Our work on Local Government Finance is split into two areas, the Fairer Funding campaign and a financial analysis of local authority budgets.
Did you know that:
Put simply, rural communities are paying more for less provision in their local areas.
The Rural Fair Share Group is a grouping of parliamentarians who have come together to argue for fairer funding for services across rural England. The Secretary of the Group is Graham Stuart MP.
Below is an analysis provided to local authorities and rural MPs in January 2014 which illustrates the current rural to urban divide in the financial settlement 2014:
- Local Government Finance Settlement Analysis
Future areas of work:
We provide a range of analysis for local authorities, considering their individual RA position (revenue estimate) and RO position (Revenue Outturn) compared with other authorities and groups of authorities:
"Because we are listening, we are going to do more to support rural areas and manage the extra costs of delivering services in those areas."
Brandon Lewis, Local Government Secretary on announcing the 2013/14 local government settlement on 13 February 2013
Working with our Members and by supporting an influential cross party group of MPs, the Rural Services Network has had a positive impact for rural areas in the 2013/14 Local Government Settlement.
What has been achieved?
• A significant boost to the needs assessment of rural authorities by the increase in the sparsity weightings in a number of the formulae
• The introduction of a special grant for ‘Efficiency Support for Services in Sparse Areas (ESSSA)’ which benefits some of the most sparsely populated local authorities
• A series of acknowledgements by the Government that more needs to be done to support rural authorities and an invitation from Brandon Lewis to further discuss rural funding in 2014/15
• A commitment by the Rural Fair Shares Group of over 50 rural MPs to continue to campaign for fairer funding in rural areas
How did this change local authority funding in rural areas?
We acknowledge that other formula changes, particularly damping, and the overall reduction in Government funding reversed a good proportion of the significant gains arising from changes to sparsity weightings in the formula. We believe that by bringing this to the Government’s attention (as well as the media) following the provisional settlement contributed to the development of the ESSSA grant.
It is fair to say that without the changes made to sparsity in the formula, rural authorities would have fared a great deal worse in the 2013/14 settlement. However, we feel that the changes in 2013/14 were insufficient to bridge the gap between rural and urban funding and this is why we aim to build upon our work and our relationship with Members and their rural MPs to further influence Government thinking over the next year.
Click here to see a technical analysis of the changes to formula grant and the gains from increases to sparsity weightings.
What happens next?
We intend to take up the invitation issued by Brandon Lewis to prove our case. Over the next year we will:
• Write to Brandon Lewis to set out our solution for reducing the gap between urban and rural funding by ten percentage points over the next six years with a view to meeting Ministers and officials from DCLG
• Support the Rural Fair Shares Campaign chaired by Graham Stuart MP in their own meetings with the Department for Communities and Local Government
• Provide all Members with a view of the 2014/15 settlement and the shortfall in funding when compared with their nearest urban neighbour
• Start to consider the impact of the Localised Business Rates system
To help with responding and reacting to the Annual Settlement consultation and to discuss key issues which are challenging Local Authority finance officers we are providing 8 free finance seminars in January 2014.
We hope to make this a part of our annual service to members.View items...
1) Self Sufficient Local Government: 100% Business Rate Retention
"This consultation seeks views on the government's commitment to allow local government to retain 100% of the business rates that they raise locally. Specifically this consultation seeks to identify some of the issues that should be kept in mind when designing the reforms."
The deadline for responses to this consultation is Monday 26th September 2016 and we would urge all local authorities to consider the contents of the consultation paper and ensure that they respond.
2) Fair Funding Review: Call for evidence on Needs and Redistribution
"The government has announced it will undertake a fair funding review of what the needs assessment formula should be following the implementation of 100% business rates retention. As a first step, alongside this consultation, the government has issued a call for evidence which sets out the key questions that will need to be addressed as part of this review."
This call for evidence includes key questions on the types of formula that should be considered and also the damping process. The deadline for responses is 26 September 2016.