UK Finance News

Cuts are hitting the public sector hard at the moment, so the concept of temporary staff and agency workers coming in to work things out on behalf of the government is often seen as a bad thing. On the contrary, getting specialised experts to oversee the entire process of change and redevelopment is probably the best bet for Whitehall-managed services.

The public sector is continually being asked to do more for less money in order to deliver the true value of government investment. Interim managers from interimpartners.com understand that the much-valued NHS and wider public sector need experience and knowledge in managing change while delivering savings demanded by the coalition. Front-line services must still be maintained, so the public sector often needs people to step in while an existing manager is off work, or simply apply expert abilities when managing a specific project or targeting a particular outcome.

A recent survey from interimpartners.com discovered that 67 per cent of the UK’s NHS interim managers said GP-led commissioning will not improve service quality in the NHS, believing that the lack of management leadership would effectively fail to deliver cost savings.

The employment of interim managers with experience outside of the public sector is an advantage. After all, the public sector needs new ways of doing things to break bad habits of the past, while private and not-for-profit expertise can bring new and interesting insights into how to get things done without wasting valued public funds.

What’s more, interim managers are more than capable of stepping into any position, from chief executive of a large organisation to the lower levels of separate departments. Interim chief executives can be dropped into action and turn around a Trust that is failing, while others could manage a merger or improve efficiency on all levels.

Private sector knowledge from interim managers can also aid in the creation of joint ventures between public services and businesses, helping things run for the benefit of both parties and taking the burden away from the taxpayer.

While more announcements of further cuts are likely to cause frustration among people in the UK, interim managers are here to ensure that it is all done fairly and with an emphasis on real savings, for the good of the country at large.

The Chancellor George Osborne announced the 2011 budget yesterday and here is a round up of the key points from his speech that are likely to have the biggest impact on our personal finances. This information is kindly supplied by money.co.uk.

Tax
Income tax
* From April 2012 personal allowance will increase by £630 to £8105.
* This increase won’t be restricted to basic rate tax payers so no one else will be pulled into the higher rate tax band.
* The 50% tax rate will be reviewed and potentially removed if it has not generated sufficient revenue.

National insurance

* Income tax & National Insurance may be merged to a single tax if it is viable to do so.
* However, this will not result in pensioners having to pay National Insurance.
* The 1% National Insurance increase scheduled for April 2011 will go ahead as planned.

Inheritance tax
* The Inheritance Tax Rate will be reduced by 10% for anyone who leaves 10% or more of their estate to charity.

Other tax
* From April 2012 the thresholds for Income Tax, National Insurance, ISAs and Inheritance Tax will increase by the CPI measure of inflation instead of by RPI.
* Taxes on owners of high value property will be reformed.
* Measures to clamp down on tax avoidance will be introduced.
* Income tax relief on the Enterprise Investment Scheme will increase from 20% to 30% in April, 2011.

Housing
First time buyers
* £250 million commitment has been made to help first time buyers.
* A new shared equity scheme – First Buy – will help 10,000 families to purchase a new build home.

Mortgage Support
* The Support for Mortgage Interest scheme will be extended for another year.

Council tax
* Every council across the UK has agreed to freeze council tax for the coming year.

Water bills
* Public money will be used to help cut water bills for customers in the South West of England.

Alcohol & Tobacco
Alcohol
* A reduced rate of tax will apply to low strength beers from 1st October, 2011.
* A higher rate of tax will be applied to high strength beers from this date.
* There will be no change to any other alcohol duty rates.

Tobacco
* Tobacco duty rates to increase by 2% above inflation.
* Tax on hand-rolled tobacco will increase by an additional 10%.

Transport
Fuel
* Fuel duty will be cut by 1p a litre from 6pm today (23rd March, 2011).
* The planned 1p increase in fuel duty scheduled for April will be pushed back a year.
* The subsequent inflation-linked rise scheduled for April 2012 will be pushed back until the following summer.
* A Fair Fuel Stabiliser will be introduced from tomorrow – fuel duty will go down when fuel prices increase, & go up when fuel prices fall.
* The fuel duty escalator will be scrapped for the rest of this Parliament.
* A rural fuel duty scheme will be piloted.

