Tag: Economics

A stronger economy – locally and nationally

In 2015, after five years with the Lib Dems in government locally and nationally, Cheltenham was enjoying its strongest economy in years with a big drop in unemployment, local businesses reporting healthy order books and both businesses and householders still enjoying low interest rates and mortgage payments.  As MP, Martin backed both the coalition government and Cheltenham’s LibDem-led council in taking the tough decisions necessary to build sustainable prosperity and worked hard to lobby for and promote local business.

All this is now at risk from the Conservatives’ suicidal drive towards ‘Brexit’ which could could see the UK drop out of the world’s largest single market like a crate of eggs out of the back of a lorry.  The Conservatives’ initial arrogance and aggressive approach towards the EU negotiations and their chaotic and unco-ordinated approach to Brexit generally is undermining business confidence further.

Click on the image to watch Martin working for local business when he was MP: opening the new Chamber of Commerce business centre

Back in 2010, the new coalition government inherited a massive financial crisis from the last Labour government.  Whoever you blame, the situation in the 2009/10 financial year was that:

  • Government was spending £153 billion pounds* a year more than it was raising
  • This represented 10.2%* of GDP (the value of the economy)
  • If this hadn’t been brought under control, our economy would quickly have gone the way of Greece and others and our interest rates – which set the cost of borrowing by businesses as well as your mortgage – might have skyrocketed, doing serious damage to the economy, increasing the cost of living for homeowners and throwing millions out of work
  • Unemployment in Cheltenham was already 2251 or  4.5%**, the highest in years
Martin at Safran (then Messier-Bugatti-Dowty)

To strengthen the economy, Martin and the Liberal Democrats backed the tough decisions – opposed by Labour – which did bring public spending under control, reduced that overspend by a third and reassured financial markets so that business borrowing and mortgage rates in Cheltenham were kept low as we fought off recession. By 2015:

  • Government overspending was expected to be £91.3 billion*, still very high but down by a massive £61 billion a year
  • This represented 5% of GDP* – half the value it was five years previously
  • The economy was the fastest growing economy of any of the G7 group of major economies, growing 2.6% in 2014/15 and it was estimated to keep growing at 2.5% a year – until the disastrous Brexit vote
  • Earnings were finally starting to go up too.  Together with the fall in fuel prices, this helped everyone by bringing the cost of living down this year.  The Office of Budget Responsibility confirmed living standards were higher in 2015 than they were in 2010.
  • Unemployment in Cheltenham fell to 854 or just 1.6%**.  Under the coalition, the UK had the strongest employment growth in the G7.  The number of young people claiming unemployment benefits was at its lowest since the 1970s.

Sources: * Office of Budget Responsibility 2014/15 ** Department of Work & Pensions

But a stronger economy isn’t just a fast-growing one – it must be sustainable too:

  • The coalition launched the world’s first Green Investment Bank and locked investment in low-carbon energy into energy markets through the Energy Act and has created a record number of green jobs. In Cheltenham, Martin has backed local companies like Tidal Lagoon Power and Commercial who have pioneered sustainable jobs and business
  • The coalition created more than 2 million new apprenticeships, 2,610 of them in Cheltenham, building skills for the future
  • Whether we were still in recession or growing again, the coalition kept investing in infrastructure, maintaining spending on public transport and committing another £6 billion investment to flood defences, including more flood defence work in Cheltenham to protect another 240 properties
  • The coalition committed to the largest ever sustained investment in Britain’s science base, including a £2.9 billion Grand Challenges fund to enable the UK to invest in major research facilities.  This progress is now particularly at riosk from Tory Brexit plans.

The economy was stronger locally too.  Cheltenham’s LibDem council faced cuts along with other local authorities –  their net budget fell in cash terms by about 12% over seven years, from £16.1m to £14.2m – but despite the cuts, there was no crisis at Cheltenham Borough Council:

  • £8.5m was found in savings and additional income and ‘austerity’ has had little impact on frontline services. Savings have been made by radical management efficiencies, sharing back office functions and major functions like waste collection with other councils, and turning arts and leisure management over to a charitable trust of which Martin is now an unpaid trustee.
  • Martin and the borough council worked together to win major new investment in developments like the Brewery, North Place and in local transport, including £5m for local sustainable transport, £45m for the redoubling of the Swindon/Kemble line to improve services  to Swindon, Reading and London and an ambitious plan to upgrade parking, access and facilities at Cheltenham Spa station which has now won widespread backing.

