PRESS RELEASE
For immediate release

31 July 2013

Rural local authorities have reacted with disbelief to the Government's latest funding consultation which moves considerable resources to urban areas in London and the south east of England.

The consultation – covering the period to March 2016 – actually widens the "rural penalty", where urban dwellers presently receive 50% more funding per head than rural dwellers despite paying lower council taxes.

Rather than taking account of the Environment, Food and Rural Affairs Select Committee, which said:

"The Government needs to recognise that the current system of calculating the local government finance settlement is unfair to rural areas" (Sixth report of Session, paragraph 8)

and:

"Defra needs to work closely with DCLG to ensure future local government finance settlements reduce the rural penalty" (op. cit., paragraph 10)

the DCLG consultation diverts yet more grant to those councils that are already benefiting from high house prices, a greater rate of house building starts and the fact that the Government chose to delay full implementation of its own council funding formulae until at least 2020.

Rural Services Network Chief Executive Graham Biggs said: "This is yet another body blow for rural councils already struggling to provide services to isolated communities."

Mr Biggs added: "With rural councils facing a further 20% cut in funding over the next two years, it is difficult to see how even the present level of services, already weakened by historic under-funding, can be maintained."

Roger Begy, Chairman of the Rural Services Network and Leader of Rutland County Council, said: "It is difficult to believe that the Government has ignored both the Select Committee and the significant number of MPs across the political spectrum that have shown them the need to reduce the funding gap between urban and rural by 10% between now and 2020.

"The smallest funding cuts are with those authorities who are already well placed to help themselves through business development."

He added: "It is essential that the greater needs and fewer development opportunities in rural areas, so clearly identified by the Select Committee, are properly considered as a matter of urgency."

ENDS

Media contact:

Graham Biggs MBE
Chief Executive
Rural Services Network
E: [email protected]
T: 01588 674 922
M: 07966 790197

NOTES TO EDITORS:

1. The latest consultation, covering the local government finance settlements for 2014-2016 was published on 25 July.

2. Over this two-year period, Predominantly Rural local authorities see a cut of 21.2% in "settlement funding" compared to 20.8% in urban areas. This urban figure, however, hides a huge variation with the Greater London Authority seeing an increase of 1.0% and the smallest reductions among main authorities being urban or less-rural Surrey (14.5%), Buckinghamshire (15.3%), Hampshire (16.1%), Hertfordshire (16.4%), West Sussex (16.5%), Richmond-upon-Thames (16.6%) and Bracknell Forest (16.7%). All these authorities benefit because they depend less on grant than rural and more-deprived urban authorities due to their greater council tax income. Other than the GLA, they also all benefit from the Government's decision to implement only a small proportion of their new council funding formulae in 2013/14 and thereby receive extra resources through "damping" rather than losing grant as the formulae suggest.

3. The Rural Services Network is a group of more than 200 organisations working together to improve the delivery of rural services across England. The two operating arms of the network are the Sparsity Partnership for Authorities Delivering Rural Services (SPARSE) and the Rural Services Partnership. Further information and a full list of members are available at http://www.rsnonline.org.uk

4. The Rural Services Network seeks to establish best practice across the spectrum of rural service provision. The network has representation across the complete range of rural services, including local authorities, public bodies, businesses, charities and voluntary groups. We are devoted to safeguarding and improving services in rural communities across England. We are the only national network specifically focusing on this vital aspect of rural life.

5. The Rural Services Network exists to ensure services delivered to the communities of predominantly and significantly rural England are as strong and as effective as possible. The term 'predominately rural' refers to counties and Local Authority districts with at least 50 percent of their population living in rural settlements (ie. rural towns, villages, hamlets and dispersed dwellings) as identified in the Office for National Statistics' rural definition, and including larger market towns as identified in the Defra classification of Local Authority districts. The term 'significant rural' refers to those Local Authorities who are between 25% and 50% rural under the same classification. The rural definition and classification were devised by the Rural Evidence Research Centre (RERC) at Birkbeck College.

ENDS