The recent announcement by the Government of a £64 billion funding package for local councils has ignited a widespread discussion, with a particular focus on its repercussions for rural areas. During a parliamentary debate on Wednesday to approve the Local Government Finance Settlement for 2024-2025, the topic received extensive attention.

Chris Loder, MP for West Dorset, praised the distribution of £110 million through the Rural Services Delivery Grant, noting that places such as Dorset are in line to receive as much as £3.2 million. Nevertheless, Loder raised concerns about whether these funds would be sufficient to address the challenges at hand, especially considering an additional £1.5 billion allocated for social care. This concern is particularly pertinent given West Dorset's aging population, with a third of its residents being over 65, prompting questions about the sufficiency of Dorset's portion of the social care fund.

Chris Loder articulated: 

‘I would like to reiterate some of the unfairness that remains in the “urban versus rural financing” debate. Rural areas still receive some 59% less per head in settlement funding than their urban counterparts; in real terms, that is about £111. Rural residents will also pay on average 20% per head more in council tax than their urban counterparts. West Dorset constituency, which I am proud to represent, has an enormous county boundary with the county of Somerset. Many of my constituents use services and facilities in Somerset, and vice versa. It is fair to say that over the past month, many of my constituents and people in Somerset have looked with absolute horror at how the proposed council tax increases will affect them. For the benefit of the House, I would like to clarify the extent of those increases in real terms. Those living in Yeovil can expect a 90% increase in the town council precept, while those living in Taunton, the county town of Somerset, can expect a 200% increase. In real terms, that is an increase of between £109 and £277 per annum in the town council precept alone.’

Echoing these views, Helen Morgan, MP for West Shropshire called for immediate action towards equitable funding and pointed out the cost disparities in service delivery between rural and urban councils:

‘We need to look urgently at the issue of fair funding, taking into account the cost of service delivery. While the £15 million increase in the rural services delivery grant is welcome, the total budget of £120 million will not touch the sides of the social care issues that councils in rural areas face. Let me return to this point about the difference between rural and urban councils. The Rural Services Network has said that urban councils get 38% more than rural ones. However, we should not be having an argument about robbing Peter to pay Paul, because those urban councils are in crisis as well. We need to look at the overall cost of delivering services and find a solution to deal with the fundamental drivers of increased costs.’

Steve Double, MP for St Austell and Newquay, pointed out the unique difficulties in service delivery faced by rural and coastal communities:

‘There should be a fairer distribution of the funding that the Government make available, to accurately reflect need, demand, and the cost of delivering services in rural areas. I massively welcome the rural services delivery grant and the uplift announced for this coming year, but it is not a long-term solution, and we need to address the fundamental issue of funding for local councils in rural areas.’

This discussion has brought to light the urgent need for a revaluation of funding distribution methods to guarantee that rural communities are fairly supported. As the Government progresses with its funding initiative, addressing these issues will be essential to ensure equitable access to services and support for all communities, regardless of their location.

You can read the full transcript of this debate here
Find out more about our campaign for Rural Fair Funding here

The Rural Services Network has been instrumental in this increase of £15Million to the Rural Services Delivery Grant, supporting rural MPs with information about their local allocation from the settlement for their constituencies and briefing papers to understand the history of the changes to the formula.

Kerry Booth, Chief Executive of the RSN said: “It is great to see some of our MPs debating rural fair funding, and using our analysis and information to state the facts.  We of course welcome the additional £15million to the Rural Services Delivery Grant but recognise that it doesn’t go to all rural authorities experiencing those additional costs of delivery services to sparsely populated areas.  In times of austerity, it is even more important to allocate funds fairly.  The Government needs to commit to completing the fair funding review, started years ago to ensure a fair distribution of funds.”