Local Government Finance (Rural Authorities)

Annette Brooke Excerpts

Monday 11th February 2013 Commons Chamber

[Neil Parish]

Again, one of my hon. Friends raises a good point, because this has been going on for a long time. It went on under the previous Government and, dare I say, probably went on slightly under the previous Conservative Government. In those days, I was in local government. Savings were made and we cut our cloth accordingly, but along came the Government saying, “You have been so careful with your spending that you can now cut it some more.” I wonder whether central Government recognise those authorities, such as Devon and others, that have spent money wisely and made savings, yet are asked to make further reductions. The Minister is extremely concerned to make this fair, but we need not only to talk about it, but to sort it out.

Let us consider, for instance, the amount raised in council tax. Rural authorities such as Mid Devon and East Devon, which I represent, will raise in council tax nearly twice as much as, say, a local authority such as Greenwich. Therefore, rural populations are not only not getting a fair share of grant, but have to fund much more of local government spending from council tax.

The Government spend a lot of time talking about the overall spending power of a council, but I would argue that it is how we get to that spending power that matters. If we are asking our local residents and council tax payers to provide much more of that spend via their council tax than those in urban authorities do, we in the countryside are being over-taxed and, dare I say, urban authorities are being slightly under-taxed. We were told last year that that would be put right.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

Will my hon. Friend consider the fact that the higher council tax paid by many rural authorities is a reflection of the increased cost of service delivery? It is hardly likely to be due to inefficiencies.

[Neil Parish]

Yes. My hon. Friend makes a good point, because there is an extra cost in delivering services in rural areas and rural authorities. However, whatever the cost of delivering a service, we cannot get away from the inequality in how much is given in Government grant to rural authorities compared to urban. I expected and still expect—I have great expectations of the Minister and of the coalition Government—the promise of equal shares for rural authorities to be delivered on.

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[Annette Brooke (Mid Dorset and North Poole) (LD)]

I shall be brief. My constituency has four principal authorities, with a mix of urban and rural that makes life quite difficult. In any event, I see clearly the concerns of Purbeck district council, part of which lies in my constituency. It is obvious that rural councils will be subject to extra costs when delivering services, but the question is, “How much extra cost?”

I would like to make a plea for some work to be done on this question. Presumably, there was some work done on it, because originally the local government settlement was looking most promising, with some consideration given to increasing funding in relation to sparsity, which was excellent. But then along came damping, followed by the £8.5 million grant, which is positive, but for one year only. I want some transparency. What is the deficit? If we knew that, and we could all see what the position was, people would feel happier. Hearing about 1% and 2%, or that rural councils are really better off, is confusing. Why cannot we have a clear, pat answer —the position is this, because of that. I do not see that that should be beyond the bounds of possibility.

While the average awarded in Government grant per head of population last year was £487, or £324 for rural areas, Purbeck received only £215 per head. Average council tax in England is £398, but in Purbeck it is £594. Everything is exaggerated as we go through the figures. The pre-damping figure for Purbeck was £295,000, but post-damping it is £121,000. Surprise, surprise, when we get the share of the £8.5 million grant, it is a mere £6,879 for Purbeck, which will not give a great deal of scope for finding more efficiencies, if indeed there is any more to do.

We have a problem. We have reduced local government expenditure and they have implemented so many cuts. We have the battle between the councils, but we can only be sure that we are getting the best deal for our residents if we have total transparency and figures provided to us that actually explain the situation rather than blurring it.