Stuart Anderson MP has responded to the announcement the Government has agreed to provide 30 councils, including Shropshire, with exceptional financial support for the year ahead. The extra support, known as 'in-principle capitalisation support', enables local authorities to sell assets to generate capital receipts that will cover revenue costs. It allows councils to balance their budgets. It means that Shropshire can generate an extra £26.9 million in 2025/26 to ensure the "delivery of vital public services, protecting vital community assets and promoting economic stability."
Ministers have admitted that a record number of councils have, this year, reached out to the government asking for exceptional financial support. It follows the publication of the Local Government Finance Settlement on 3rd February 2025, which confirmed a shake-up of how local councils are funded. This included the removal of the Rural Services Delivery Grant that, last year, equipped councils with an extra £100 million in light of the challenges serving rural populations.
Ahead of the publication, Stuart had urged Ministers to "rethink" their plans to stop the dedicated funding for rural councils. Introduced in 2013/14, the grant recognised the added pressures of delivering councils services in rural areas - such as the higher volume of fuel used in refuse collection. Last year, it equipped Shropshire with an extra £8.9 million. At the time, he said the proposals "demonstrate a blatant disregard for rural communities like South Shropshire."
Following the latest announcement, Stuart has now said that the unprecedented number of requests for extra financial support is "deeply worrying" and adds credence to his campaign to secure fairer funding settlements for rural councils like Shropshire. He launched his campaign in October 2024, when he called on Ministers to provide a funding uplift for rural councils. On 6th February 2025, he then called for more funding for Shropshire Council. He said that the planned increase of £1.2 million was more than wiped out by the cost of hikes in employer's National Contributions (NICs) at a level of £2.5 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 Local Government Association previously said: "additional flexibilities should not be seen as a substitute for the requirement for a long-term plan to sufficiently fund local services through multi-year settlements."
Stuart Anderson MP said:
"It is deeply concerning that a record number of councils have had to seek extra financial support from the government. It follows a massive shake up of local government funding, which has stripped rural councils of more than £100 million in direct funding. This is combined with eye-watering hikes in National Insurance that will cost an extra £800 per employee. Since October, I have written to Ministers on four different occasions to request a fairer settlement for rural areas like ours. I will continue to campaign for more equitable funding that recognises the unique challenges involved with delivering public services in remote communities like South Shropshire.”
