PRESS RELEASE

For immediate release 

Monday 23 November 2015

MPs and rural local authorities have called on the Government to honour a commitment to ensure rural communities receive fairer funding for public services.

The call is being made by the Rural Services Network [1] and the Rural Fair Share Campaign [2], a cross-party group of MPs and other parliamentarians.

Together, the two bodies are calling for £130m promised by the Government to be allocated to individual rural local authorities and fire and rescue services.

The £130m is the amount unpaid from an initial £255m promised in 2012 [3] as being due to authorities in partial acknowledgement of the extra cost of providing services in rural areas.

Despite promising £255m, the network estimates that some 75% of the exemplified gains pledged by the Government were lost to authorities due to damping and other changes.

Network chief executive Graham Biggs, MBE, said: “In times of reducing public expenditure it is more, rather than less, important to distribute available resources between different areas fairly.

“Based on the Government’s own words in 2012, the present grant distribution methodology is – in its outcomes – unfair to rural areas.”

Mr Biggs added: “It is time to act now – and distribute the balance of the exemplified funding in the 2016/17 Settlement Funding Assessment [4].”

Network calculations show that urban areas in 2015/16 still receive some 45% (£130.99) per head in Settlement Funding Assessment grant more than their rural counterparts.

Rural residents pay, on average, £81 per head per year more in Council Tax than their urban counterparts due to receiving less government grant, said Mr Biggs.

This means rural residents pay more, receive fewer services and, on average, earn less than those in urban areas – a position the network says is unfair.

The Rural Services Network and the Rural Fair Share Campaign accepts that Revenue Support Grant is likely to disappear during the lifetime of the current Parliament.

The two groups are therefore, starting to focus attention on the way that local government funding will be provided in the future to ensure there is equity between urban and rural funding.

Mr Biggs said: “A further period of gross unfairness will be completely unacceptable.

- Ends -

Media contact:

Graham Biggs

Rural Services Network
E: [email protected]
T: 01588 674 922
M: 07966 790197

Notes to Editors:

1) The Rural Services Network is a group of more than 200 organisations working together to improve the delivery of rural services across England. The two operating arms of the network are the Sparsity Partnership for Authorities Delivering Rural Services (SPARSE) and the Rural Services Partnership. Further information and a full list of members are available at http://www.rsnonline.org.uk.

2) The Rural Fair Share Campaign is a cross-party group of MPs, who support an impartial, objective, needs-based approach to local government funding. The campaign aims to reduce the rural penalty, which sees urban councils receive approximately 45% more funding per head than rural councils. For details, visit http://www.ruralfairshare.org.uk.

3) As calculated by the Rural Services Network, the £130m is the residual amount of Revenue Support Grant left to be allocated from an initial (pre-damped) amount of amount of £255m exemplified by the Government in 2012 (through the Department for Communities and Local Government) as being due to authorities as a result of increases made in the sparsity adjustments to the formulae be paid now through a Rural Service Delivery Grant mechanism. In a DCLG Summer 2012 Consultation the Government said that it “accepts, based on available evidence, that such a correction [a correction applied so that there is proper recognition of the additional costs of delivering services in rural areas] is warranted”.

The government therefore proposed, and subsequently agreed, that increases should be made in the sparsity weightings. The Summer Consultation exemplified its proposals (pre-damping) as amounting to some £255m and listed the authorities to which the adjustment would relate and an amount “due” to each authority.

Despite the fact that the proposals were, in effect, seeking to right an historic wrong, on average, some 75% of the exemplified gains were lost to authorities due to damping and other changes. From 2013/14 DCLG introduced what is now termed Rural Service Delivery Grant worth £15.5m (equal to just some £1.10 per head) paid to 94 authorities in 2015/16.

The network estimates that taking this grant, and the amount that was paid to authorities, into account, a sum of £130m of the £255m is still due to authorities once an adjustment is made for the scale of government grant reductions overall since that time.

The full Ask document is available to download at: http://www.rsnonline.org.uk/images/files/TheAskOfGovernmentFor2015.pdf

4) The government's provisional local government finance settlement 2016/7 is due to be announced in December 2015 with a final settlement expected in early 2016.

ENDS.