The Independent Revenues and Benefits Discussion Group, 2 November 2026
A hundred pounds for households, promises of devolution, more responsibilities for councils and the really difficult decisions pushed further into the future. Is this a Budget offering fresh hope, or simply another exercise in managing decline?
That was the question running through this week’s Independent Revenues and Benefits Discussion Group, where Paul Howarth led a wide-ranging examination of the Budget and its implications for households, public finances, welfare and local government.
As usual, the discussion was not short of opinions. There was some agreement, a healthy amount of disagreement and, occasionally, the sort of uncomfortable questions that deserve rather more attention than they receive in Westminster.
What emerged was a picture of a Government constrained by economic circumstances, its own political commitments and an increasingly difficult public spending settlement. But there was also a more fundamental question: are we becoming so accustomed to managing financial pressures that we have stopped asking how to resolve the problems creating them?
A Budget of breathing space, or postponed decisions?
Paul Howarth opened by describing a Budget that was deliberately modest in its ambitions.
The Treasury’s description of providing breathing space today and fresh hope for the future did not, in Paul’s view, suggest a Government bursting with confidence.
He characterised the approach as doing relatively small things now while promising more substantial changes later. Major decisions on welfare reform, social care and longer-term public spending remained unresolved.
Paul suggested that the Government was pursuing something resembling *pragmatic socialism*, encouraging entrepreneurship and economic growth while increasing state intervention in housing, education and public services.
It was an interesting strategy, but one dependent on economic growth arriving and international pressures easing.
The economic forecasts offered little reassurance. Paul highlighted weak growth, persistent inflation, high borrowing and the enormous burden of government debt interest. He pointed to debt interest costs exceeding £100 billion annually and potentially rising substantially over the forecast period.
These pressures, he argued, were restricting the Chancellor’s room for manoeuvre.
More worrying was his assessment of departmental spending plans beyond 2028.
With health, education and defence likely to remain priorities, the pressure on unprotected departments, including local government, could become unsustainable.
Paul’s conclusion was that the existing spending trajectory was simply not deliverable without significant consequences.
And that led him to a political prediction: the possibility of an early general election.
Malcolm Gardner broadly agreed, suggesting that the Government had boxed itself in through its fiscal commitments and might ultimately need a renewed electoral mandate to change direction.
The argument was not that an election would solve the economic problems. Rather, that without one, the Government might lack the political freedom to make the decisions it had so far avoided.
Neither regarded an early election as inevitable, but both questioned whether the present position could continue for very long.
The £100 question: meaningful support or political gesture?
Perhaps the sharpest disagreement concerned the proposed £100 household payment associated with Council Tax bands A to D.
On paper, the measure appears straightforward: provide support to millions of households facing rising living costs.
In practice, the panel found almost nothing straightforward about it.
Laura Bessell questioned both the policy rationale and the burden being placed on local authorities to administer it.
Why, she asked, should household eligibility be determined by Council Tax band when the relationship between property valuation and fuel poverty is so imperfect?
Someone living in a Band D property might be considerably better off than a struggling household in Band E or F.
Laura also challenged the decision to use a Council Tax system that central government itself regularly describes as outdated.
Her concern was practical as well as philosophical. Once again, local authorities were being expected to deliver a national policy at short notice, with complicated eligibility arrangements, difficult customer communications and the inevitable complaints when payments failed to arrive.
She highlighted the particularly awkward position of residents who do not pay Council Tax by Direct Debit, including those receiving full Council Tax Reduction or exemptions.
These are precisely the groups that may be most vulnerable, yet they could be among the hardest to reach through a payment system relying on bank details.
And, as Laura pointed out, all this would need to happen alongside annual billing, year-end processes and the everyday demands of revenues and benefits services.
Her frustration was understandable. The Government announces the policy. Local government inherits the delivery problems.
Sean O’Sullivan reinforced this concern from his experience of distributing financial support during the pandemic.
Even in relatively affluent areas, identifying bank details for residents who paid through other methods proved difficult.
Asking people to provide bank details so that the council could send them money frequently generated suspicion. Some residents assumed the communications were scams.
The exercise also diverted experienced recovery staff away from their normal responsibilities.
Sean’s observation was particularly telling: sometimes giving money away can be surprisingly expensive and administratively difficult.
But Claire Pearce-Crawford challenged the discussion to look beyond the administrative difficulties.
For Claire, the more important question was whether £100 would make any meaningful difference to families facing serious hardship.
Her answer was emphatic.
“It’s not going to touch the sides.”
Claire described the distressing circumstances being encountered by her financial inclusion teams, including households unable to afford basic necessities.
