• Urban areas in the 18/19 provisional settlement still receive some 49.34% (£123) per head in Settlement Funding Assessment grant more than their rural counterparts
• Rural residents pay, on average, 20.17% (£91) per head more in Council Tax than their urban counterparts due to receiving less government grant
• Rural residents pay more, receive fewer services and, on average, earn less than those in urban areas and that is inequitable
It costs more to deliver services in rural areas.
The way that the Local Government Finance Settlement has been calculated has resulted in rural areas being significantly underfunded when compared to urban areas for a number of years.
We want fairer funding for rural areas.
We appreciate that we are in a time of austerity and cuts are being made to local government funding, however we are campaigning for a fairer distribution of the funds, so that historical imbalances where rural areas are penalised, do not continue.
Transitional Relief must continue until 100% Business Rates Retention is introduced
- There is still a further £65M due as Rural Services Delivery Grant (to compensate for the damping of the 2012 changes to the formula)
- RSDG should go to all authorities exemplified by DCLG as benefitting from the 2012 formula changes
The Rural Services Network continues to make strong representations about the impact of this settlement on rural areas. On 15th January 2018 we met with Rishi Sunak MP, the Parliamentary Under Secretary of State (Minister for Local Government) to discuss the settlement formula which currently is unfair to rural areas.
The Provisional Local Government Funding Settlement was announced by the Rt Hon Sajid Javid MP on 15 December 2016.
The consultation on these proposals ended on 13 January 2017 and the Government are currently considering the responses.
The Rural Services Network have made strong representations about the impact of this settlement on rural areas. On 10th January we met with Marcus Jones MP, the Parliamentary Under Secretary of State (Minister for Local Government) to put forward our case and subsequently met with a number of MP's to highlight our concerns.
The Final Local Government Finance Settlement for 16-17 was announced by Greg Clark MP on 8th February 2016:
The key part of this announcement in relation to rural authorities is as follows:
"There is good reason to believe that the demographic pressures affecting particular areas – such as the growth in the elderly population – have affected different areas in different ways, as has the cost of providing services.
So I can announce that we will conduct a review of what the needs assessment formula should be in a world in which all local government spending is funded by local resources not central grant, and use it to determine the transition to 100% business rates retention.
Pending that review, I recognise the particular costs of providing services in sparse rural areas.
So I propose to increase by more than fivefold the Rural Services Delivery Grant from £15.5 million this year to £80.5 million in 2016 to 2017.
With an extra £32.7 million available to rural councils through the transitional grant I have described, this is £93.2 million of increased funding compared to the provisional settlement available to rural areas."
Whilst this front loading of Transitional Relief and RSDG is welcome, we maintain that it does not address long term underfunding for rural areas and we continue to campaign on this point.
Responses to the Governments consultation which included a question on rural funding can be found here:
There was a backbench debate in the House of Commons on 11th January led by then Rural Fair Share Chairman Graham Stuart MP which saw a host of MPs speak out against the government proposals.
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