Large greenfield sites part of 35 low-tax investment zone bids in England

Large greenfield sites in England have been identified in 35 councils’ applications to be part of deregulated low-tax investment zones.

Sandra Laville 

Seventy-seven areas have been identified for development in the zones, where key environmental protections and planning regulations will be relaxed to encourage fast growth, according to data gathered by an environmental campaigner.

Two councils, Stroud district council and Oxfordshire county council, have refused to take part. The Oxfordshire council leader, Liz Leffman, said the deregulation was incompatible with its net zero aspirations and commitment to protect and enhance biodiversity.

But across the country many other councils have submitted applications for the zones. There are several applications covering ports as well as commercial units and large housing developments on greenfield sites.

The government has not released any details of how many councils had expressed interest in creating low-tax zones by the deadline of 14 October.

Guy Shrubsole, an environmental campaigner, has used responses to freedom of information requests, council announcements and other data to identify 77 areas where zones could be agreed. These include 20 in Kent, four large housing sites in Gloucestershire, three areas of Dorset, three in Cornwall, and parts of Hampshire, Lancashire, Peterborough, West Midlands, Suffolk, Bedford and Plymouth. The applications include several ports.

Link to facebook page here. This also gives link to expandable Google maps and data base

In Derbyshire, the areas include 300 acres of land for a major tourist resort on the outskirts of the Peak District. In Gloucestershire, one application includes plans for 10,000 homes on a greenfield site at Tewkesbury.

Kent Wildlife Trust said 17 protected wildlife sites in the county could lose environmental protections if the zones allow developers to bypass environmental regulations.

Evan Bowen-Jones, the chief executive of Kent Wildlife Trust, said: “Nature isn’t an optional extra, it’s a must if people are going to thrive. Restoring nature and producing our food with less chemicals will help combat climate change, help our economy, and give our children a healthier future. We must not let this government take us backwards at this critical point in time, when we still have a chance to prevent irreversible damage to society.”

In Hampshire, the New Forest national park authority has said it will not accept investment zones in the area.

“In our role as the sole statutory planning authority for the New Forest national park area, the authority does not support the principle of investment zone designation for sites within the national park due to the incompatibility of a liberalised planning approach with the high level of protection afforded to the national park,” the authority said this month.

There is no ban on creating an investment zone in a national park, site of special scientific interest or areas of outstanding natural beauty. Government guidelines only ask councils to identify if their zones overlap these areas.

There is no limit to the number of investment zones councils can apply for. There are also reports of concern within the Treasury at the reduction in tax receipts from the zones, which contain projects that were going ahead anyway.

Councils have only received meagre details of how the investment zones will work. Cllr Tony Ferrari, of Dorset council, said: “We have received only limited detail so far from government about how investment zones will work. Our expressions of interest do not represent a commitment by government or by Dorset council. We await further detail from government so we can assess the potential pros and cons of an investment zone before making any formal commitment following council processes.”

Analysis by the Woodland Trust found the zones could put ancient woodlands at risk.

A spokesperson for the Department for Levelling Up, Housing and Communities said further details on the zones would be released in due course.

IFS: local government funding system ‘out-of-date’ and ‘unsatisfactory’

The current funding system for local authorities in England is “out-of-date and arbitrary”, which threatens the government’s levelling up agenda, a new report by the Institute for Fiscal Studies (IFS) has found.

Aysha Gilmore 

The IFS’s report outlined that the government has not updated its main estimates of councils’ spending needs since 2013, which were predictions based on old data, sometimes from as far back as the 2001 census.

“As a result, funding allocations are increasingly out-of-date and arbitrary in relation to local socio-economic circumstances,” the report said.

The research found that local government funding does not consider the differences in population growth since it was last updated. In addition, the spending needs and revenue-raising capacity of authorities are taken into account in an ad-hoc way, which in the case of council tax is “arguably unfair”.

David Phillips, the IFS’s associate director and author of the report, told Room151: “The council funding system hasn’t really been a system at all in recent years – it lacks a suitable mechanism for estimating councils’ spending needs and their capacity to raise revenue themselves, and for allocating government funding accordingly.”

Evidence by the IFS found that areas with higher per capita needs in 2013-14 on average saw larger government funding cuts. This resulted in the most deprived councils in the country receiving 10% less funding for adults’ and children’s social care than their assessed needs, whereas the least deprived authorities gained 20% more funding than their estimated needs.

“[Government] approaches have over-prioritised funding stability by not accounting for changes in spending needs at all.

“In the case of police and councils, they have also, until very recently, worked against the ‘levelling up’ agenda by cutting funding more in areas with higher assessed needs and higher levels of deprivation.

“Indeed, the issues with police, local government and public health funding allocations are so significant that the amounts allocated to different places are essentially arbitrary,” the report said.

“The problem we have is that without up-to-date assessments of councils’ spending needs it’s very hard to say whether the levels of funding and spending we see across the country are ‘fair’, reflect differences in local needs and local decisions on council tax.”

Delayed Fair Funding Review

The IFS highlighted that “in recognition of the unsatisfactory state of the council funding system” the government had detailed plans to reform it in 2015 under the Fair Funding Review. However, no firm date has been set for the implementation of reforms.

