MPs rally for fairer rural funding

A cross-party group of MPs has called on the government to reconsider the impact its funding settlement will have on rural communities.

The group of more than 45 MPs said the 2013/14 Local Government Financial Settlement threatened to further widen the gap between the funding given to rural and urban councils.

This would entrench the injustice suffered by rural areas, it warned.

Urban councils already receive 50% more per head than rural areas despite evidence that many services are more expensive to deliver in sparsely populated areas.

The Rural Fair Share Campaign is calling on the government to amend the provisional settlement to reduce the gap between rural and urban councils in the coming year.

It also wants communities secretary Eric Pickles to set out a plan to close the funding gap between rural and urban councils to no more than 40% by 2020.

Mr Pickles has insisted the funding settlement is fair for urban and rural communities.

But campaign chairman Graham Stuart, who is also the Conservative MP for Beverley and Holderness, said: “The rural voice has been silent for too long.”

Conservative, Liberal Democrat and Labour MPs had come together to demand a fair share of government funding for rural councils, said Mr Stuart.

The Rural Services Network has calculated that rural residents pay £75 more in council tax than urban residents yet government grants for urban areas are 50% higher per head of population.

At the same time, rural residents earn less, on average, than people in cities.

“Enough is enough,” said Mr Stuart. “People in rural areas earn less, pay higher council tax and then receive substantially less support for services.”

Mr Stuart said the group was arguing for fair allocations within the spending evelope rather than arguing for more government spending overall.

“When money is tight it is more important, rather than less important, for funding allocations to be fair,” he said.

“We are determined to stop the inadvertent worsening of the situation this year and also to campaign for a reduction in the rural penalty from 50% to 40% by 2020.”

Liberal Democrat MP Tim Farron (South Lakeland, Cumbria) said the Rural Services Network research highlighted the inequity of the funding formula.

Rural councils like South Lakeland would face a bigger reduction in central grant and spending power than urban councils, he said.

Mr Farron said he would be organising a delegation of rural Liberal Democrat MPs to meet local government ministers to press the case for South Lakeland further.

“Rural authorities for the last 10 to 12 years have been seriously under funded in relation to urban areas,” said Mr Farron.

David Evans, South Lakeland District Council’s portfolio holder for finance, said the government needed to amend the formula and end underfunding.

Mr Evans said: “If the formula is changed it will unlock funds to allow us to create jobs, attract investment and boost our economy.

He added: “It could make a massive difference and this why we are fighting as hard as we are on this issue with local councils throughout England.”