Unpacking the Finance Settlement for local authorities and Its Impact on Rural Services

Last week, The Rt Hon Michael Gove announced an encouraging boost for rural communities: a £15 million increase in the Rural Services Delivery Grant for 2024-25. This raises the total to £110 million, a significant uplift that the Rural Services Network has long advocated for, helping to address the funding disparities between rural and urban areas.

Historically, rural areas in England have faced a significant funding gap. Due to receiving less in Government Grant, rural councils have had to increase council tax levels to balance the budgets leaving rural residents disadvantaged and paying 20% more in council tax per head compared to urban counterparts. The provisional Local Government Finance Settlement for 2024/2025 highlighted this disparity: urban authorities were set to receive 37% more in Government Funded Spending Power per head than rural authorities.

Responding to the announcement, Kerry Booth, Chief Executive of the Rural Services Network, states:

“We welcome the additional £15 Million for Rural Services Delivery Grant and the recognition by Government of the challenges that rural councils face. We will of course continue to champion the needs of rural communities and campaign for fairer rural funding. At times of austerity, it is more, rather than less important that funds and resources are distributed fairly.”

This funding increase is a step forward, but the Rural Services Delivery Grant only goes to a selected number of local authorities using a formula determined by Government.  Not all rural councils are eligible for the grant, leaving some still struggling with the costs of servicing spread-out communities. The additional funds do no not resolve the historical underfunding of rural councils.

Last year urban councils budgeted to spend double that of rural councils on discretionary services, leaving areas like public transport and economic development struggling for funding in rural areas, and their communities disadvantaged.

The Rural Services Network remains committed to advocating for fairer funding across rural England. The network and its members will continue to work towards equitable distribution of resources, ensuring that rural areas are not overlooked in times of economic challenges.

The increase in the Rural Services Delivery Grant for 2024/25 is a positive development for rural communities, reflecting a recognition of their unique challenges. However, the journey towards truly fair funding for rural areas is ongoing, with the Rural Services Network at the forefront of this advocacy. Ensuring equitable service delivery across England’s diverse landscapes remains a priority.

This statement by Rt Hon Michael Gove will be followed by the full details of the final settlement in the coming weeks, and the Rural Services Network will be closely exploring the detail of the settlement to understand the true impact for rural communities.

Read the Government Statement in Full Here


Sign up to our newsletter to receive all the latest news and updates.