In stark contrast, The Conservative-led county council has lurched from crisis to crisis – taken to court over its library closures, signing up to a wasteful incinerator contract turned down by its own councillors then forced through by the administration, slapping new on-street parking charges on small business areas and leaving our roads in a total mess.

Martin on a return visit to the Cheltenham business where he worked before being elected MP

As MP, Martin lobbied for and promoted local companies from publisher Edward Elgar to worldbeating clothes retailer SuperDry, from engineering firms like Spirax Sarco, DIS and CF Roberts to IT firms like Innov8ive software.  He worked with business organisations like the Chamber of Commerce, Gfirst LEP and Cheltenham Connect to promote and support local business.

He promoted Cheltenham’s Festivals in Parliament with an eye to drawing even more valuable visitors to the town and encouraged council backing for areas like the Lower High Street that deserved more support.  He supported a more determined strategy to market Cheltenham to visitors, investors and relocating businesses which has now happened with the recent creation of Marketing Cheltenham.

Budget fails Cheltenham

Philip Hammond’s first and last Spring Budget today has failed Cheltenham, say local Liberal Democrats.

‘This was the crunch moment for NHS funding and an opportunity to put right the looming financial crisis facing many Cheltenham schools as well’ said Martin Horwood, Cheltenham’s Lib Dem parliamentary candidate and former MP. ‘And on top of that he has hit our 6,800 strong army of self-employed workers with a bigger bill too.’

‘Gloucestershire Hospitals Trust (which runs Cheltenham General and Gloucestershire Royal) is in the red and going deeper into the red’ he said ‘and after the failure of the Fair Funding campaign headed by our own MP, we now know many local schools are heading that way too.’
‘The Chancellor could have sorted out both these problems today but he failed on both counts’.

‘The NHS got an extra £425m but that won’t even clear this year’s deficit of nearly a billion pounds. The NHS could have received a much bigger cash injection while all parties discussed a long-term solution to the funding of social care, acute hospitals and mental health in this country, as the Lib Dems in parliament have been calling for. We heard more for social care which is welcome but won’t get Cheltenham General off the critical list’

‘And the Chancellor announced money for new grammar and faith schools but nothing at all that will help secondary schools like Balcarras, Pate’s and Bournside and many local primary schools which are now facing the prospect of growing deficits and some very hard choices after the failure of the Fair Funding campaign. Far from correcting the historic underfunding of Gloucestershire schools, the government’s proposed new national funding formula is actually going to leave many existing local schools worse off and the Chancellor did nothing to help with this looming crisis today.’

‘To cap it all, he has hit the self-employed with a National Insurance hike as well, breaking a clear Conservative manifesto pledge. Cheltenham has a big self-employed population – over 6,800 people according to a recent survey and the Conservatives have told them that instead of sharing in the benefits of the economic growth they are helping to create, they basically have to cough up more.’

Schools funding ‘hoax’ condemned

Cheltenham’s Lib Dem parliamentary candidate and former MP Martin Horwood has condemned as a ‘hoax’ the government’s planned National Funding Formula (‘NFF’) which was supposed to deliver ‘Fair Funding’ for local schools and correct the historic underfunding of counties like Gloucestershire but is actually going to mean two Cheltenham secondary schools LOSING £161,000 a year between them and gives only a fractional increase in funding to a third.

The figures buried deep in a Department of Education spreadsheet reveal the following changes from the planned ‘NFF’ for Cheltenham schools.  The first year of the NFF limits losses to 1.5% in Year 1 but the table below shows the hit schools will take if the NFF is later implemented in full:

Baseline funding 2016/17 Funding under NFF Loss/gain % change Protected Yr1 funding under NFF Loss/gain % change
Pate’s £2,675,000 £2,614,000 -£61,000 -2.3% £2,636,000 -£39,000 -1.5%
Balcarras £4,499,000 £4,399,000 -£100,000 -2.2% £4,434,000 -£65,000 -1.4%
Bournside £6,174,000 £6,189,000 £15,000 0.2% £6,189,000 £15,000 0.2%
Pittville £3,135,000 £3,238,000 £103,000 3.3% £3,225,000 £90,000 2.9%
All Saints £4,147,000 £4,461,000 £314,000 7.6% £4,268,000 £121,000 2.9%

Source:Department for Education (http://www.gloucestershire.gov.uk/schoolsnet/article/122078/DfE-Announcements-on-a-national-funding-formula-for-schools, spreadsheet at https://consult.education.gov.uk/funding-policy-unit/schools-national-funding-formula2/supporting_documents/Impact%20of%20the%20proposed%20schools%20NFF_20161220.xlsm)

So Pate’s stands to lose at least £39,000 in Year 1 and then £61,00 a year if this formula is implemented in full.  Balcarras stands to lose £65,000 in Year 1 and then £100,00 each year if the formula is then implemented in full.  Bournside gains only a fractional 0.2% increase under the formula.

