NCTJ PUBLIC AFFAIRS CORE MAIN EXAMS ALL
QUESTIONS AND ANSWERS SURE A+
✔✔Central Government Grants - ✔✔Formula:
-Revenue Support Grants
-Principle Formula Police Grant
-Complex calculation done by the government determines how much each authority
receives
Non-formula:
-Specific grants:
-Ring-fenced - restrictions on where the money can be spent (e.g. dedicated schools
grant, public health grant)
-Unfenced - money can be spent anywhere (e.g. early intervention grant)
-Local Services Support Grant
✔✔Fees, charges and fines - ✔✔Money obtained through services run by local
authorities:
-Leisure services
-Trade refuse collection
-Car parking tickets, fines
-Income from private contractors
-European Social Fund Grants
,✔✔Reserves - ✔✔Savings of councils
Investments (interests)
✔✔Capital - sources - ✔✔There is a distinct budget set by the local authority (except
that interest payments - debt charge - must come from revenue budget)
-Borrowing (e.g. from central government)
-Capital receipts (money raised by selling assets like land, usable and reserve)
-Local lotteries
-EU grants and loans (under threat)
-Capital grants (from central government or bodies giving out lottery cash)
-Private sector investment (when private firms are contracted out to run public services
e.g. Private Finance Initiative)
✔✔The Budget - ✔✔A statement made to the House of Commons by the Chancellor
States nation's finances and the government's proposals for changes to taxation
Includes forecasts set by the Office for Budget Responsibility
✔✔Chancellor of the Exchequer - ✔✔-Oversees government public spending and
investment commitments (where taxes come from, how policy is going)
-Controls inflation (currently 1.8%) and employment (this government has poor record
with employment)
-Manages national debt
-Promotes economic growth and British exports (cheerleader role, talks up the country,
attends key meetings where British industrial and commercial success could be
furthered)
Rishi Sunak
-Organised huge rescue package in response to pandemic
✔✔When is the Budget delivered? - ✔✔-In Autumn (used to be in March or April -
recent policy change)
-Annual (Because income tax and corporate tax have to be renewed annually - every
financial year - by legislation, so does the Budget - it is enacted by the Finance Bill
which has to go through Parliament just as any other legislation does)
-Major political event in the calendar
✔✔What is the Budget? - ✔✔-The Chancellor reviews the financial performance of the
Government
-Spending is announced (tax changes, increases/ decreases in specific departments)
-Forecasts about the likely economic movements over the coming year or so (inflation
etc.)
-New tax breaks and taxation is announced (incentives for businesses, help for low
income households)
, ✔✔Who sets the Budget? - ✔✔Chancellor of the Exchequer: Rishi Sunak (oversees)
Department for Business, Energy and Industrial Strategy: Secretary = Alok Sharma
Chancellor implements Fiscal and Monetary policy to set/ alter the Budget
✔✔National Debt - ✔✔The total amount of money that the government owes
Money borrowed from markets, banks etc.
Pays for public services
£1.84 trillion
Sharp rise in 2008/09 due to financial crash - bailing out banks etc. - Former Chancellor
Osborne fought for austerity - cut spending to reduce debt - even after 10 years of
Conservative rule debt has stayed consistent
✔✔Austerity - ✔✔Cuts to public spending to save money result in difficult economic
conditions
Attempt to reduce government expenditure and national debt
✔✔Recession - ✔✔When the economy shrinks for two successive quarters
Often leads to less borrowing, less consumer spending, redundancies etc.
