PRESS RELEASE
For immediate release

Friday 13 February 2015

The Rural Services Network [1] has welcomed a £4m increase in government funding for local authorities working with countryside communities but warned that it makes little difference to the financial injustice which rural authorities have suffered for years.

The network has warned that not all rural councils would even benefit from this small increase which failed yet again to recognise the fundamentally higher cost of delivering public services outside towns and cities.

The £4m funding increase announced by local government minister Kris Hopkins takes the Rural Services Delivery Grant to £15.5m [2]. But it benefits only the most rural councils and is a small fraction of the money DCLG recognised was due to rural areas in 2012/13 but subsequently froze.

RSN chair Cecilia Motley said: “This equates to about £1.20 per person for rural authorities and does little to significantly close the gap between rural and urban authorities funding.”
 
Rural residents continue to pay more council tax each than their urban counterparts – yet receive fewer public services in return, according to Rural Services Network calculations [3].
 
Councillor Motley said the government had done little to rectify matters - despite having acknowledged as long ago as 2012 that rural areas were comparatively under-funded [4].
 
She added: “We will be writing to local government minister Kris Hopkins to stress our disappointment and to ask for a clear direction of travel for rural authorities in the future.”
 
Councillor Motley said the government's 2012 proposals would have been worth more than £200m per annum and benefitted 170 authorities had they been fully implemented.
 
She said: “We will continue to campaign on behalf of rural authorities and reiterate our manifesto call to the next government to implement the proposals in full.
 
“The whole amounts exemplified should flow through to the 170 councils and fire authorities concerned.
 
“This should be implemented through annual increases to 2020, at the latest, either by changes to the formulae or by extending Rural Services Delivery Grant to benefit all 170 authorities.”

Media contact:

Cecilia Motley
Rural Services Network
M: 07850 583083
E: Cecilia.Motley@shropshire.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) Kris Hopkins MP, Hansard, 10 February 2015: “We continue to recognise the challenges faced by rural communities. Through consecutive settlements, we have helped address the gap in urban/rural spending power. We expect the gap to continue to close. In the meantime, the settlement confirms another year of additional resources for the most rural authorities to recognise the challenges they face in delivering services. For 2015-16, in direct response to Members of all parties, we have increased the grant to £15.5 million.”
See: http://www.publications.parliament.uk/pa/cm201415/cmhansrd/cm150210/debtext/150210-0002.htm#column_665
 
3) Rural Services Network calculations show that urban residents will now receive £153 more funding per head than rural residents – even though rural residents, on average, pay more council tax.
 
4) In its 2012 Business Rates Reform Technical Consultation, the government accepted, based on available evidence, that a correction to the judgemental sparsity top-up was warranted in some parts of the formulae. It exemplified the effect of proposed changes as benefitting 170 authorities to the tune of £200+ million per annum. These changes were introduced, but due to damping and other changes, 77% of this financial betterment was lost. As the government was seeking to right an historic wrong, the Rural Services Network believes it is unjustifiable that the pre-damped amounts exemplified have not flowed through to the 170 councils and fire authorities concerned.
 
5). The Rural Services Network seeks to establish best practice across the spectrum of rural service provision. The network has representation across the complete range of rural services, including local authorities, public bodies, businesses, charities and voluntary groups. We are devoted to safeguarding and improving services in rural communities across England. We are the only national network specifically focusing on this vital aspect of rural life.

6) The Rural Services Network exists to ensure services delivered to the communities of predominantly and significantly rural England are as strong and as effective as possible. The term 'predominately rural' refers to counties and Local Authority districts with at least 50 percent of their population living in rural settlements (ie. rural towns, villages, hamlets and dispersed dwellings) as identified in the Office for National Statistics' rural definition, and including larger market towns as identified in the Defra classification of Local Authority districts. The term 'significant rural' refers to those Local Authorities who are between 25% and 50% rural under the same classification. The rural definition and classification were devised by the Rural Evidence Research Centre (RERC) at Birkbeck College.