Rural Funding

I am pleased this month to welcome the new proposals from the government on rural funding. In a statement to the House of Commons on Monday 8th February, Greg Clark, Secretary of State for Communities and Local Government, set out new measures to support rural councils during the transition to full business rates retention.


The Rural Services Delivery Grant will increase from £15.5 million this year to £80.5 million next year. Ministers will also provide a £150 million a year transitional fund for the biggest losers over the next two years, £32.7 million of which will go to rural areas.


In the meantime, the Government will carry out a Fair Funding Review, which will inform the move to 100% business rates retention scheme. The new assessment will be an opportunity to highlight the particular needs of rural areas.


I am delighted that under the new proposals, Shropshire Council will receive an additional £8.5million.  This is a good start


According to research by the Rural Services Network, residents in rural areas currently pay £81 more in council tax than their urban counterparts, earn less, and yet see urban residents receive 45% more in central government funding for their council services. This is despite the fact that services in rural areas are more expensive to deliver.


The Government’s provisional settlement, set out in December, would have reduced the overall amount of central government funding for rural councils by over 31% over the four year period, whereas urban councils would only have received a 22% average cut.


I have been working closely with Graham Stuart, Member of Parliament for Beverley and Holderness and chairman of the Rural Fair Share Campaign to lobby the Government on this issue.  Whilst there is still much to do to achieve equal funding for rural areas and this is only a small step on the journey to fairer funding, I am pleased that ministers have listened to our concerns. 


MPs for rural areas are not asking for special favours; this is about basic fairness. North Shropshire constituents have the right to expect to be taxed fairly and to receive a fair amount of support for their local services.


In response to questioning from Daniel Kawczynski, the Communities Secretary Greg Clark has agreed to come to Shropshire to meet the Leader of the Council and discuss Shropshire Council’s concerns.  At the meeting, I will be making the point to him again that delivering services to sparsely populated rural areas is as complex, expensive and difficult as in urban areas, if not more so and the Government must work toward correcting the unfairness in the funding system.  I look forward to a positive outcome and will report back in due course.