The Chancellor, Philip Hammond MP, delivered his second Budget yesterday and the first financial statement of the new Parliament. Not surprisingly, there was little mention of sport or recreation but announcements on housing, business rates, sporting testimonials, VAT and mental health could all have knock on impacts for our sector.
In the Chancellor’s speech, there was a running theme throughout – that the nation’s economy must be ‘fit for the future.’ Perhaps Mr Hammond has taken a leaf out of sport’s red book – as a sector, we’ve been talking about being fit for the future since 2015 and have been preparing our members for the fiscal challenges which lie ahead. We are also hosting a Fit for the Future Convention in January (if the Chancellor is reading this, there are still tickets available).
We welcome Mr Hammond’s ambition and while there was little direct reference to sport and recreation in the Budget, our members should be aware of announcements which may have unintended consequences for the sector. These include:
- Planning reforms to create more land available for housing;
- 300,000 new homes to be built every year by the middle of the next decade;
- 100,000 homes for Cambridge and Oxford corridor by 2031.
The Chancellor coupled his bold house building commitment with reforms to the planning system, which include speeding up the development process. Given the ambitious target, there is a danger that government encourages development beyond brownfield land and disused sites and into green space – the number of new homes in the Cambridge and Oxford corridor being a particular example. While government is right to tackle housing supply, the availability of green space is a vital component for people getting active and must, therefore, be protected at all costs.
- Uprating business rates from the retail price index (RPI) measure of inflation to the lower consumer price index (CPI);
- Property revaluations to take place every three years, rather than five years.
The Chancellor promised a £2.3 billion saving over the next five years for businesses effected by the increases in rates. This includes the switch in indexation from RPI to CPI and for revaluations to take place every three years, rather than five years as currently stands. While these measures will provide some temporary relief, a strategic review of the system is needed. Sports clubs, who rely on fixed premises and are not-for-profit, have seen huge increases in rates bills (up to 300% in some cases) while pubs – who operate on a for-profit basis – have benefited from a £1,000 business rate discount for another year.
- Delayed implementation of changes to the National Insurance Contributions (NICs) treatment of sporting testimonials.
Although not a new proposal, members should note that the implementation of the policy has been delayed for an extra year and will come into effect from April 2019. The full proposals will be introduced in the National Insurance Contributions (NICs) Bill next year.
- No changes to the VAT threshold;
- Upcoming consultation on the future design of the system.
We’re pleased the Chancellor decided against reducing the VAT threshold, although this is only temporary. Given that government will review the issue – through a consultation on the design of the threshold – we need to make sure the sector is ready to respond. We will be working with our members over the coming months to start preparing for this.
- A continued commitment to putting mental health on a par with physical health
- Green paper on mental health services for children and young people to be published in December.
Government’s continued pledge to making sure that mental health is on an equal footing with physical health is something which the Alliance fully supports. We look forward to seeing government’s plans next month and hope they will recognise the power of sport and recreation to help people tackle mental health problems.
We will be keeping a watching brief on these policy announcements over the coming months and will keep you updated on whether there are any long-term consequences for the sector. To be truly ‘fit for the future,’ we need a supportive policy environment which will help grassroots sport thrive and grow. Mr Hammond should take note.