Stuart Anderson MP in Calls for More Council Support as Ministers Publish Funding Allocations
Stuart Anderson MP has scorned Ministers for not heeding his calls to significantly increase funding available to rural councils. He was responded to the Final Local Government Finance Settlement, which was published on 3rd February 2025.
While the headline figure shows an increase of £1.2 million in the settlement funding assessment compared to last year, Stuart has said compensation for April's hike in employer's National Insurance Contributions (NICs) at £2.5 million more than wipes this increase out.
In addition, the council is not receiving extra funding for wage increases set to take place from April. At the Autumn Budget, Ministers confirmed a 6.7% increase to the National Living Wage, which will cost organisations £1,400 per employee.
The National Minimum Wage for 18-20-year-olds is also set to increase by £1.40 to £10.00 per hour - costing organisations that employ younger workers such as those operating in the social care sector up to £2,500 a year.
The Rural Services Delivery Grant has also been scrapped, despite repeated calls Stuart had made to the contrary. Last year, it equipped Shropshire Council with almost £9 million to deliver its services.
It has been replaced by a new 'Recovery Grant', which the government has promised "will help support places in most need." Yet, it disproportionately favours urban areas. This means that rural areas will receive just 3% (or £18 million) of the £600 million investment it makes available.
The new formula has been criticised by the County Councils Network, which said deprivation is just one reason council's costs are high. Their evidence shows that demand across social care and special education needs are the "main reasons."
In its press release, the government said: "No council will see a reduction" in its funding. However, Stuart has said that the settlement creates a deficit of more than £10 million for Shropshire Council if the removal of the Rural Services Delivery Grant is taken together with the increase on NICs.
Deputy Prime Minister Angela Rayner told MPs in a written statement: "it will be for individual councils to take final decisions on setting council tax in their areas, having reached agreement locally that the increases are necessary to the council's financial recovery."
However, Stuart has said the government has placed Shropshire in an "impossible situation." This is because most of the funding increase relies on councils increasing council taxes by the "maximum allowable level" of 5%.
Stuart has said that this would hit residents in rural areas the most - "another sign", he added, of the "government neglecting rural areas". If the Council uses the full flexibility, families across Shropshire will face an extra £109.
He has added that the settlement contradicts the government's pledge not to raise taxes on working people. Last year, the previous government had provided an extra £100 million in recognition of the challenges faced by rural councils.
More than four in five rural councils say they are in a worse position than before the Autumn Budget and this Financial Settlement, according to the County Councils Network. One third add that their service reductions next year will now need to be "severe."
Shropshire Council is weighing up its options after a consultation on its spending priorities closed on 26th January 2025. In its consultation document, the Council had stated that public feedback would be considered alongside the finalised "total settlement amount."
Stuart said that it is not the end of the conversation about what the government can do to support rural councils, as he will continue to make representations to Ministers during the Spending Review and the wider review of how local government is financed.
Stuart Anderson MP said:
"The Local Government Finance Settlement is another sign of the government neglecting the needs of rural areas. While the headline figure shows an increase of £1.2 million increase in assessment funding for Shropshire Council, compensation for the hike in employer’s National Insurance Contributions at £2.5 million more than wipes this increase out. The rural services delivery grant has also not been continued despite repeated calls I had made, resulting in a deficit of around £10 million. Most of the increase also relies on a full 5% increase in council tax, contradicting the government's pledge not to raise taxes on working people. The council tax increase will hit residents in rural areas the most, as they will pay more for local services. It reflects the government's failure to adequately increase funding for rural councils."
