New Money For Mayors, While Rural Councils Are Still Losing Theirs

The Government has trailed a major devolution package for Wednesday’s Budget. It says nothing yet about rural England, where council funding is already moving the other way.

At the weekend the Prime Minister and Chancellor set out plans for £285 million of “Good Growth” funding next year, £150 million for strategic authorities, and a £1.5 billion borrowing facility for mayors from 2028.

Equal Ground welcomes plans to end bidding for Whitehall funding pots. But the briefings make no mention of rural or sparsely populated areas.

This silence matters. Money is being taken from rural councils. The £110 million a year Rural Services Delivery Grant was ended in 2025. The Rural England Prosperity Fund closed in March 2026. The three-year funding settlement agreed in February gives less weight to remoteness, and county and rural councils face an estimated £2.7 billion funding gap. Westmorland and Furness Council expects its government grant to fall by more than 30% by 2028/29.

From next April, mayors will keep a share of business rates, and from 2028 a share of local income tax. Authorities with large cities will gain most. In July the Government promised to “consider how these growth incentives can be balanced with the need for fairness between places”. Wednesday’s fiscal devolution roadmap is the moment to show how.

Equal Ground’s paper, Rural Interests in the Devolution Settlement, sets out four safeguards that add nothing to the overall cost:

• Fair funding: extra weight for sparsely populated areas and a guaranteed minimum when local tax receipts are shared.
• Rural duty: growth plans in areas with large rural populations should indicate how rural communities benefit.
• Rural Commissioners: an independent rural voice able to review draft spending plans.
• No permanent second tier: a funded timetable for areas without a mayor to gain the same powers as everyone else.

Richard Gueterbock, co-author, said: “Rural areas are being further disadvantaged. While new money is going to mayors, rural councils are losing out. If growth in every postcode is to mean anything, the rules must recognise the extra cost of serving sparse areas. This must be addressed in the Budget this week.”

Julian Ranger, co-author, said: “The Government has already said it will weigh growth incentives against fairness between places. That is the right instinct, but the Chancellor’s roadmap should include a firm commitment to growth in, and funding for, rural England.”