Tuesday, 15 September 2015 19:30

Minister: More to be done on funding

Written by  Ruralcity Media
Minister: More to be done on funding

MORE must be done to narrow the gap in spending power between rural and urban local authorities, the government has conceded.

Rural residents often earn less than their urban counterparts yet pay more in council tax yet receive fewer services in return.

On average, rural council tax is £81 per head higher yet urban areas receive government grants 50% higher per head than those in the countryside.

This means people in the country earn less, pay higher council tax and then receive substantially less support for services.

Delivering services in sparsely populated rural areas also tends to be more expensive, which can add to the burden.

Communities and local government minister Mark Francois said he recognised that rural authorities often faced additional challenges when it came to delivering services.

Mr Francois made the comment during a debate in response to South Cambridgeshire MP Heidi Allen on Monday (14 September).

Ms Allen asked what steps the government was taking to reduce the difference in funding levels between urban and rural areas.

Mr Francois responded: “Our reforms give all authorities substantial scope to increase revenues through promoting growth.

He added: “I accept that most rural authorities face challenges in delivering services that other authorities do not.

“Consecutive local government finance settlements have delivered a steady reduction in the gap in spending power levels between urban and rural authorities.”

Ms Allen suggested that her constituency had a “creative way for local authorities to look to bridghe the funding gap” – and she asked Mr Francois for a meeting to hear her case.

Saying he would consider a meeting, Mr Francois said the government's business rates retention scheme provided a strong incentive to local councils to reap the rewards of economic growth.

“Councils now benefit from nearly £11bn under the scheme, which should deliver a £10bn boost to national GDP by 2020. If we meet, we can discuss these matters in more detail.”

The minister was pressed further by Beverley and Holderness MP Graham Stuart, who chairs the parliamentary Rural Fair Share campaign for a better deal for the countryside.

Mr Stuart asked Mr Francois whether he agreed that closing the rural-urban funding gap was an important part of improving local government in rural areas.

Mr Francois said he recognised that Mr Stuart had campaigned tirelessly on the rural-urban funding gap issue for some time.

“As a result, he will know that the previous government delivered a steady reduction in the so-called urban-rural gap in spending power levels,” said Mr Francois.

Consecutive settlements had helped to address the gap, and between 2012-13 and 2015-16 the disparity had been reduced by £205m.

“A great deal has been done, but there is still more to do,” said Mr Francois.

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