The Petition of residents of Brigg and Goole constituency,
Declares that the Petitioners believe that the Local Government Finance Settlement is unfair to rural communities; notes that the Rural Penalty sees urban areas receive 50% more support per head than rural areas despite higher costs in rural service delivery; and opposes the planned freezing of this inequity in the 2013–14 settlement for six years until 2020.
The Petitioners therefore request that the House of Commons urges the Government to reduce the Rural Penalty in staged steps by at least 10% by 2020.
And the Petitioners remain, etc.—[Presented by Andrew Percy, Official Report, 23 January 2014; Vol. 574, c. 547.]
[P001316]
Observations from the Secretary of State for Communities and Local Government, received 4 April 2014:
This Government recognised that the costs associated with the delivery of services in rural areas is an important issue and have moved to address the situation left by the previous Administration. We are taking action through the changes we made in 2013-14 and this year. But we are doing this in the context of the continuing need to pay off the budget deficit inherited from the last Government in order to safeguard the economy.
Overall the 2013-14 settlement provided stability at the start of business rates retention to allow authorities to benefit from business rates growth and protected the most grant-dependent authorities, whether they are rural or urban authorities. In setting the business rates retention baseline we increased the weighting and top-ups for sparsity. We also paid £8.5 million by Section 31 grant to 95 rural local authorities in 2013-14 intended to help those authorities with the highest levels of sparsity to secure efficiencies in services. In the 2014-15 settlement the grant amount was increased to £9.5 million and rolled into the settlement, and on 12 February 2014 Ministers announced a further £2 million for this funding, bringing the total to £11.5 million for 2014-15.
Funding per head in predominantly rural areas reduces by less than in predominantly urban areas for all classes of authority in 2014-15. The urban-rural gap in spending power per head shows an even more marked narrowing from 2012-13 to 2013-14. The 2014-15 Local Government Finance Settlement sees average spending power (excluding the Greater London Authority) reduce by just 2.9%. The Government are also providing funding to help local government in England freeze council tax in 2014-15 and 2015-16. This will mean that we have helped English authorities freeze their council tax for an unprecedented five successive years.