The Local Government Finance Final Settlement 2023/24 was announced last week, and the debate took place on Wednesday 8th February.

The RSN extends our sincere thanks to all MPs representing rural constituencies who engaged with Ministers. Through the representations made by MPs, we have been successful in getting a £10M increase in Rural Services Delivery Grant – which was on the face of things our main ask.  Further examination of the Final Settlement however revealed the absurdity of the offer for rural district authorities.

RSN analysis of the Final Settlement announced yesterday can be found here

The RSN was obviously very pleased to see Rural Services Delivery Grant (RSDG) increased by £10M.  The £95M allocation in the Final Settlement, however, still falls short of increasing the present £85M by inflation – which would have taken it to £96.27M which was the figure we included in our response to the Provisional Settlement consultation.

Whilst it was probably inevitable that an increase in RSDG would change the allocations for some authorities in Funding Guarantees it is nevertheless hugely disappointing that the benefit of the RSDG increase has not fed through to rural district councils. RSDG is a partial compensation for the existing formula not being applied (which is to the detriment of rural councils) and therefore in our opinion should not have been offset in any way. It once again looks like giving to rural with one hand and taking away with the other.

It is a nonsense that the increase in RSDG that is offered in response to the accepted inflationary pressures faced by rural authorities is wiped out for rural district authorities through it being linked to another grant that reduces by equal measure.

Points raised in the debate (key extracts from the debate can be found here) were:

• The SFA for predominantly rural areas will be £187.69 per head compared to £299.18 for predominantly urban. A gap of £111.48 or 59%
• Rural residents having to pay £109.54 more per head in Council Tax despite rural wages being lower and the cost-of-living in rural areas being higher.
• In 2022-23, rural councils were able to budget a spend of only £67 per head on so-called discretionary services compared that with urban areas, which have a spend of £131 per head.
• The existing formula must be applied from 2024/25 - in full without damping. This does not require any new monies to be found and can be funded by redistributing resources within the current settlement. There can be no justification for penalising rural authorities by continuing to deny them their full formula allocations. They have already been denied that benefit for 9 years.

We particularly applaud the initiative of Chris Loder, MP in seeking a meeting with the Secretary of State “along with the leaders of rural councils in England, to discuss how we can make real progress on sorting out this enormous disparity and unfairness in how the formula supports urban areas much more than rural ones”. It is pleasing to note that the Secretary of State agreed to such a meeting.

The RSN has offered its support to Chris Loder in which we can, in respect of the meeting.

Although for Districts the increase in RSDG being offset by decreases in the Funding Guarantee is not what we would have wished, we nevertheless feel that the RSDG increase is still good news for them. It clearly was good news in funding terms for County and Unitary Councils

The following are comments from the RSN Local Government Finance Consultants, Pixel:

“The increase in RSDG is still a good thing for the future.  Firstly, it does show that ministers (and officials) are prepared to put more money into rural authorities.  Secondly, I would expect RSDG to be rolled into funding allocations when there is a Fair Funding Review (FFR).  So, having a higher RSDG allocation now, creates a higher baseline for funding when there is a review”. 

We will discuss the issues from the 2023/24 Settlement and future actions with members at the Finance Seminar on 29th March.