She spoke of tenants resorting to cutting up sheets to use as sanitary products. It was a reminder that behind debates about payment systems, eligibility and government announcements are people experiencing profound deprivation.
Her argument was that a relatively small, broadly distributed payment did little to address the underlying circumstances driving hardship.
Malcolm responded by questioning whether successive governments had become trapped in short-term interventions because they had failed to address the structural causes of poverty.
The problems had developed over many years, he suggested, through decisions affecting welfare, public services, housing and household finances. A single payment could never reverse those consequences.
Gareth Morgan, however, introduced an important counterargument.
He asked Claire whether she would have dismissed an additional £100 on someone’s bill as insignificant.
Probably not.
His point was that £100 may be insufficient, but insufficient does not mean worthless.
For some households, that money would make a difference, even if it failed to resolve their wider financial difficulties.
It was a useful challenge to the emerging consensus.
A policy can be inadequate without being entirely ineffective.
Malcolm also raised the wider issue of universal versus targeted support. Targeting can appear more efficient, but complex eligibility arrangements can exclude people, increase administrative costs and create arbitrary divisions.
Universality, by contrast, can be simpler and more reliable, although it inevitably supports some households that do not need assistance.
The debate therefore exposed a genuine policy dilemma.
Should government prioritise administrative simplicity, accurate targeting or the greatest possible financial impact on those in poverty?
Ideally, all three. In practice, the Budget appeared to demonstrate how difficult that combination can be.
Minimum wage increases: who actually benefits?
Gareth Morgan returned to an issue he has examined repeatedly: the interaction between higher earnings, taxation and means-tested benefits.
The Government understandably promotes increases in the National Minimum Wage and National Living Wage as improvements to household incomes.
But Gareth’s analysis suggests that the relationship between higher gross earnings and additional disposable income is considerably more complicated.
He explained that a substantial proportion of the extra money employers are required to pay can flow back to government through taxation and reduced benefit entitlement.
For one group of part-time workers in his analysis, he estimated that the proportion of increased earnings captured by government had risen from approximately 14% to 30%.
His wider concern was that increases presented as support for low-income households often provide considerably less financial improvement than the headline figures suggest.
As Gareth put it, much of what employers are required to pay does not necessarily reach the people the policy is intended to help.
This is particularly relevant to Universal Credit, where additional earnings can reduce entitlement.
It also raises questions for Council Tax Reduction schemes, which can introduce further withdrawal rates and cliff edges.
A worker can receive a pay increase while experiencing only a modest improvement in their actual spending power.
For local authorities designing Council Tax Reduction schemes, this should be an important consideration.
We cannot look at wages, welfare and local taxation separately. They interact, and the combined effect determines whether work genuinely improves a household’s financial position.
Devolution: more power, more complexity, but whose money?
The Government’s ambitions for devolution generated another substantial discussion.
Sean O’Sullivan highlighted the use of business rates and future revenue streams to finance major transport and infrastructure projects in London.
He questioned whether some of the emerging financing arrangements resembled earlier forms of private finance, where future income is used to support present investment.
More significantly, Sean asked whether promises of greater business rate retention would benefit all local authorities or primarily mayoral and strategic authorities.
The distinction matters.
If substantial business rate revenues were retained locally without effective redistribution, authorities with strong commercial tax bases could benefit disproportionately.
Laura Bessell was particularly concerned about this.
She warned against assuming that a system which might work well in a major city would necessarily operate fairly in rural areas.
Business rate reliefs, varying tax bases, redistribution and pooling arrangements would all need reconsideration.
A prosperous urban authority with significant commercial property is in a very different position from an area with limited business activity and substantial service demands.
Laura also questioned whether the Government had sufficient time and administrative capacity to implement such extensive changes within the current parliamentary cycle.
Her argument was that devolution of financial responsibility is not simply a matter of changing who receives the money. It requires a fundamental reconsideration of how resources are distributed between places.
Malcolm linked this to local government reorganisation.
If devolution is to work effectively, he argued, the structure of local government beneath the strategic authorities also matters.
That includes the transition to unitary councils and, in some places, the development of town and parish governance.
These changes require substantial preparation, political agreement and funding.
Ian Savigar brought a practical perspective, describing emerging work on proposed Thames Valley strategic arrangements and the possibility of shadow governance structures ahead of implementation.
Laura confirmed that such discussions were developing in Oxfordshire, while warning that disagreements between authorities and potential legal challenges could complicate progress.
She also highlighted an issue that tends to receive too little attention in discussions of structural reform: public understanding.
Residents already struggle to distinguish between county and district responsibilities. Adding new mayoral and strategic structures, even temporarily, could make accountability more confusing.
