Stuart Anderson MP has urged the government to "rethink" planned changes to local government funding. The government is proposing to "repurpose" a grant which had allocated almost £100 million to rural councils in recognition of the extra challenges they face serving remote communities like South Shropshire.
The change was announced in a policy statement published by the government on Thursday, 28th November 2024. It included the decision to "redistribute" funding which had been usually dedicated for rural councils, with little detail about how the gaps it opens will be filled.
The Rural Services Delivery Grant had invested more than £100 million in rural councils during 2024/25. Introduced in 2013/2014, it recognised the added pressures of delivering council services in rural areas - such as the higher volume of fuel used in refuse collection. This year, it equipped Shropshire Council with almost £9 million (£8,982,153.)
In its statement, the government announced that it would be "redirecting as much funding as possible" through a one-off recovery grant, which would be weighted exclusively by "deprivation", so it is heavily targeted towards "places with greater need and demand for services."
The Rural Services Network has stated: "Using deprivation as an indicator of demand for services, does not consider the ageing population and the additional demands that demographic place on services, for example in rural areas, over a quarter of the population is aged 65 and over compared with around a sixth of the urban population."
The document adds that "places with a significant rural population" can still expect a 5% average uplift in core spending power. However, this is only the case if they make use of the 5% council tax increase.
It means that bills could soar by up to £110 next year for residents, although the government had previously promised not to increase it by a "single penny." Council tax in rural areas already stands at an average of 20% more per head than in urban areas.
Stuart has said that the government's "broken promise" would hit families and pensioners the hardest - as they are already feeling the impact of the tax hike on jobs. He added it adds to "clear evidence" that the government does not understand the extra pressures involved with delivering services in rural areas such as South Shropshire.
The announcement adds to concerns that increases to employer's National Insurance Contributions will result in increased costs on social care services, disproportionately impacting rural councils which are already drawing upon resources that had been previously invested in other services.
Stuart's intervention is is latest part of his long-term campaign to seek better and fairer funding for councils in rural areas such as Shropshire, which face unique challenges due to the influence of factors such as sparsity, distance, and remoteness.
In October, Stuart had called for an extension to both the Rural Services Delivery and the Lower Tier Services grant schemes - which the last government had introduced with extra funding in order to address rural need and support the delivery of everyday services such as homelessness, planning, recycling, and refuse collection.
Stuart hopes that the government will reconsider its approach and provide an uplift for rural councils in the local government finance settlement which does not depend on excessively hiking council tax. He added that he will be standing up for rural areas like South Shropshire when the government consults on its reforms.
Ministers stated: "the government is keen to hear from councils about how best to consider the impact of rurality on the costs of service delivery, and demand, as part of our longer term consultations on local authority funding reform." Provisional funding allocations are due to be published next month in December.
Stuart Anderson MP said:
"The new government's initial proposals on reforms to local government funding demonstrate a blatant disregard for rural communities like South Shropshire. The last government has this year equipped Shropshire Council with almost £9 million in recognition of the challenges it faces providing services in remote communities like ours. I am disappointed that Ministers have chosen to "repurpose" this grant and redistribute this funding elsewhere. The government was elected on a promise not to increase council tax, but its decisions mean that it could soar by up to £110 next year - hitting families and pensioners the hardest. With inflation already on the rise, the government must rethink its decision and deliver the funding that rural areas need."
