Last week, whilst announcing an addition £1.6 bn of funding for local authorities (now £3.2bn in total), the Ministry of Housing, Communities and Local Government confirmed that the move to 75% business rates retention and the fair funding review will now not go-ahead next year

It advised that this will ‘allow councils to focus on meeting the immediate public health challenge posed by the pandemic’

When the Fair Funding review was announced initially, the then Secretary of State stated, “We need to recognise that demographic pressures are affecting different areas in different ways, as is the changing cost of providing services.  So, we are undertaking a Fair Funding Review, to thoroughly consider how to introduce a more up-to-date, more transparent and fairer needs assessment formula.”

The Rural Services Network has long campaigned for fairer funding for rural areas to put right the historic inequities of Government policy, and has been active in the review, making representations to Government on behalf of all rural areas.

Allocations in the Local Government Finance Settlement for 20/21 meant that urban areas still receive some 62% (£109) per head in Settlement Funding Assessment grant more than their rural counterparts. 

Rural residents pay, on average, 22.7% (£105) per head more in Council Tax than their urban counterparts due to receiving less government grant.

On the announcement last week, Graham Biggs, CX of the Rural Services Network said:

“We welcome this delay to the Fair Funding Review, to enable Councils to focus on dealing with the pandemic.  The Government must ensure that all Councils are enabled to support their communities.  Huge reduction in income levels, along with additional costs to deliver services while protecting the safety of their own staff has meant that Local Authorities are facing unprecedented challenges.

We will continue to campaign for fair funding for our rural communities, during the outbreak and as restrictions are eased in the future. The issues for Rural Councils being considered in the Fair Funding Review have not gone away and the pandemic has clearly shown the fragility of relying on Business Rates and Council Tax to address Council’s spending needs. Long-term Fair Funding for all tiers of local government serving rural areas must be addressed as soon as possible”