The Rural Fair Share Campaign is a cross-party group of MPs, who support an impartial, objective, needs-based approach and a fair share of available national resources to both local government funding and the funding by central government of other essential public service.
The current campaign in respect of local government funding aims to reduce the rural penalty, which sees urban councils receive approximately 49% more funding by way of Government Grant per head than rural councils.
The Problem:
The key issues regarding local government and other public services funding for rural areas are:
– 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 in rural areas. Rural residents earn less on average than those in urban areas and therefore pay proportionately more of their earnings from the local economy in Council Tax than their urban counterparts yet receive fewer local government services.
– Government policy, implicitly, is that council services in rural areas are more reliant on funding by local council tax payers than their urban counterparts.
The Rural Fair Share Campaign demands fairer funding for all public services serving rural areas:
For the period from 2015/16 to 2019/20, had all Authorities had the same percentage of funding cuts Predominantly Rural Areas across England, collectively, would have received £241.18M more. In that same period, instead of having cuts, Westminster will gain additional government grant of £41.1M
Urban areas in 17/18 still received some 45% (£116) per head in Government Funded Spending Power for local government services more than their rural counterparts. The disparity in funding is set to increase to 55% in 2019/20 (taking figures from the multiyear final local government finance settlement, 2017/18..
Using figures from the final local government settlement, 2017/18 , rural residents would pay in 2017/18, 17% (£86.99) per head more in council tax than their urban counterparts due to receiving less government grant. The multiyear settlement for 2017/18 showed this gap remaining unchanged until at least 2019/20.
Rural residents pay more, receive fewer services and, on average, earn less than those in urban areas and that is inequitable.
Adult social care as a percentage of local authority total service expenditure is higher in Predominantly Rural areas, standing at 23% in 2016/17 (18% for Predominantly Urban).
Hourly rates for personal social care home care (external) are 9.3% greater in Predominantly Rural local authority areas when compared with the England average (using data from Personal Social Services: Expenditure and Unit Costs, England – 2015-16).
Public Health Allocations to local authorities in 2017/18 were 56.1% greater per head in urban areas than rural.
Police grant funding per head in 2017/18 was 41.1% greater for urban areas than rural.
Fire authority funding per head in 2017/18 was 32.4% greater for urban areas than rural. This disparity is forecast to increase to 36.4% by 2019/20.
There is also evidence that services are more expensive to deliver in rural areas because of the additional costs associated with the sparse geography.
Rural areas often make great use of the limited public funds received. This has sometimes been used as an excuse to provide them with less funding.
The Solution:
In times of reducing public expenditure, it is more – rather than less – important to distribute available resources fairly. It is essential that the Government gives rural areas A fair share of available national resources.
The Rural Fair Share campaign continues to call for the Government to increase the Rural Services Delivery Grant by £65 million. It is also calling for the Transitional relief due to end in 2017/18 to be extended to cover the whole of the 4 year Settlement period.
The Government agreed in 2012 to give greater weighting to sparsity in the local government funding formula. When the new formula was applied, rural areas stood to gain £250m.
But some three-quarters of these gains were lost due to “damping” – a method used by the Government to minimise big swings in funding grants.
The campaign is calling for rural local authorities to receive the money outstanding from the change to the formula in 2012.
Following sustained lobbying from the Rural Fair Share Campaign in 2012, a one-off “Efficiency Support for Services in SPARSE areas grant” was awarded to rural local authorities, worth £8.5m that year. This has increased to £85.0M in 2018/19 and is now called the Rural Services Delivery Grant.
The formula which distributes funding to different local authorities is under review at present and the Rural Fair Share Campaign will seek to ensure that there is no repeat of historic unfairness for rural areas.