first time include spending estimates for the £35-39bn Brexit “divorce bill” agreed with the EU in December.
But the Chancellor will stress the need to keep a strong grip on the Treasury purse strings given Britain’s £1.8 trillion debt.
Our public services are at breaking point and many of our local councils are near bankruptcy.Shadow Chancellor John McDonnell
The Northern Powerhouse Partnership (NPP), a body representing civic and business leaders in the North, was not expecting new investment in the region.
Mr Hammond will instead announce consultations on issues such as cutting environmentally damaging plastic waste ahead of a full-scale Budget in late autumn.
NPP director Henri Murison said: “The Spring Statement will not provide the investment the North needs, as funding for initial phases and major decisions will likely wait till the Budget this autumn.”
Meanwhile, a York-based charity said more working families have been locked in poverty under the Tories.
The Joseph Rowntree Foundation said the risk of being in work and in poverty had risen from 19 per cent to 32 per cent for single parents since 2010, and from 15 to 18 per cent for couples with children. Shadow Chancellor John McDonnell said Mr Hammond “must use today to act and end austerity”.
“Our public services are at breaking point and many of our local councils are near bankruptcy,” he said. “He needs to listen to the calls from across the political spectrum, including the Tory council leader in his own constituency – to end the financial crisis in our public sector.”