Monday, 24 October 2011 12:09

Campaign to end rural funding deficit

Written by  Ruralcity Media
Campaign to end rural funding deficit
THE Rural Services Network has called on the government to reduce the deficit in local authority funding for those who live in the countryside in comparison to those who live in towns from the staggering figure of 50%, down to 40%.

Research released in 2009 shows that the funding gap between urban and rural areas has grown dramatically since 1997 and now stands at £163 per head.

This is not because of a shift in needs over that time but the result of the previous government's alterations to the distribution grant to favour certain types of urban authorities.

Responding to the formal consultation from DCLG, the RSN is asking the government to use the Local Government Resource Review to end this inequality.

The network has long been concerned that the 4 Block Model used for distributing central government grant has failed to properly recognise both rural deprivation and the significantly higher delivery costs of some important services in predominantly rural areas.

Network chairman councillor Roger Begy said: "While in opposition, Bob Neill MP described the system as "beyond its useful life" and said that the operation of the formula system 'significantly disadvantaged shire areas'.

"The system is still broken and we are calling on Mr Pickles and Mr Neill not to miss this opportunity to start to fix it.

We accept that deprived areas should receive higher levels of funding and are not calling for complete parity. However, in light of the higher cost of providing essential services to rural residents we feel that reducing the gap from 50% to 40% is both fair and justified.

There is a further danger in the government's current proposals that full resets could be set at ten year intervals. Unless our concerns are addressed there is a danger that this unfairness could be locked in for ten years with a simply massive impact on rural services over that period.

Specifically the Rural Services Network is calling on the government to:

• Increase the Environmental, Protective and Cultural Services (EPCS) district sparsity indicator by 50% and reduce the density indicator to offset the extra relative needs formula (RNF);

• Reinstate the EPCS county sparsity indicator removed in 2003-04, offset by reducing the density indicator by about one quarter; and

• Double the existing discretionary Older Peoples' Personal Social Services (PSS) sparsity adjustment from 1% of total funding to reflect the very real costs of delivering domiciliary services in remote communities.

In addition to changes to the funding formula, the network is also calling on the government to:

• Revise the baseline to ensure that the gains to rural areas go some way in rectifying past wrongs are not are neutralised by damping; and

• Increase the Fixed Cost Allowance within the formula so that it reflects the impact of inflation since it was last fixed.

Given the relatively small size of rural authorities compared to urban ones, the effect of these measures on other authorities would be small. It would not create significant change or turbulence for local authorities at the start of the new system.

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