Approved mileage allowance
* Approved mileage allowance payments will increase to 45p a mile for the first 10,000 miles & 25p a mile thereafter.
* It will also be paid for volunteers travelling as passengers.

Road tax
* Vehicle Exercise Duty will increase by inflation only.

Trains
* £200 million will be invested in regional railways.

Flights
* The planned increase in air passenger duty will be delayed until next year.

Employment & Education
Employment
* A new start up scheme to support entrepreneurs – Start Up Britain – will be launched.
* 21 new enterprise zones will be introduced.
* Entrepreneur’s Relief will be doubled to £10 million on 6th April.

Education
* 24 new university technical colleges will be set up.
* 100,000 places in new work experience schemes will be introduced.
* 50,000 apprenticeship places will be created over the next four years.

Pensions
State pension
* A new, single tier, flat rate pension based on contributions will be introduced subject to a consultation.
* This will be worth approximately £140 a week but it will take years to implement.
* Current pensioners won’t be affected by the change.
* Plans to introduce automatic increases to the State Pension Age have been brought forward subject to review.

Public sector pensions
* Public sector workers will have to increase their pension contributions by approx. 3%.
* The government will consult on scrapping final salary pensions for public sector workers & replacing them with career average pension benefits.

For further information and to discuss your thoughts on the 2011 Budget speech visit the money.co.uk budget special.

Life is what happens while we are busy making other plans, as John Lennon once sang, and looking at the well presented 2010 The Financial Year in Review, there was so much going on in the form of natural disasters, the general election, struggling EU economies and massive banking and health reforms in America – it is worth taking time out to refresh the memory and be amazed at how we ever managed to pull through!

2010 The Financial Year in Review is presented by money.co.uk, who have gathered together the key financial and economical news stories from the year into monthly headlines that can be clicked on to display each news story in full.

It is a stunning presentation so visit the money.co.uk website to view.

Living now and paying for it later may not have been the slogan of the boom times that grew out of the 1970s and 80s and as we all became more prosperous in latter years, spending money that we never had in the first place became something of an art form in the more recent designer age and beyond.

Getting into debt has become an integral part of growing up it appears and we must all have witnessed at some time or other the heartbreak that this awful addiction has inflicted upon family members and people that we know.

The surprise is that it continues unabated, our ‘must have it now society’ is fuelled by easy borrowing and credit cards despite the banks making it more difficult to do so.

There is also no longer any stigma attached to the process of being made bankrupt and the consequences thereafter, it is almost seen as part and parcel of the deal, made all the easier in recent times by companies specialising in this area who can rid personal debts at the click of a finger while lining their own pockets.

The credit crunch has only served to highlight the problem that has been growing year on year for decades and it is quite scary seeing the details from this infographic and wondering what the future holds for a nation that is unable to pay its way out of debt.

Infographic by Money Debt & Credit

• We would like to thank the charity Credit Action for their help with core statistics

Official figures have revealed that the number of people in England and Wales being declared insolvent rose by 0.7% on the 2009 figure and the highest since records began in 1960.

Although there was a drop in the figures during the final three months of 2010, officials have suggested that this may have more to do with the adverse weather conditions suffered, preventing from people attending court,a more sympathetic attitude from lenders or people putting off insolvency until the new year.

The overall figure for personal insovencies during 2010 wa s recorded at 135,089.

Out of that figure 59,194 took the traditional bankruptcy route, while 50,716 chose to enter into an Individual Voluntary Arrangement (IVA) which allow a deal to be struck between debtors and creditors.

There were also 25,179 Debt Relief Orders – a relatively new style of insolvency for relatively low debts.

• Bankruptcy: The traditional way of escaping overwhelming debt. Ends after one year, but you are likely to lose all your assets including your house to pay something to the creditor
• Individual voluntary arrangement (IVA): A deal between you and your creditors, overseen by an insolvency practitioner. Less stigma, less chance of losing your home, but involves paying some of your debts in one go or over a number of years
• Debt Relief Orders: Introduced in April 2009, these allow consumers with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy

While personal insolvencies reached a new high there was surprising news that the number of businesses in England going bust fell by 23% in 2010.