5 November 2013
Currently, urban councils receive 50% more government grant per head than local authorities in rural areas despite the fact that rural residents pay on average £85 per head more in council tax and many public services are more expensive to deliver for sparsely-populated councils. Last night's petitions (totalling some 20,000 public signatures) oppose Government plans to lock-in this inequality for the next six years and call for the funding gap to be reduced by at least ten per cent by 2020.
Graham Stuart MP, who chairs the parliamentary Rural Fair Share campaign, commented that: "Last night's petitions show the strength of feeling amongst the public living in rural areas. We set up the Rural Fair Share campaign because the rural voice has been too little heard and too easily ignored. Historic injustices have been reinforced rather than removed. This must change. I hope that the Government recognises the strength of feeling out there and considers this as we move towards the next Local Government Finance Settlement."
In a separate development the Government last week issued its response to the EFRA Committee inquiry into rural communities. In its report the Committee supported the Rural Fair Share campaign's calls for the rural/urban funding disparity to be reduced to 40% or less by 2020. However, in its response the Government disagreed with this recommendation, citing that producing figures at a national level for per-capita spending is "inherently problematic" due to the multi-tier system of local government in England.
Councillor Roger Begy OBE, Chairman of SPARSE-Rural and Leader of Rutland County Council said: "We agree that calculating the rural penalty is inherently difficult, but the various methods discussed with DCLG all put it at 50% or greater. The Government's claim that "funding per head of population is reducing less in predominantly rural authorities than in their urban counterparts in all classes of authority" is grossly misleading. There are no rural London Boroughs or Metropolitan Districts, so their very high funding levels are completely excluded from DCLG's comparison. These petitions represent the latest development in an issue that is not going away for this Government."
The Rural Services Network also calls for an agreed definition of "rurality" for analysing local government funding, something which is not currently in place.
· The Rural Fair Share Campaign brings together Members of Parliament and Peers, on a cross-party basis, along with organisations, community groups, and individuals concerned about the welfare of rural communities, in order to work towards fairer funding settlements that better reflect real needs. The Rural Fair Share Campaign supports impartial, objective, needs based policy which is equitable to all
The Rural Services Network is a membership organisation devoted to safeguarding and improving services in rural communities across England. It comprises some 250 organisations including local authorities, other service providers (public, private and voluntary sector) and national bodies interested in issues affecting rural areas. SPARSE Rural represents a grouping of over 110 of the most rural county, district and unitary councils in England (as identified by Government through their Predominately Rural and Significant Rural Council Classifications)
· The SPARSE/Rural Services Network's full reply to the Government's response in respect of local government finance to the EFRA Select Committee Report is set out below:
Size of the Rural Penalty
· We agree that calculating the rural penalty is inherently difficult, but the various methods discussed with DCLG all put it at 50% or greater
· The Government's claim that "funding per head of population is reducing less in predominantly rural authorities than in their urban counterparts in all classes of authority" is grossly misleading. There are no rural London Boroughs or Metropolitan Districts, so their very high funding levels are completely excluded from DCLG's comparison
· The 2013/14 settlement did indeed include improved formulae for rural authorities, but three-quarters of any gains were removed through damping and the Government does not intend to allow the rest to reach authorities until at least 2020
· The 2013/14 settlement gave the areas most dependent on grant the smallest reductions in funding, but the proposed 2014/15 and 2015/16 settlements completely reverse that position, giving the smallest reductions to those who are already benefiting from their high taxbases. This operates to the detriment of a majority of rural areas as well as all the most deprived authorities
Reducing the Rural Penalty
· An agreed definition of rurality for analysing local government settlement is NOT in place. We cannot agree that it is correct to ignore funding for London Borough and Metropolitan Districts
Monitoring the Impact of Rates Retention
· The Government has completely ignored rural issues in its consultations on funding for 2014/15 and 2015/16 so to suggest that this is part of an on-going rural monitoring process is most misleading
Graham Biggs MBE
Rural Services Network
T: 01588 674 922
M: 07966 790197
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