PRESS RELEASE
For immediate release

Friday 22 January 2015

‘Disastrous’ government grant proposals beggar belief and must be rethought, says Rural Services Network

Rural residents face an unwelcome hike in council tax coupled with much reduced services if the government pushes ahead with a proposed funding settlement for rural communities - despite an increase in the Rural Services Delivery Grant.

The Rural Services Network [1], which represents local councils and other services providers, outlined its massive concerns as the government prepares to decide how much grant funding to allocate local authorities following provisional announcements.

Rural local authorities would be very heavily penalised by a proposed shift in grant from shire areas to metropolitan areas, said the Network [2].

Network chief executive Graham Biggs MBE said already cash-strapped local rural councils would face the prospect of being forced to increase council tax to a level much more than their urban counterparts - and even then having to undertake swingeing service cuts.

Proposed changes to the funding formula had been applied unevenly and at the last minute by the government, and without any forewarning, had the effect of further penalising rural areas, said Mr Biggs.

Mr Biggs said: "Yet again, rural areas, which already have higher council tax levels than urban areas and a lower average local income, will be caned to allow urban areas to maintain more government grant."

Mr Biggs said council tax was already significantly higher in rural areas compared to urban because of historic underfunding of rural services by successive governments.

Yet despite this, the current government was again choosing to favour urban people at the expense of those living in rural areas [3].

Mr Biggs said it was unthinkable that a Government which had indicated understanding of the rural situation was now planning to further increase the gap in government funding between urban and rural areas.

"The move beggars belief," said Mr Biggs.

"Cuts in grant have been difficult to live with for five years but they have been similar percentage reductions across rural and urban areas," he added.

"Now out of nowhere come proposals that will decimate rural services while urban areas get a much lesser level of grant reduction.”

Mr Biggs added: "To compound the situation still further, government ministers assume in their figures that rural residents will have to pay even more in council tax than their urban counterparts. It is astounding."

Rural local authorities have called on the government to reconsider its proposals before MPs vote on the final settlement in February.

The Rural Services Network agrees with the leader of the County Councils Network and others who say this proposed settlement if enacted can only produce huge cutbacks in services in rural areas.

- Ends -

MEDIA CONTACTS:

Graham Biggs
Rural Services Network
M: 07966 790197
E: graham.biggs@sparse.gov.uk

NOTES FOR EDITORS:

1) The Rural Services Network is a group of more than 200 organisations working together to improve the delivery of rural services across England. The two operating arms of the network are the Sparsity Partnership for Authorities Delivering Rural Services (SPARSE) and the Rural Services Partnership. Further information and a full list of members are available at http://www.rsnonline.org.uk.

2) The full response to the funding proposals is contained in the Rural Services Network's submission to a government consultation on the issue which can be seen at https://www.gov.uk/government/consultations/provisional-local-government-finance-settlement-2016-to-2017-and-an-offer-to-councils-for-future-years

The network's full response to the consultation is at http://www.rsnonline.org.uk/images/files/SPARSE-Response-to-2016-17-Provisional-Settlement.doc

3) The network has calculated that urban councils already receive around 45% more funding per resident than their urban counterparts. At the same time, rural residents pay on average £81 per head more in council tax than their urban counterparts.

ENDS.