Demos Responds to the 2016 Budget

The Chancellor’s 2016 Budget addressed many of Demos’ core policy areas, and in some instances, drew on policy recommendations from our research over the past year:

Infrastructure Investment

The Government’s announcements of infrastructure investment, particularly in the North of England, are welcome: our research on socio-economic inequality consistently reveals significant geographic disparities, which can only be addressed in the long-term through strategic measures to boost economic growth. However, it is clear that the focus on achieving this through England’s major cities – as indicated in the boon for Greater Manchester on criminal justice and London on business rates – will reap asymmetrical benefits within regions; this is concerning, given our Talk of the Town report found 3/5 towns are already performing significantly behind their urban neighbours. While greater devolution to the nations and throughout England is well overdue, it must also be supported by measures to ensure inequalities do not become entrenched along the way.

House Building

There is no doubt that house-building must be a critical priority for the Government; but the announcements we’ve seen today cannot be expected to make any serious dent in the current and future deficit of supply. We are encouraged by the £60 million in funding for Community Land Trusts, to support community-led housing developments in rural and coastal towns; our research last year indicated that handing greater control back to communities would be critical to overcoming the ‘NIMBYism’ that’s been stymieing council-led action against the housing crisis over recent years.

That said, the stronger directive on greenfield land will not please everyone, and is likely to somewhat undermine perceptions of this move towards a more locally driven approach. The Government can continue to make it easier for local authorities to build, as per the planning reforms announced today, but without long-term efforts to address this discord between our acute social and economic needs for housing stock, and local concerns about where it is built, we will never truly see a political appetite for decisive action.


It’s pleasing to see the Chancellor making the link between investing in education and the expansion of both life chances and economic growth. While his proposals for academies will divide the nation, there is a strong case for bringing further flexibility into the education system through extending the school day; as Demos’ research on the importance of children’s character and social skills to their long-term prospects has shown, the lack of time within the school day is one of the biggest barriers otherwise supportive teachers currently face.

So too is it encouraging to see further funding for sports through the expansion of the PE and sport premium for primary schools: our research has revealed widespread differences in children’s access to extra-curricular activities which can have an immediate impact on their health and well-being as well as positive long-term effects. And the additional funding for a nation-wide mentoring programme should also be welcomed. The big question here is whether it will be enough – £285m a year may sound a lot, but not compared with the schools budget of over £40bn – which schools will be within the 25% eligible for funding, and how schools will be incentivised to spend it on character-building enrichment activity.

It’s also crucial that what schools are doing as a result of this funding is of good enough quality to make a difference. Demos is currently working to drive up the evidence base on what works in building character, but this funding should come with requirements to monitor participation to track impact, particularly in terms of school sport.

The news of the shake-up of financial guidance providers also has implications for monitoring of financial education in schools – given the work of the Money Advice Service in this area and their broader Financial Capability Strategy. The Government should ensure that this role of improving quality in this relatively new area of educational provision is maintained to ensure that young people get into the saving habits he is so keen to encourage.

Regarding the announcements around the funding formula reforms, it is clear that inequalities of opportunity are challenging for any Government to address, as ‘rebalancing’ can so often penalise those who are currently performing most strongly. Overall, the recalculation of the pupil funding formula is a welcome move to restore fairness to the education system, however it is important to note the role that the additional funding in places like London has played in their success story.

ISA and Pensions

While the Chancellor’s ‘Lifetime ISA’ plan appears to be aimed at young people, it is important to note the benefits it could have for the self-employed; we called for the introduction of a similar scheme in our Going it Alone project on the future of self-employment, to remedy the troubling pensions shortfall for a growing segment of our working population.

Technology and Innovation

The £10 million investment in a new hub for data science and a centre for excellence in economic measurement, to maximise the public value of ‘big data’ is enormously welcome. Through our Centre for the Analysis of Social Media, we have long championed the social science value of new and emerging data sets, and have consistently called for public policy to be reshaped to acknowledge the importance of digital platforms to our daily lives. Other promising announcements are around the £20 million Institute for Coding competition, the £15 million pegged for a National Institute for Smart Data Innovation in Newcastle, and the provisions around improving openness and access of data through an authoritative address register.


With its decision to back down from a wholesale mooted “sin tax” on alcohol, it will be interesting to see what measures the Government puts in place to tackle harmful drinking over the course of the year. Demos research shows that price can indeed be an important factor in declining alcohol consumption in young people, but it’s just one piece of the puzzle. Our growing evidence base indicates that harmful consumption is often driven by social factors, such as an individual’s family, socio-economic circumstances and the community and environment around them, and these will all need to feature in effective policy-making responses.


With the need to address the growing threat of extremism, particularly with regards to ISIS, it is laudable that the Home Office budget has been spared from cuts; however, it is important that the department also has the support it needs to address the looming threats of tomorrow, including the likely prospect of larger numbers of returned fighters from conflict zones over the coming years. The announced funding to the Miriam Hyman Memorial Trust to deliver a project for teachers on the issues of extremism and terrorism is positive, but a small commitment in light of schools’ responsibilities under the 2015 Counter-Terrorism and Security Act; it is essential that schools are able to access to full scope of resources they need to build up pupil resistance to extremism.

While it didn’t make it into the Chancellor’s speech, the Budget does set out increased support for Armed Forces charities, which is always welcome – particularly when it comes to improving signposting for services, and critical peer support, as well as flexible care. But as we argued in Under-Served, greater efforts to coordinate the actions and services of Armed Forces charities are the key to improving support for veterans, not just more resources. The Government should consider the recommendations of the 2014 Ashcroft Veterans Transition Review, and subsequent research, closely, and seek to build on the excellent work of the Confederation of Service Charities and organisations like the Forces in Mind Trust. With greater coordination between Armed Forces charities, and clearer information for the veterans themselves, these new funds would go much further.

The Budget also includes a provision around war pensions and social care; given our research has highlighted some of the concerning issues surrounding care provision for this often ‘invisible’ group, these reforms are a welcome start, bringing the means testing exemption for War Pensions – awarded for injuries and illnesses sustained before April 2005 – into line with that for the Armed Forces Compensation Scheme (AFCS) – for injuries and illnesses sustained after April 2005. However, beyond the removal of these means testing, the Government should also consider what specific additional assistance should be provided for working age (16-65) veterans, whose needs often far outstretch the social care support currently available.