2008/ 09 financial crash
Covid-19 will likely result in recession
✔✔Public Sector Net Borrowing - ✔✔Money the government borrows to make up the
national deficit - adds to their debt
✔✔National deficit - ✔✔The difference in a given year between what the government
raises in taxes and fees and what the government spends
£0.3 billion in Feb 2020
✔✔Office for Budget Responsibility - ✔✔OBR
Role:
-Independent analysis of UK's public finances
-Assesses government's progress on it's own economic targets
-Scrutinises the Treasury's costings
-Forecasts on the economy
Created by George Osborne
Takes medium and long term forecasts out of politicians' hands - apolitical -
depoliticises forecasts - prevents idea that the government is massaging financial data
✔✔The Treasury - ✔✔Also known as the Exchequer
QUESTIONS AND ANSWERS SURE A+
✔✔Central Government Grants - ✔✔Formula:
-Revenue Support Grants
-Principle Formula Police Grant
-Complex calculation done by the government determines how much each authority
receives
Non-formula:
-Specific grants:
-Ring-fenced - restrictions on where the money can be spent (e.g. dedicated schools
grant, public health grant)
-Unfenced - money can be spent anywhere (e.g. early intervention grant)
-Local Services Support Grant
✔✔Fees, charges and fines - ✔✔Money obtained through services run by local
authorities:
-Leisure services
-Trade refuse collection
-Car parking tickets, fines
-Income from private contractors
-European Social Fund Grants
,✔✔Reserves - ✔✔Savings of councils
Investments (interests)
✔✔Capital - sources - ✔✔There is a distinct budget set by the local authority (except
that interest payments - debt charge - must come from revenue budget)
-Borrowing (e.g. from central government)
-Capital receipts (money raised by selling assets like land, usable and reserve)
-Local lotteries
-EU grants and loans (under threat)
-Capital grants (from central government or bodies giving out lottery cash)
-Private sector investment (when private firms are contracted out to run public services
e.g. Private Finance Initiative)
✔✔The Budget - ✔✔A statement made to the House of Commons by the Chancellor
States nation's finances and the government's proposals for changes to taxation
Includes forecasts set by the Office for Budget Responsibility
✔✔Chancellor of the Exchequer - ✔✔-Oversees government public spending and
investment commitments (where taxes come from, how policy is going)
-Controls inflation (currently 1.8%) and employment (this government has poor record
with employment)
-Manages national debt
-Promotes economic growth and British exports (cheerleader role, talks up the country,
attends key meetings where British industrial and commercial success could be
furthered)
Rishi Sunak
-Organised huge rescue package in response to pandemic
✔✔When is the Budget delivered? - ✔✔-In Autumn (used to be in March or April -
recent policy change)
-Annual (Because income tax and corporate tax have to be renewed annually - every
financial year - by legislation, so does the Budget - it is enacted by the Finance Bill
which has to go through Parliament just as any other legislation does)
-Major political event in the calendar
✔✔What is the Budget? - ✔✔-The Chancellor reviews the financial performance of the
Government
-Spending is announced (tax changes, increases/ decreases in specific departments)
-Forecasts about the likely economic movements over the coming year or so (inflation
etc.)
-New tax breaks and taxation is announced (incentives for businesses, help for low
income households)
, ✔✔Who sets the Budget? - ✔✔Chancellor of the Exchequer: Rishi Sunak (oversees)
Department for Business, Energy and Industrial Strategy: Secretary = Alok Sharma
Chancellor implements Fiscal and Monetary policy to set/ alter the Budget
✔✔National Debt - ✔✔The total amount of money that the government owes
Money borrowed from markets, banks etc.
Pays for public services
£1.84 trillion
Sharp rise in 2008/09 due to financial crash - bailing out banks etc. - Former Chancellor
Osborne fought for austerity - cut spending to reduce debt - even after 10 years of
Conservative rule debt has stayed consistent
✔✔Austerity - ✔✔Cuts to public spending to save money result in difficult economic
conditions
Attempt to reduce government expenditure and national debt
✔✔Recession - ✔✔When the economy shrinks for two successive quarters
Often leads to less borrowing, less consumer spending, redundancies etc.
2008/ 09 financial crash
Covid-19 will likely result in recession
✔✔Public Sector Net Borrowing - ✔✔Money the government borrows to make up the
national deficit - adds to their debt
✔✔National deficit - ✔✔The difference in a given year between what the government
raises in taxes and fees and what the government spends
£0.3 billion in Feb 2020
✔✔Office for Budget Responsibility - ✔✔OBR
Role:
-Independent analysis of UK's public finances
-Assesses government's progress on it's own economic targets
-Scrutinises the Treasury's costings
-Forecasts on the economy
Created by George Osborne
Takes medium and long term forecasts out of politicians' hands - apolitical -
depoliticises forecasts - prevents idea that the government is massaging financial data
✔✔The Treasury - ✔✔Also known as the Exchequer
