The 2016 Budget delivered a few issues which governance professionals should be aware of. For those working in the education sector, the government's plan for all schools to become academies by 2022, although not surprising, poses challenges.
Tax changes included the headline rate of corporation tax falling from the current 20% to 17% by 2020. This is good news for small business, who also benefitted from the plan for small business tax relief to be raised from £6,000 to £15,000. Anti-avoidance and evasion measures have also been projected to raise £12 billion by 2020. Although there is concern that this action must be properly targeted so that it does not increase the regulatory burden on companies.
Other welcome news is that Libor fines will be spent on children's hospital services, specifically on those in Sheffield, Birmingham, Southampton and Manchester.
Charities Act receives Royal Assent
The new Charities (Protection and Social Investment) Act 2016 received Royal Assent and has become law. The Act gives the Charity Commission more powers, such as issuing official warnings, and increases the range of offences which result in automatic disqualification for a trustee.
The Act also makes provisions for the setup of a statutory fundraising regulator by the government, or alternatively pass this responsibility to the Charity Commission, if self-regulation by charities does not work.
'Black hole' in NHS finances
The Commons Public Accounts Committee has criticised the government's handling of the NHS, arguing there is a lack of 'a convincing plan' for avoiding a 'black hole' in the sector's finances. The parliamentary spending watchdog found that trusts had a net deficit of £843 million in 2014−15, which has dropped significantly from the £91 million deficit in 2013−14. These figures are a dramatic decline from the £592 million surplus in 2012−13.
MPs are suggesting there is worse to come, with three quarters of health service hospitals already in deficit half way through the financial year and a predicted total overspend for 2015−16 of approximately £2.5 billion.
£20 billion exchange merger
The London Stock Exchange (LSE) and Deutsche Börse have agreed a £20 billion merger and expect to cut costs by £354 million per year in the process.
In the proposal, described as a 'merger of equals', Deutsche Börse shareholders will own 54.4% of the new company and LSE the remainder. The announcement comes as Intercontinental Exchange, owner of the New York Stock Exchange, revealed it was considering making a competing offer for LSE.
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