2025 Autumn Budget will provide few positives for local authorities

The Chancellor, Rachel Reeves, will present the Autumn Budget on 26th November. This is an unenviable task given weak growth, geopolitical uncertainties and mounting spending pressures.

Recent developments have offered an additional boost. Updated fiscal assessments suggest the Budget “black hole” in public finances is smaller than previously feared, prompting Rachel Reeves to signal that she will not need to raise income tax after all.

For local authorities the autumn budget is unlikely to bring major positive surprises. In mid-October the government confirmed that it would postpone the publication of its eagerly-awaited SEND reform white paper until early-2026, however we remain hopeful that meaningful policy interventions will emerge to address the current shortcomings of the system. Local authorities are not navigating this landscape alone – Camdor Global Advisors continues to support councils with identifying sustainable strategies despite constrained budgets, help to strengthen resilience, and position themselves to take advantage of opportunities as they arise.
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On 21 July 2025, the UK Government made its first major announcement with the establishment of a new pensions commission that could reshape the country’s approach to retirement saving.

Amid the usual political noise from Westminster, this stands out for its potential to deliver lasting structural change and to redefine the state’s role in securing adequate incomes for future pensioners.

It will also feed into a parallel review of the State Pension age, which will look at international models where pension age automatically adjusts in line with life expectancy. Bob Swarup and Frank Eich analysed similar proposals in 2009, in the wake of the first pensions commission, and their work may be worth revisiting.

Sir Jon concludes that this framework has failed to deliver and recommends a fundamental “reset” of the sector. Central to his proposals is the replacement of Ofwat with a new, more integrated regulator and supervisor. This new body would combine oversight of investment, daytoday operations, and longterm resilience.

These policy announcements come at a time when public finances are under sustained pressure. In this context, the Government is focused on two priorities. The first is to contain growth in state pension expenditure, since large increases in annual spending would add strain to the national budget. The second is to fix problems in struggling private utilities by improving regulation and management, thereby avoiding the high costs of taking them into public ownership.

However, the return of parts of the rail network to public ownership illustrates a gradual shift in the balance between public and private provision.

Whether the pensions commission and water sector reforms deliver meaningful change or remain at the level of consultation will hinge on political will and fiscal space.

For now, they are clear signals of where government priorities may be heading and will be closely watched by markets and policymakers alike.

On 21 July 2025, the UK Government made its first major announcement with the establishment of a new pensions commission that could reshape the country’s approach to retirement saving.

Amid the usual political noise from Westminster, this stands out for its potential to deliver lasting structural change and to redefine the state’s role in securing adequate incomes for future pensioners.

It will also feed into a parallel review of the State Pension age, which will look at international models where pension age automatically adjusts in line with life expectancy. Bob Swarup and Frank Eich analysed similar proposals in 2009, in the wake of the first pensions commission, and their work may be worth revisiting.

On 29 April the Pension Schemes Bill received Royal Assent and became law. It brings to a close a policy initiative which started in late 2024 with Chancellor Reeves’ first Mansion House speech.

According to the Government, this is a landmark bill, which will help more than 20 million people better save for their retirement and will boost UK growth. It aims to achieve that by reducing costs and boosting returns. It will also make it easier to consolidate smaller individual pension pots and allow the creation of multi-employer defined-contribution ‘megafunds’. Importantly, after much back and forth with the House of Lords, the Government agreed to tone down its original plans. These would have given it the power to mandate UK pension schemes to invest in private markets, half of this investment being in the UK.

It is good to see these proposed powers watered down. While we can see why the Government might want to steer pension investment to what it might consider to be “good causes”, it really should be for the schemes themselves to decide what is best for their members.

The Bill also put the finishing touches to the consolidation of the Local Government Pension Scheme into a few pools, which the government hopes will lead to economies of scale and generally better outcomes. This consolidation is nearly complete now, with pools already doing most of what they are expected to do. But as local authorities move from trusted and established arrangements involving appointed fund managers and independent advisors to new arrangements centred around powerful pools, they need to remain extra vigilant. Governance issues may emerge as the relationships between stakeholders change.