Who is responsible for potholes? Who runs Council Tax Reduction? Who makes transport decisions? And who should residents hold accountable when things go wrong?
These are not minor questions.
Devolution that residents cannot understand risks weakening the very local accountability it is supposed to improve.
Liverpool’s experience: there are advantages, but no miracles
Tom Clark offered a different perspective, drawing on experience of working within established combined authority arrangements in the Liverpool area.
He acknowledged the difficulties Laura described, particularly the transition between different structures, but argued that the longer-term benefits should not be overlooked.
Mayoral authorities, he suggested, can create opportunities for councils to think more strategically about their communities.
He compared the difference to moving from an old television to a widescreen.
Suddenly, the wider picture becomes visible.
Revenues and benefits services are no longer viewed solely through transactions such as Housing Benefit, Council Tax and debt recovery. They become part of a broader understanding of public health, housing, community wellbeing and economic opportunity.
Tom pointed to Manchester and Liverpool as examples of how wider strategic arrangements can encourage more coordinated approaches.
But he was equally clear that structural reform does not eliminate financial pressures.
Liverpool still faces demands to reduce expenditure and maximise income collection.
Devolution may provide better tools and broader opportunities, but it does not automatically provide the money needed to deliver services.
That distinction is important.
A larger authority is not necessarily a better-funded authority, and a combined authority is not immune from financial constraints.
Nevertheless, Tom’s contribution challenged the assumption that reform is simply another administrative burden.
Done well, it can change how local government understands and serves its communities.
Housing, health and poverty: the costs of disconnected policy
One of the most important parts of the discussion concerned the relationship between household finances, housing and health.
Paul had already questioned whether the Budget properly recognised the contribution of the private rented sector.
While additional investment in social housing was welcome, he argued that increased taxation on landlords could encourage some to leave the market or pass additional costs to tenants.
He also highlighted the absence of meaningful measures addressing Local Housing Allowance rates and the growing financial pressures associated with temporary accommodation.
His concern was that government policy appeared insufficiently joined up.
Claire Pearce-Crawford developed that argument from a different direction.
She described work involving housing and health services in Wales, including efforts to understand hospital admissions associated with damp and mould in homes.
For Claire, the relationship was obvious.
Poor housing contributes to ill health. Ill health reduces financial resilience. Financial hardship makes it more difficult to maintain adequate housing and wellbeing.
The cycle then repeats.
In her words:
“Health leads to finance, finance leads to poorness, poorness leads to poor health, and then it goes back around.”
This was perhaps the clearest illustration of the limitations of treating public policy as a series of separate departmental problems.
A household experiencing damp, poor health and financial hardship does not experience those difficulties as three separate administrative categories.
Yet that is frequently how public services are organised, funded and assessed.
Malcolm observed that the group regularly encounters similar connections between welfare, public health, criminal justice, housing and local government.
The question is whether government is prepared to make the structural decisions needed to address them.
A £100 payment may temporarily improve a household’s position. It does not repair a damp property, resolve insecure housing or restore access to essential health services.
And unless those underlying problems are addressed, the costs will continue to emerge elsewhere in the public sector.
Energy costs: shifting the burden rather than solving the problem?
Sean O’Sullivan questioned the structure of the energy market and, particularly, the relationship between electricity and gas prices.
He argued that electricity pricing remained too closely connected to gas, despite the growing contribution of lower-carbon electricity generation.
In Sean’s view, this was helping to sustain unnecessarily high electricity costs.
His concern was that governments continued to introduce compensatory measures rather than reform the market arrangements responsible for some of the pressures.
He also raised the possibility of further energy price shocks arising from international conflict, although these were risks being discussed rather than established future outcomes.
Malcolm and Paul acknowledged that more fundamental energy market changes had been discussed, but appeared to remain longer-term ambitions.
Once again, the central concern was the same.
Immediate assistance may be welcome, but is the Government tackling the reasons why assistance is repeatedly required?
Wales: devolution without transparency?
Claire brought the discussion back to devolution, but from a Welsh perspective.
She questioned whether the allocation and distribution of funding in Wales were sufficiently transparent to local service providers.
Her frustration was that while funding may be transferred to the Welsh Government, it was not always easy to establish how it was subsequently allocated and used by individual authorities.
She contrasted this with the greater visibility she believed existed for some English funding streams.
Claire also described the increasingly complicated landscape of shared services between Welsh local authorities.
Some councils share revenues services. Others share senior management arrangements. Different combinations of authorities cooperate in different ways.
Her expectation was that these arrangements could eventually lead to more formal local government mergers.
She drew a parallel with registered social landlords, where consolidation and the creation of larger organisations were also becoming more prominent.
