Homelessness, Housing, Recruitment, Skills, Welfare to Work

BUDGET 2010 summary points!!

Welfare reform measures in this Budget reduce overall expenditure on social security, and save £11 billion in 2014-15

Tax Credit and child benefit
Reduced tax credit eligibility for families with household income above £40,000 from April 2011. The Government will increase the rate at which tax credits are withdrawn once household incomes rise.

Freeze Child Benefit to fund increases in the Child Tax Credit which is better targeted on low-income families.

Government admits that this Budget will have no measurable impact on child poverty in the next two years. Frank Field will lead an independent review on poverty and will make recommendations on potential action to tackle the underlying causes of poverty

From April 2011, the Consumer Prices Index (CPI) will be used for the
indexation of all benefits, tax credits and public service pensions.

The rates of Child Benefit for the first and subsequent children will be
frozen for three years from April 2011

Local Housing Allowance Rates will be capped at £250 per week for a one bedroom property, £290 per week for a two bedroom property, £340 per week for a three bedroom property and £400 per week for four bedrooms or more.

Objective medical assessment will be introduced for Disability Living Allowance.

Lone parents whose youngest child is aged 5 or above will be eligible for Jobseekers Allowance rather than Income Support and existing customers will be transferred from Income Support to Jobseekers Allowance from April 2012

The government will reduce and then stop Government contributions to Child Trust Funds. The Government also announced that the Saving Gateway is not affordable and it will not be introduced in July 2010.

Two-year pay freeze for public sector workforces, except for workers earning less than £21,000 a year who will receive an increase of at least £250 per year in these years. This will save £3.3 billion a year by 2014-15

The Enterprise Finance Guarantee (EFG) supports lending to viable small businesses that lack sufficient collateral or the financial track record to access a normal commercial loan. To ensure that more businesses have access to credit as the economy recovers, the EFG facility for this year is being increased by £200 million to support additional lending of up to £700 million for small businesses until 31 March 2011. In addition, a processing target of 20 business days will be introduced for all major lenders participating in the EFG. This will provide certainty for businesses about how long their applications will take to process.

The Government will create the Growth Capital Fund. This is to address the Rowlands Review findings that, for some fast-growing SMEs, capital for growth is not being provided by the market and this problem is exacerbated by the recession. To support small businesses with high growth potential, a new Enterprise Capital Fund is being launched. This new Fund will form part of the existing £237 million programme of Enterprise Capital Funds and will provide an extra £37.5 million in equity finance. It will be funded through a £25 million Government contribution and £12.5 million in private co-investment.

The standard rate of Value Added Tax (VAT) will increase from 17.5 per cent to 20 per cent from 4 January 2011. The increase will raise £13.5 billion a year

The Office of Budgetary Responsibility projects that: public sector net borrowing will decline from its peak of 11.0 per cent of GDP in 2009-10 to 1.1 per cent of GDP in 2015-16;the ‘structural’ current deficit will be eliminated by 2014-15, two years earlier than planned in the March Budget, with a projected surplus of 0.3 per cent of GDP in that year, rising to 0.8 per cent of GDP in 2015-16;

Government spending and Government Receipts

Small businesses
Government plans to promote small business procurement by publishing central Government tenders online and free of charge. This facility will be made available by the end of 2010

National Insurance
The number of employees for whom employers pay no NICs will rise by 650,000 becasue the government has increased the threshold for employer National Insurance Contribution by £21 a week above indexation.

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