Also, the IFS detailed that some aspects of the proposed Fair Funding Review were poorly thought out including the plan to base needs assessments for many council services on population only and not accounting for deprivation levels.

Phillips added: “The problem we have is that without up-to-date assessments of councils’ spending needs it’s very hard to say whether the levels of funding and spending we see across the country are ‘fair’, reflect differences in local needs and local decisions on council tax.

“Or whether central government funding needs to be redistributed to be fairer and deliver better value for money.

“That’s why we think it’s a shame that the Fair Funding Review seems to have been kicked further down the road.”

Social housing funding

The IFS’s report also criticised the government’s grant funding for new social housing as it is allocated to councils on the basis of competitive bidding.

“This means that there is no formal assessment of the need for such interventions in different areas, and areas with the highest housing needs may not receive funding if their funding bids are deemed to be not of sufficient quality,” the research added.

The IFS did suggest that the government’s “value-for-money approaches used in appraising bids” do account for the differences in expected benefits of projects in areas where land for housing is more expensive and affordable housing is a more pressing issue.

“The council funding system hasn’t really been a system at all in recent years – it lacks a suitable mechanism for estimating councils’ spending needs and their capacity to raise revenue themselves.”

Starmer joins calls for Truss to decline ex-PMs’ £115,000 annual grant

Not to mention the “resignation honours”.

Did she ever pass her probation period? – Owl

Keir Starmer has joined calls for Liz Truss to decline the allowance of up to £115,000 a year she will be entitled to as a former prime minister.

Ben Quinn 

The Labour leader told ITV’s Good Morning Britain on Friday: “She should turn it down. I think that’s the right thing to do. She’s done 44 days in office, she’s not really entitled to it, she should turn it down and not take it.”

The Liberal Democrat leader, Ed Davey, also said she should turn down the allowance.

The political leaders’ remarks come after a trade union representing civil servants hit out at the entitlement to the perk amid a mounting squeeze on public services and the cost of living crisis.

Mark Serwotka, the general secretary of the Public and Commercial Services Union, said: “At a time when one in five civil servants are using food banks and 35% have skipped meals because they have no food, it’s grotesque that Liz Truss can walk away with what is effectively a £115,000 bonus.

“The next prime minister must give civil servants, who work hard on essential services, an above-inflation pay rise.”

Truss can claim the funding under the public duty costs allowance (PDCA), which was introduced by the then cabinet secretary, Sir Robin Butler, after Margaret Thatcher’s resignation. Government guidance states that the PDCA was introduced to assist former prime ministers still active in public life.

The former prime ministers are entitled to claim for necessary office and secretarial costs arising from their special position in public life. In 2020-21, John Major and Tony Blair claimed the maximum allowance; Gordon Brown claimed £114,712; David Cameron claimed £113,423 and Theresa May £57,832.

Mike Clancy, General Secretary of Prospect, whose membership includes large numbers of civil servants, said: “The government are in a chaotic merry go round of ministers, with huge redundancy costs for the taxpayer. At the same time, they want to cut public servants pay in real terms and erode their redundancy conditions. It’s one rule for ministers another for hard working public servants. This is wrong.”

Jo Grady, the general secretary of the University and College Union, also joined calls for Truss to give up the allowance. She said: “Millions of public sector workers, including those who transform lives in education, are in the grips of a devastating cost of living crisis. Low pay leaves thousands upon thousands skipping meals and restricting energy use.

“They will be appalled to see the soon to be former prime minister rewarded for such catastrophic failings. She should do the right thing and give up the money.”

Steven Littlewood, the assistant general secretary of the FDA, which represents senior civil servants, said: “The hypocrisy is astounding. This year, the government has offered a real-terms pay cut and once again tried to attack the redundancy terms of the civil servants who are keeping this country running while we move from one prime minister to another.

“After all of that, it beggars belief that the prime minister would accept £115k a year for just six weeks in the job.”

Joe Davies, a local organiser in Brixton with the Don’t Pay group, which is demanding a reduction in bills, said: “It’s a slap in the face even as a name. We’re picking up the tab for her ‘public duty’ from our pockets, our stomachs and in our heating bills this winter.”

Truss’s pension will not receive any extra boost from her time in Downing Street. Since 2013, prime ministers have been part of the regular ministerial pension scheme, paying in a certain proportion of their salary while the government also contributes.

Blair is understood to have been the last prime minister to avail of a special prime minister’s pension. Brown and Cameron decided to forgo the scheme and join the general scheme, before doing so became law in 2013.

There is also a severance payment, which amounts to a one-off payment of 25% of the annual salary for the post that ministers have left. For prime ministers it is about £19,000 (25% of £79,000 annual salary).

Boris Johnson return would alarm markets, former Bank of England chief warns

Too late, looks like the markets are spooked already. – Owl 

The return of Boris Johnson would worry financial markets, a former Bank of England deputy governor is warning – even as borrowing costs begin to rise as the prospect looms.

