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A call for a fairer funding deal for rural district councils has been endorsed by Peter Luff MP for Mid Worcestershire.
He joined a cross-party group of more than 45 MPs Iat a meeting in Parliament to call on the government to reconsider the 2013/14 Local Government Financial Settlement. This settlement will widen the funding gap between rural and urban councils.

Urban councils already receive 50% more per head than rural areas. This is despite evidence that many services are more expensive to deliver in sparsely populated areas and despite a commitment from Eric Pickles in December 2011 to reduce the inequality. The most recent provisional settlement instead cuts support for rural councils relative to that given to urban, widening the gap between the two, and further disadvantaging rural people.

As a Parliamentary Patron of the Rural Fair Share campaign, Peter, along with other MPs, is calling on the government to do two things:

• First, to amend the provisional settlement so that there is a modest reduction in the gap between rural and urban councils in the coming year;

• Second, for the Secretary of State to set out a plan to close the funding gap between rural and urban councils to no more than 40% by 2020.

Peter added,

“It looks to me as if the problem is the New Homes Bonus. This is supposed to incentivise local communities to accept more house building and Wychavon has been held up by the government as a role model for using the money as it was intended. But now the government seems to be saying that new Homes Bonus money counts as part of a council’s overall spending power and implying it should be used to fund core services. That’s why I’ve asked a series of parliamentary questions about the government’s plans. If they’ve changed the role of the Bonus, they must be honest about it so councils can plan sensibly.”

The Chairman of the Rural Fair Share Campaign, Graham Stuart MP (Conservative, Beverley and Holderness) said:

“Overall, rural residents earn less, on average, than those in cities, pay council tax which is £75 higher per head but see urban areas receive government grants 50% higher per head than those in the countryside. This means people in rural areas earn less, pay higher council tax and then receive substantially less support for services.

“We are not arguing for more government spending overall but for fair allocations within the spending envelope. When money is tight it is more important, rather than less important, for funding allocations to be fair.

“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.”

Commenting Peter said,

“This is a very important issue to the people in my constituency and it is essential that the government gets the new financial settlement right.

“Rural councils have been underfunded for too long and I will continue to press for a fair deal for my constituency.”


Notes to Editors
The Rural Fair Share Campaign brings together Members of Parliament and Peers, on a cross-party basis, along with organisations, community groups, and individuals concerned about the welfare of rural communities, in order to work towards fairer funding settlements that better reflect real needs. The Rural Fair Share Campaign supports impartial, objective, needs based policy which is equitable to all.

After assessment of the provisional 2013/14 local government finance settlement, the Rural Services Network calculated that:

• Predominantly rural local authorities will see an average 5.4% reduction in formula funding compared to a 3.5% reduction for urban authorities.
• The extra funding per head for urban areas compared to rural ones will therefore increase to 52% from 50% in 2012/13
• Whichever rational method of analysing the settlement is selected, urban areas have fared better than rural ones.

These figures are based on analysis of DCLG’s own data.

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