Martin said: “We fought a cross-party ‘Fair Funding’ campaign for years to correct the historic underfunding of Gloucestershire schools.  If the government presents this as the answer to that long campaign, then this is a complete hoax.  Two out of our five secondary schools are going to lose out even more – over a hundred thousand pounds a year between them even in the protected first year.  Our biggest school Bournside gets only a derisory 0.2% increase.  This doesn’t only do nothing to correct the longstanding unfairness in school funding for Gloucestershire, it’s actually going to make things worse for thousands of Cheltenham students.

Worse still, the deficits I warned about in the election campaign if Tory spending plans went ahead are still on the cards and this will do nothing to stop them.  Within two years, schools across Cheltenham are either going to be plunging into deficit like our NHS trusts or cutting back on classes and facilities.  The speed with which this Conservative government is unravelling the good financial mnanagement of the coalition years is breathtaking.”

Autumn Statement means no extra cash for desperate local NHS

Today’s Autumn Statement by the Chancellor Philip Hammond includes no extra cash for local NHS trusts facing spiralling deficits and looming cuts to local services.

The Chancellor said in his speech: ‘The government, Mr Speaker, has pledged to invest in our NHS and we are delivering on that promise: backing the NHS’ Five Year Forward View plan for the future with £10 billion of additional funding a year by the end of 2020-21.’

But this ‘additional’ funding was a re-announcement of current plans and was first promised during the General Election campaign after the Liberal Democrats manifesto raised the issue of NHS finance.  The Government’s version of this funding has been condemned as misleading by the Commons Health select committee chair Dr Sarah Wollaston who recently wrote to the government telling them that they were giving a “false impression that the NHS is awash with cash” and that they had “given the NHS what it asked for” when this was not true and that in fact local NHS trusts faced “overwhelming” financial pressures. 

Liberal Democrats in parliament had called for an urgent extra cash injection of £4 billion for health and social care this year, on top of already announced plans.

Meanwhile, according to a recent report by the independent health think tank, the King’s Fund, two-thirds of NHS trusts across the country are now in deficit and the trend for the NHS as a whole is going sharply downwards [see link to King’s Fund charts below]. Nothing in today’s statement changes this.

Cheltenham Liberal Democrat parliamentary candidate Martin Horwood said today: ‘Astonishingly the Chancellor barely mentioned the NHS and only then to repeat an earlier funding announcment which has already been exposed as misleading.  It is quite clear from independent analysis that there is a mounting financial crisis in the NHS and that two-thirds of local NHS trusts are now deficit – in contrast to the situation under the previous coalition government.  We now know this includes Gloucestershire with Gloucestershire Hospitals NHS hospital Trusts alone facing an estimated £24 million pound deficit this year.’

‘This poses a direct threat to valued local NHS services like A&E, mental health services and local maternity units’ he said.  ‘Without that extra cash injection local NHS chiefs will be forced into making damaging cuts.  I understand that Brexit has made the financial situation much tighter with lower projected growth next year and for years ahead.  But the government has found enough money to put off the fuel duty increase and spend welcome billions on infrastructure, so they should have realised that the NHS needed invetsment too.’

‘The time for our local MPs to speak out is now. Most of them have a record of complete loyalty to Theresa May’s Brexit government so far – Cheltenham’s new Conservative MP has voted as the party whips have told him in every single vote.  But this Autumn Statement poses a direct threat to valued local NHS services.  So now is his moment to break ranks and speak up for and vote for local NHS services.’

NOTES

  • Commons Health select committee chair Dr Sarah Wollaston’s letter to the Chancellor accusing the government is giving a false impression of NHS finances can be found here.
  • Lib Dem health spokesman Norman Lamb MP’s call for extra tax revenue for the NHS can be found here.
  • The independent King’s Fund report into NHS finances can be found here but key charts highlighting how the NHS is funded and its deteriorating financial situation are shown in the previous news release post.