The Minister of State for Housing, Communities and Local Government, Jim McMahon MP has emphasised the direction of the new Government confirming they will “Provide more stability for councils through multi-year funding settlements, ending the competitive bidding process and reforming the broken audit system. Future local authority funding decisions are of course a matter for the spending review and the local government finance settlement, in which we are fully engaged.”

This came during oral questions in the House of Commons on Monday 2nd September where he was quizzed on what steps are being taken to ensure local authorities have adequate resources to fund local services.

He added, “Any fair funding formula of course has to address the range of challenges that local authorities face, whether that is their local tax base, and how much they can realistically generate from their local communities and businesses, or the cost of service delivery and the demand within a local community. We will ensure that the fair funding formula, of which multi-year settlements are a part, is done with that rigour.”

The Rural Services Network has long campaigned for a fairer allocation of funding to rural local authorities.

In 2024-2025 urban councils received 36% more in Government Funded Spending Power per head compared to rural councils.

As a result of years of underfunding, rural councils have had to increase council tax leading to a situation where rural residents pay on average 20% more per head in council tax than urban residents.

Rural residents receive less Government funding, pay more in council tax and receive less services than those in urban areas.

Kerry Booth, Chief Executive of the RSN said: "We welcome news that the funding formula must address the challenges that local authorities face, with an ageing population in rural areas that places additional demands on services, rural local authorities need a fairer allocation of funding to meet those needs."