What does Rachel Reeves' budget mean for Sheffield and South Yorkshire? From Supertram to less 'red tape'

The chancellor announced £40billion of tax rises on businesses and the wealthy - including employers national insurance, said to be worth £25bn by the end of this parliament.

Alongside it were swathes of investments in education, transport, the NHS and defence. Minimum wage will go up for millions of workers.

However, it can be hard to figure out amongst the hurrahs, jeers and exaggerated, booming laughter of the House of Commons, just what is useful to you and what isn’t.

With South Yorkshire Mayor Oliver Coppard calling the budget “good for South Yorkshire”, this is exactly what you can apply directly to our region and what it means for you.

“Renewal” of Sheffield Supertram

The one and only explicit reference to Sheffield or South Yorkshire was the announcement of a £1.3bn investment in city region transport including projects like the “renewal of Sheffield Supertram”.

It means the South Yorkshire Mayoral Combined Authority (SYMCA) will receive a part of that package for upgrading the existing network.

Renewal stops short of extending the network. Mayor Coppard said it would go towards new tracks, upgrading overhead power lines and potentially new trams in the future.

What the money won’t do is pay for extensions to the Northern General or Royal Hallamshire hospitals, nor to Stocksbridge and Barrow Hill which is currently undergoing a feasability assessment.

Supertram came under public control earlier in 2024 after decades being operated by Stagecoach.

In the months since, there have been multiple occasions where work on upgrading and replacing old track have been undertaken. The funding announced by the chancellor this autumn should continue that work.

Is Sheffield getting rail upgrades?

The literal answer is no. Rachel Reeves announced a flurry of transport improvements in the North of England, including uprades across the Pennines.

However, those upgrades seemed to touch every town and city around the area, except for Sheffield.

There were three different upgrades benefitting services in and out of Greater Manchester, which has well-documented issues with its rail capacity.

Mayor Coppard said fixing those issues in Manchester would kick-start improvements across the rest of the North, including potentially addressing the need to switch in Manchester to get to Manchester Airport from Sheffield.

The bus fare cap

Labour have extended the cap on bus fares until the end of 2025, as it was due to expire at the end of this year. However, in doing that, the government have also increased the cap by 50 per cent - from £2 to £3.

In theory, this will still mean using buses to and from Sheffield city centre should be cheaper than driving and parking, when you take into account all the costs of car ownership.

However, the move has attracted critcism from many who point out some of those who rely on public transport to navigate the city for doctors and hospital appointments, may face further difficulties from the increased price.

The move comes in the middle of a lengthy consultation period in which the SYMCA is taking feedback on proposals to bring the regions bus networks back into public control.

It has brought the examples of London and Greater Manchester where buses are under public control and fares will remain £2 or less.

In London, a single bus fare is capped at £1.75, whilst in Andy Burnham’s Greater Manchester it will remain £2.

Should South Yorkshire press on with plans for public control of buses after the consultation, buses here would also not come under the £3 cap.

Single pot settlements

Mayors are very pleased with this one.

Previous models for funding from government included a number of smaller grants and money pots with set uses and little wiggle room for other spending.

Single pot settlements will give money to authorities like the SYMCA, but with less restrictions.

It means the authority will have a set pot of money, agreed with the government, which can be spent where needed. So there should no longer be red tape in situations where there is a need to invest in one area, for example Supertram, but it can’t be done because the most recent grant is supposed to be for another separate service.

Oliver Coppard told the Local Democracy Reporting Service the policy is “massive for our region”.

The minimum wage

The chancellor confirmed the “national living wage” will increase by 6.7 per cent to £12.21 per hour. It is the legal minimum wage for over-21s and will be equivalent to £1,400 per annum for an eligible full-time worker.

It means the hourly rate of anyone over the age of 21 will increase to the new rate.

Reeves also announced plans to create a single adult minimum wage rate, as it currently differs between 18-21-year-olds and over-21s.

Businesses have expressed concerns about what impact the rise could have on job creation and costs.

Potholes

A £500million increase in the roads budget next year will target potholes.

Official statistics suggest Sheffield City Council performs very well on pothole repairs compared to the rest of the country.

However, there will be very few people who would suggest improving the quality of our roads to provide smoother journeys for motorists, bus passengers and cyclists is a bad thing.

Small businesses

Immediately after the budget, the Local Democracy Reporting Service contacted Tracey Viner, executive manager at the Sheffield Chamber of Commerce and Industry.

The chancellor announced increased in employers national insurance - a 1.2 per cent increase worth £25bn by the end of this parliament.

Reeves also announced a 40 per cent relief on business rates for retail, hospitaliy and leisure in 2025-26, up to a cap of £110,000 per business.

Ms Viner said the budget was “quite a hit on businesses” and despite some good news the majority of small and medium-sized enterprises in Sheffield will be hit by the tax hike and increasing minimum wage.

She said the chamber of commerce itself is a small company with 20 staff and the tax increase would mean hundreds of pounds in extra expenditure.

Cheaper pints

A pint of draught in the pub will techically be cheaper now, by a penny.

Labour announced a 1.7 per cent cut to draught duty in a move which received huge cheers and whoops from the Labour backbenches.

The chancellor introduced a levy on vapes, which will increase in line with tabacco. Tabacco taxes will increase by two per cent above the RPI measure of inflation for the rest of parliament.

Local government

Finally, at least for this article, Reeves announced £1.3bn of additional grant funding for local governments, which included £600m for social care.

Councils across the UK have been vocal about the challenges they face financially. It has resulted in some councils, the largest of which is Birmingham, going bankrupt.

Sheffield City Council insists it is not in the territory of going bankrupt. A positive for the council which is, by its own admission, still in a tricky place financially.

Boosting the financial position of councils should, in theory, offer the most noticable improvements to day-to-day life as local authorities hold responsibility for many everyday services.

However, the additional money from the government is by no means enough to completely rectify the problems councils face.

Councillor Zahira Naz, chair of the Finance and Performance Committee, said of announcements: “The budget recognises the challenging financial situation facing the local government sector - including in Sheffield - and wider public services.

“Although the specific impacts of the budget for the City Council are still not known in detail, we are cautiously positive following the Chancellor's speech earlier. The specific recognition of the pressure facing the special educational needs and disabilities system is welcome, as is the additional funding announced for social care and tackling homelessness, which are all key areas of demand pressure for the Council.”

This is just a small number of announcements made by the chancellor on Wednesday.

You can find more key takeaways from the budget on The Star’s website.