Rob Merrick

Charlie Bean predicted “concern” that the extraordinary re-election of the former prime minister – tipped to have the backing of more than 100 Tory MPs – would bring fresh disarray to Downing Street.

Asked if it might “spook” the markets, he said: “There might be some concern about whether this was going to be a stable government again, given the instability that we had at the end of Johnson’s term as prime minister.

‘I think market participants might be concerned that, even if the fiscal statement coming up imminently goes off OK, there might be issues further down the road.”

The warning came as the interest rate demanded by investors buying government gilts rose sharply after Mr Johnson was installed as the bookies’ favourite to succeed Liz Truss.

It was soaring borrowing costs after Kwasi Kwarteng’s disastrous mini-Budget that forced the Bank of England into an emergency rescue – instability only brought to an end by dramatic U-turns on tax cuts.

Professor Bean said the Treasury must find £30bn of spending cuts or tax hikes to claim convincingly that it has a plan to get a grip on borrowing and debt.

Even if the savings are found, “there will then be a question of whether they can get a fractious Conservative Party to support all the measures”, he told BBC Radio 4.

The warning comes after a former cabinet secretary advised that the new prime minister must be in place by Tuesday to avoid the risk of a market backlash and higher interest rates.

A former Johnson aide and now critic of the former leader has said he is enjoying a surge in support among Tory MPs and has a “very” good chance of returning to No 10.

If he wins the support of 100 MPs and enters the race on Monday, it also increases the likelihood that it will last the week and go to a ballot of Tory members.

Meanwhile, Penny Mordaunt became the first Tory leadership contender to confirm she is running for No 10, promising she can deliver a “fresh start” for the party.

The Commons leader, who finished third in July’s leadership race, is likely to face Rishi Sunak and possibly Mr Johnson, but neither has made an announcement yet.

Ms Mordaunt is believed to have told Jeremy Hunt he will remain as chancellor, and that there will be no delay to his de facto Budget planned for 31 October.

We pay the price as “Loony Tories” set to trash the economy again

UK Government is now seen by the rest of the world as unstable. Not only is it embarrassing but each and every one of us will pay the price.

The UK’s economic outlook has been lowered to “negative” by ratings agency Moody’s due to political instability and high inflation.

By Michael Race

Moody’s changed the UK’s outlook – which is a marker of how likely it is to pay back debts – from “stable”.

Rating agencies, in essence, rate a country on the strength of its economy.

Moody’s along with another of the big credit rating agencies Standard & Poor’s (S&P) maintained their assessments of the UK’s credit rating.

Rating agencies give governments (or large companies) a score on how likely they are to pay back their debt.

The rating affects how much it costs governments to borrow money in the international financial markets. In theory, a high credit rating means a lower interest rate (and vice versa).

Each agency gives countries around the world a specific credit rating score. These range from a top mark of “AAA”, which stands for “prime”, down to the lowest reading of “D”, which stands for “in default”.

Moody’s said there were “risks to the UK’s debt affordability”, but kept its rating of Aa3, the fourth-highest level on its scale.

Meanwhile, S&P maintained the UK’s rating of AA – its third highest rating level – and maintained its previously-changed outlook from stable to negative.

The reports published on Friday do not mean the UK’s credit rating has been downgraded, but a negative outlook indicates it could be downgraded at a later date. The other outlooks countries can be given are positive, or stable, and any outlook period typically lasts 12 to 18 months.

Moody’s said there were two “drivers” behind its decision to change the UK’s economic outlook.

It said the first was “the increased risk to the UK’s credit profile from the heightened unpredictability in policymaking amid a volatile domestic political landscape”.

Moody’s said this challenged the UK’s “ability to manage the shock arising from weaker growth prospects and high inflation”.

The rating’s agency said it viewed the government’s mini-budget, the reversal of the majority of the policies in it, and the change in prime minister as a “continuing reflection of the weakening predictability of fiscal policymaking seen in previous years”.

Moody’s assessment comes after government borrowing costs rose sharply in the aftermath of the mini-budget in September when investors became spooked by the then chancellor Kwasi Kwarteng pledging huge tax cuts without saying how the government would pay for them.

The current chancellor, Jeremy Hunt, reversed the majority of the tax cuts from the mini-budget on Monday in attempt to calm the markets, but the resignation of Prime Minister Liz Truss means economic policies are on hold.

“The government’s initial inability to deliver a credible policy response to address investor concerns around this unfunded stimulus further weakened the UK’s policy credibility, which is unlikely to be fully restored by the subsequent decision to reverse most of the tax cuts,” Moody’s said.

Moody’s said the second driver of its decision to change the outlook was the “heightened risks to the UK’s debt affordability from likely higher borrowing and the risk of more persistent inflation”.

Government borrowing costs rose on Friday, while the pound sank as investors reacted to gloomy economic data amid the political turmoil.

The interest rate – or yield – on bonds due to be repaid in 30 years’ time rose back above 4%, making government borrowing more expensive. They had hit 5.17% in the aftermath of the mini-budget.

Meanwhile, the yield on bonds due to be repaid in five years’ time, which underpins the cost of new five-year fixed rate mortgages, rose to 4.09%.