Arts Council protected, national business rates scrapped in Spending Review

Arts Council protected, national business rates scrapped in Spending Review

The Arts Council will have its funding protected under the Spending Review announced today (25th November), while the government has confirmed business rates will be devolved to local councils.

The Chancellor George Osborne revealed that day-to-day spending by the Department of Culture, Media and Sport would be cut by 20%, but that the Arts Council, national museums and galleries would have their spending protected.

“The arts take £10bn of funding and put a quarter of a trillion pounds back into the economy making the cuts to DCMS a false economy,” Osborne told the House of Commons while presenting the Spending Review and Autumn Statement today.

The official Spending Review document adds: “The government is committed to supporting the arts and our world class national museums and galleries which make a rich contribution to society and our economy. The government will ensure that these sectors have the same amount of government funding in cash terms in 2019-20 as they do today.”

Osborne said the government would fund capital investments in culture across the country through a total of £1.6bn by 2020-21, including a £78m capital funding in the Factory Manchester, £2.5m funding for the Museum of Science and Industry in Manchester, £5m for a new South Asia Gallery at Manchester Museum and a £4m in Birmingham Dance Hub. The government said it also “invites the British Library to develop a business case for a print collections management hub in Boston Spa, Wetherby.”

A review of business rates is currrently underway, which will report back during the budget of 2016.

However, Osborne confirmed that under the “devolution revolution”, national business rates will be abolished, with local governments retaining 100% of the business rate revenues they collect by the end of parliament to fund local services, giving them control of £13bn of additional local tax revenues.

Under the new measures, councils will have the power to cut business rates to boost growth. However, elected city-wide mayors will be also be able to add a premium to business rates to pay for new infrastructure, “provided they have the support of the local business community through a majority of business members of their Local Enterprise Partnership.”

Local government will be able to keep money from business rates collected from shops and businesses to spend on "local services like street repairs, libraries and transport," Osborne said.

The government also announced the doubling of small business rate relief has also been extended in England for 12 months to April 2017.

Corporation tax in the UK will fall again to 18% by the end of parliament, Osborne said. It was 28% in 2010 and currently stands at 20%. The reductions mean overall corporation tax cuts will save businesses £13bn a year by 2020-21 and give the UK the lowest tax rate in the G20, according to the government.

The Chancellor also confirmed that the Apprenticeship Levy will be set at 0.5% of payroll and apply to firms employing over 150 employees. It is hoped the levy will raise £3bn a year and fund 3m apprenticeships.

Meanwhile, the high street retail discount – currently worth up to £1,500 a year to shops, cafes, pubs and restaurants - has not been renewed, which the British Chamber of Commerce said retailers will find "very disappointing".

In education, sixth form colleges in England will be given the opportunity to become academies, allowing them to recover their non-business VAT costs.

There will also be a “cash terms protection” of the current national base rate per student for 16-year-olds to 19-year-olds in school sixth forms, sixth form colleges and further education colleges in England for the rest of the parliament.

In higher education, the removal of the student numbers cap enables English universities to plan to recruit 130,000 more domestic and EU students, expanding the opportunity of a degree and increasing income by £1.3bn by 2020, the government said.

Investment in science will continue to be a priority and ensure the UK remains a world class centre of research, according to The Chancellor.

The government is taking forward the recommendations of Paul Nurse’s independent review and will introduce a new body – Research UK – which will work across the seven Research Councils.

Research UK will take the lead in “shaping and driving a strategic approach to science funding, ensuring a focus on the big challenges and opportunities for UK research”. The government will also look to integrate Innovate UK into Research UK in order to strengthen collaboration between the research base and the commercialisation of discoveries in the business community, the government said.

Earlier this week, book trade representatives told The Bookseller they were braced for today's Spending Review and Autumn Statement, fearing cuts to local councils impacting on libraries and looking out for the future of research councils and the level of research budget, whether schools’ funding will remain protected and the impact on resources for sixth form colleges, the scope and size of the proposed Apprenticeship Levy.