Malcolm agreed that some of these developments appeared likely, while offering his usual observation that sharing is caring.
Behind the humour was a serious point.
Public service reorganisation is not confined to England, and the pressures driving consolidation extend beyond local authority boundaries.
But Claire’s comments raised an important question.
Does creating larger organisations improve accountability and transparency, or does it simply move decisions further away from the communities affected by them?
The danger of permanent political uncertainty
Bob Wagstaff brought the discussion towards its conclusion with a characteristically dry observation.
When he heard that the Budget was offering breathing space, he wondered whether that meant three months without debt repayments, followed by bankruptcy.
It was a joke, but one that captured much of the discussion.
Bob shared the view that the Government might be preparing the ground for an early election.
However, his greater concern was the impact of continued political instability on public services.
He questioned whether the country’s increasingly factional political environment would allow any government to make sustained progress.
He was particularly concerned that renewed arguments about Britain’s relationship with Europe could absorb political attention and deepen divisions.
Local government, he observed, is already vulnerable to shifts in political control and competing priorities.
The prospect of another decade of political conflict offered little reassurance to those responsible for maintaining essential public services.
His fear was that the public sector could face a very rough ten years.
It was not the most cheerful conclusion to a Monday morning discussion, but neither was it entirely inconsistent with the concerns expressed by other contributors.
So where does this leave local government?
The discussion exposed several competing perspectives.
Paul Howarth saw a Government constrained by economic and political realities, trying to create time for decisions that could no longer be avoided.
Laura Bessell questioned the practical delivery of national policy and warned against reforms that overlooked local differences, administrative capacity and the needs of residents.
Sean O’Sullivan challenged the financing of infrastructure and energy, arguing that the underlying systems required reform rather than further temporary adjustments.
Tom Clark provided a more positive assessment of devolution, demonstrating how wider governance arrangements can encourage better integration of services, while acknowledging that they do not solve funding problems.
Claire Pearce-Crawford insisted that the debate must remain grounded in the lived experiences of households facing serious deprivation, not merely the mechanics of delivering government policy.
Gareth Morgan reminded the group that small amounts of support can still matter, while challenging the assumption that higher wages automatically translate into substantially higher disposable incomes.
Ian Savigar highlighted the practical momentum behind devolution and the uncertainties surrounding its implementation.
And Bob Wagstaff questioned whether the political system itself was capable of providing the sustained stability that public services require.
These were not identical views, and they should not be presented as such.
But they shared a concern that the machinery of government is increasingly occupied with managing the consequences of problems rather than resolving their causes.
My conclusion: are we buying breathing space or simply borrowing trouble?
I began the discussion wondering whether we were looking at another year of deterioration in household finances and public services.
I finished it wondering whether the Budget was a symptom of a much wider political and institutional problem.
We are remarkably good at developing temporary responses.
When energy prices rise, we introduce a payment. When councils struggle financially, we discuss restructuring. When household incomes fail to keep pace with costs, we adjust wages or benefits. When public services become fragmented, we create another layer of strategic governance.
Some of these interventions are necessary. Some are genuinely helpful.
But they are not necessarily solutions.
And we should be careful not to confuse announcing expenditure with delivering better outcomes.
I also think we need to be cautious about dismissing measures simply because they are insufficient. Gareth was right to challenge that. An extra £100 can matter enormously to someone struggling to make ends meet.
But Claire was equally right that we cannot seriously believe such a payment will reverse the circumstances that have left families unable to afford basic essentials.
Both arguments can be true.
My greater concern is that we are allowing the difficult decisions to accumulate.
Local government reorganisation is moving forward, but the financial and operational challenges remain. Devolution promises greater control, but the mechanisms for redistribution and accountability are still uncertain. Welfare reform is anticipated, but many of the difficult choices are yet to be made.
Meanwhile, councils are expected to continue delivering services, administering new schemes and supporting increasingly vulnerable households.
And they must do all this while managing their own financial pressures.
We can call that breathing space.
But breathing space is useful only if we know what we intend to do with it.
Otherwise, we are simply postponing the point at which the difficult decisions become unavoidable.
The real test of this Budget is not whether it creates a few months of political calm. It is whether the Government uses that time to address the structural problems that have made so many households and public services financially vulnerable in the first place.
If it does, the breathing space may prove worthwhile.
If it doesn’t, we may discover that all we have done is buy ourselves another instalment of the same problems.
And I suspect local government has already bought quite enough of those.
The Recording can be found here
Documents to download
Please note that the handout contains additional slides covering other items of interest in the news and job adverts, which are provided in partnership with Business Smart Solutions (https://www.businesssmartsolutions.co.uk/).