PRESS RELEASE
For immediate release

Wednesday, 17 January 2018

Rural local authorities are set to lose one third of their funding from central government – in a move which will pile further pressure on already over-stretched public services, the Rural Services Network (RSN) has warned [1].

RSN Chief Executive Graham Biggs MBE issued the warning as he, and other senior RSN representatives, met new Local Government Minister Rishi Sunak to discuss the Provisional Local Government Finance Settlement for 2018-19 and its impact on rural communities [2].

Under the original Four-Year Final Local Government Settlement, rural areas were set to lose over 31% of their central Government funding, while urban areas would lose just 22%, said Mr Biggs.

But the recently announced Provisional Local Government Finance Settlement for 2018-19 made the situation even worse.

Mr Biggs said: “Rural residents get a really rough deal. On average, they earn less than their urban counterparts and pay more in council tax – but receive less government grant and receive fewer services which cost those residents more to access.

“In addition, rural residents pay some £3000 more per annum for essentials than their urban counterparts.”

Rural areas have long been unfairly treated and underfunded when it comes to Local Government Finance Settlements [3].

Rural areas also have significantly larger older populations than urban areas – which contributes to higher costs when it comes to delivering public services, including social care, to sparsely populated communities [4].

It is also grossly unfair that rural residents are expected to pay for more of their local government services through council tax than their urban counterparts [5].

Mr Biggs said: “The Provisional Settlement reinforces the view that there appears to be a conscious policy decision by the government that rural services should be increasingly funded by council tax payers.”

This meant there was an unacceptable widening in the gap in Government Funded Spending Power between predominantly urban and predominantly rural areas, said Mr Biggs.

With delays in introducing a new fairer funding formula, there was a clear need for the government to extend transitional arrangements to ease the pressure on services [6].

Mr Biggs said: “'These deeply held concerns were put by the RSN directly to Local Government Minister Rishi Sunak.

"As an MP representing the largely rural constituency of Richmond, North Yorkshire, it was clear that the Minister is well versed in the problems faced by rural authorities in delivering services in a continuing climate of austerity.

"Mr Sunak recognised RSN's role in championing rural areas and campaigning on behalf of rural authorities as they struggle to mitigate the effects of years of budgetary constraints.”

Media contact:

Graham Biggs MBE
RSN chief executive
T: 01588 674 922
M: 07966 790197
E: [email protected]
W: www.rsnonline.org.uk

Editor's notes:

[1] The Rural Services Network is the only non-governmental organisation representing the interests of rural service providers and the communities that they serve. It involves currently some 154 Local Authorities and over 100 other service providers. It comprises SPARSE Rural, the Rural Assembly, the wider Rural Services Partnership and the RSN Community Group. The organisation works with Rural England, a stand-alone CIC research group. For details, visit www.rsnonline.org.uk.

[2] The provisional local government finance settlement for (2018-19) was announced on Tuesday, 19 December 2017. It is due to be finalised over the coming weeks following a government consultation which ended on Tuesday, 16 January 2018. A delegation from the Rural Services Network met Local Government Minister Rishi Sunak on Monday, 15 January 2018. To see the provisional settlement, visit: https://www.gov.uk/government/collections/provisional-local-government-finance-settlement-england-2018-to-2019

[3] In 2015/16, Settlement Funding Assessment (SFA) per head of population in predominantly urban areas at circa £428 was already some 43% higher than in predominantly rural areas of circa £299. By the end of the settlement period, SFA per head in predominantly urban areas will reduce by just 30.79% compared to a reduction of 41.25% in predominantly rural areas.

[4] Over the next few years, the number of older residents in shire areas is projected to rise at an average annual rate of 2.0%, compared to an English average of 1.8% – and an increase of 1.9% in London boroughs  and 1.5% in metropolitan boroughs. The use of the Social Care Relative Needs Formula, frozen in 2013/14, in the Better Care Fund means that social care authorities serving rural areas are not being recompensed for the significant growth in their older population. In 2019/20, the average predominantly urban resident will attract £37.74 per head in Improved Better Care Funding, £8.20 per head more than rural residents per head (of £29.54).

[5] Council Tax per head (as reflected in the Provisional Settlement) in 2018/19 is £541.46 for Predominantly Rural Areas compared to £450.58 in Predominantly Urban Areas. The gap is a completely unfair, and unacceptable, (circa) £91 per head. By 2019/20 71% of Spending Power will be paid for through Council Tax in rural areas compared to just 57% in urban. In other words, the government is content for people in rural areas to pay more council tax from lower incomes and yet receive fewer services than their urban counterparts.  

6) With Transition Grant disappearing in 2018/19, Government Funded Spending Power (which excludes Council Tax) in Predominantly Urban Areas will be £371.91 per head (down 5.76% on 2017/18). By comparison, in Predominantly Rural Areas, Government Funded Spending Power will be £249.03 per head (down 9.57% on 2017/18). 

ENDS

Our Key Messages:

Public Sector Funding
Central Government has historically and systematically underfunded rural areas giving them less grant per head than urban areas – despite the fact that it costs more to provide the services. Rural residents earn less on average than those in urban areas and therefore pay more Council Tax for fewer local government services. Government policy, implicitly, is that council services in rural areas are more reliant on funding through council tax than their urban counterparts. We demand fairer funding for all public services serving rural areas.

Barriers to Access
Rural residents and businesses face multiple barriers in terms of access to key services, including transport and broadband. Yet councils providing services to rural residents receive less money from government, pay disproportionately more for fewer services and typically earn less than people in urban areas. As a result rural residents suffer multiple disadvantages.

Future of Rural Areas
Rural communities contribute a great deal to the national economy but are facing threats to their future. This is due to a combination of chronic underfunding, demographic challenges, diminishing resources, with the needs of rural areas being systematically overlooked. Without action conditions in rural areas will deteriorate further. It is in the national interest that we all work together to revitalise this fundamental national asset.

Health and Wellbeing
Despite its idyllic image, rural communities often experience difficulties in accessing health and support services. This is becoming increasingly difficult as specialist services are centralised to remain resilient and poor transport links reduce access. There are recruitment and retention issues amongst medical staff in rural areas. Rural residents are therefore vulnerable to isolation and poorer health outcomes in the long term.