Lincolnshire leader reacts to Chancellor's spring statement

Following the removal of the £9 million rural services delivery grant in November 2024, Conservative councillor Martin Hill has warned of further reductions in government funding, worsening the county’s financial position.

Rachel Reeves delivered the Spring Statement on Wednesday (March 26), setting out further welfare cuts. Analysis by the Office for Budget Responsibility (OBR) shows that £6.4 billion will be cut from the health and disability benefits bill by 2029-30. This will be partially offset by an uplift to the standard rate of Universal Credit, reducing the total cuts to £4.8 billion.

Day-to-day government spending is set to fall by £6.1 billion per year by 2030, growing by 1.2 per cent in real terms after 2026 instead of the previously planned 1.3%, and about 10,000 civil service jobs are expected to be cut, affecting staff in HR, policy advice, communications, and office management.

“As predicted by many, the budget announced by Rachel Reeves last year has started to unravel, and she has had to produce an emergency budget to close her financial gap in the national finances,” said Coun Hill.

“Unfortunately, this has meant that the unfairness from last year has not been addressed at all—particularly the government’s failure to provide adequate compensation for the national insurance costs imposed on local government and the removal of our £9 million rural grant, which has been redirected to urban areas.

“There will now be further reductions in grants to local government, made worse by the Ministry of Housing, Communities and Local Government not being a protected department.

“We also remain concerned about the threat of more money being diverted from rural areas to urban areas, which would compound an already difficult financial situation for Lincolnshire.”

Following an executive meeting in January, Coun Hill noted that the government had replaced the rural services delivery grant with a recovery grant, with councils such as Birmingham receiving £39.3 million.

“If this is the direction of travel, where money is being taken away from rural areas like Lincolnshire and given to cities like Birmingham, that is going to make life very difficult,” he said.