Local Government Funding: Rural Areas

Anne Marie Morris Excerpts

Monday 11th January 2016 Commons Chamber

[Graham Stuart]

My right hon. Friend is right to say that. Not only are residents in rural areas poorer on average than those in urban areas, but it costs more to deliver services there, they have to pay higher council tax and they are also older, with all the costs that go with it—driving social care. Again and again across government and across our society, we hear about the pressures that will result from having to deal with an ageing population, yet it is rural areas that have the eldest population. However, Government Departments show no recognition of the additional costs of age, as reflected in the demographics of rural areas.

[Anne Marie Morris (Newton Abbot) (Con)]

In my constituency, 25% of the population are over 65, compared with Exeter, a neighbouring urban area, where the figure is only 15%. Many of my constituents are aged over 85, but it is a travesty that many funding provisions do not provide for that very expensive group.

[Graham Stuart]

My hon. Friend is absolutely right.

Our campaign has argued from the outset that our councils have to bear additional costs because they serve sparsely populated rural areas. Rural councils face higher transportation costs, for instance, when refuse is collected from sparsely populated villages or when children have to be transported into schools—costs that do not have to be faced in an urban setting. As my right hon. Friend the Member for East Yorkshire (Sir Greg Knight) mentioned, as we move increasingly towards the digitisation of services, we find that there are additional costs of ensuring fair access for rural residents who do not have superfast, let alone ultrafast, broadband on which they can rely.

The Government have made a welcome pledge to conduct a new needs assessment preceding the new retention of business rates regime that they are introducing. That is great to hear, but colleagues would be wise to temper their optimism about any changes that might arise. After all, in 2012, the Government carried out a needs assessment and a consultation process. Those involved in the campaign were delighted—hurrah—when proposals were made that recognised the additional costs of delivering services in a sparse area, yet the additional funding that the Government had agreed was necessary was, for the most part, “damped” away. Under the mechanism designed to minimise volatility in funding in local areas, 75% of the gains that the Government had said rural areas should receive were not delivered. This was not damping as in delay, but damping as in totally and utterly removed. That is why our campaign has been calling for the residual amount, which we have calculated to be worth £130 million a year, to be paid in full to rural authorities.