Government commits to fairer rural funding

The government has underlined its commitment to ensuring that rural local authorities receive a fairer share of public funding.

Communities secretary Sajid Javid said delivering the fair funding review was one of three key "measures" of the government's local government finance settlement.

The new formula would be in place by 2019/20, he said, arguing that the current formula was out of date and stating that "rural councils in particular" have "unique needs that have to be met".

The government confirmed its local authority finance settlement on Wednesday (22 February).

The fair funding review was announced last year following intense lobbying by the Rural Services Network, the County Council Network, council leaders and rural MPs.

MPs have continued to raise concerns over rural funding, directly linking their support for the latest settlement on the basis of a cast iron commitment to undertake the needs review.

Like the Rural Services Network, the County Councils Network said it strongly welcomed the renewed commitment to the needs-based fair funding review.

It said this putt an end to fears that it could potentially be watered-down and delayed beyond the start of planned business rates reforms in 2019.

The settlement was announced as representatives from the CCN, District Councils Network (DCN) and Rural Services Network met to continue their discussion on business rates retention.

The CCN, DCN and RSN agreed a number of shared principles with regard to 100% business rates retention in the lead up to the first consultation in September last year.

The CCN and DCN have been tasked by the government to provide proposals relating to the design of the system in two-tier areas, including the operation of the two-tier share.

It was agreed that the groups would focus on lobbying government and MPs on securing a fairer funding deal for county and district areas, rather than tier shares.

A CCN spokesman said: "There has been growing concern about a lack of progress on the needs-based review and ministers were potentially getting cold feet."

The spokesman said it was clear that the government had listened to the concerns of county leaders and MPs, with a full review to be completed in time for business rates implementation.

"We strongly welcome the emphasis placed by Sajid Javid on demographic and rural pressures, which are key cost-drivers that need to be considered," said the spokesman.

The government had placed responsibility for developing proposals on the two-tier share with the special interests groups and the CCN was committed to working with the DCN.

But without further analysis of the implications and details on what new responsibilities would be devolved it was not possible to start detailed negotiations at this stage.

"County and districts ultimately serve the same residents," said the spokesman.

"The first priority is uniting our voices and seizing the opportunity to address the historic underfunding of our areas through joint lobbying on the needs based review.

"CCN believe this must be focused on cost-drivers, not regression based on previous spend. We must also work closely with the DCN to make the case for the right new responsibilities.

"CCN are focused on getting the right package for the additional quantum, with a balance between meeting unfunded pressures and new powers over transport, skills and housing to drive growth locally."


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