How has Defence Procurement been affected by Autumn Budget 2017?
Yesterday, Philip Hammond presented the first Autumn Budget in 20 years. The Autumn Statement was scrapped by the Chancellor of the Exchequer in 2016 at the recommendation of the Institute for Fiscal Studies (IFS).
What was revealed on the day? Perhaps due to the significant amount allocated to defence in his earlier Spring Budget, there was little mention of the sector during the Chancellor’s announcement yesterday. However, the Government did focus heavily on improving the UK’s technology sector.
For more details about the Autumn Budget, see below.
What is the Autumn Budget?
If you missed our article “What Should Defence Expect From The Autumn Budget?”, here is a brief overview of what happened yesterday.
The Chancellor presented his Autumn Budget to a packed House of Commons just after midday. This Budget sets out the Government’s forthcoming spending plans for the UK economy. Other parties and members of parliament then proceeded to debate the new Budget and the merits of its proposals.
Investment in Technology
Technology has been much in the news of late, with the National Cyber Security Centre (NCSC) even accusing Russian hackers of targeting the UK energy network, telecoms and media in the past year.
In his Budget yesterday, the Chancellor revealed the Government’s plans to strengthen technology and invest in 5G and full fibre broadband.
A boost was also given to artificial intelligence (AI) – it was announced that the world’s first national advisory body for artificial intelligence would be launched in the UK.
The Centre for Data Ethics and Innovation will set standards for the use of AI and data. This will help the UK to lead the world in developing practical uses for the technology.
How will the Budget affect the Emergency Services?
Just hours before the Budget was formally announced it was revealed that the Chancellor would declare that the police and fire services in Scotland would no longer be liable for VAT.
Mr Hammond confirmed to the House that Scottish Police and Fire will get a VAT refund from April 2018, bringing the services into line with their UK counterparts.
More money will also be spent on the NHS – promising news for those seeking to win emergency services tenders. Some £5bn will be invested in upgrading NHS buildings and improving care and an extra £2.8bn will go towards improving A&E performance.
Regional Government spend
During his Autumn Budget speech, the Chancellor also announced an increase in spending power for the Scottish and Welsh Governments and the Northern Ireland Executive.
- £2bn more for the Scottish Government
- £1.2bn more for the Welsh Government
- £660m more for the Northern Ireland Executive
Defence is not one of the powers devolved to the regional parliaments; it remains a reserved responsibility of the UK Government.
This means that this money will not be spent on defence; however, it may be allocated in other areas that are covered by DCI Contracts like emergency services.
If you are interested in winning emergency services tenders, then we can show you how to optimise your DCI Contracts profile during a free demo.
How much money is being spent on Defence?
In his Spring Budget, the Chancellor announced that £48bn was to be spent on defence in 2017/18. All the money that is spent by the MOD, on everything from utilities to uniforms, is publicly funded – just one of the reasons why defence procurement is so important to the private sector.
When is the next Statement?
The next Spring Statement will be announced in 2018. This statement will respond to the updated OBR forecast for the economy and the public finances. It will not be a major fiscal event in its own right.
In 2016, the Chancellor said that the Government would consider longer-term fiscal challenges and start consultations on how they could be addressed. We will need to wait until the spring to find out what measures the Government intends to take.
Government and Defence news
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