Funding for Local Authorities

Bob Stewart Excerpts

Thursday 10th October 2013 Commons Chamber

[Neil Parish]

I do not necessarily want to get into a debate on how the new finance will be handled. Retaining the business rates and the new homes bonus are all part of it. A system where it is shared more equally across all authorities in the future may be one answer, but I do not want to argue with all the Government’s policies. I just want them to carry on with the very sensible policies that they had. [Interruption] Did my hon. Friend the Member for Beckenham (Bob Stewart) want to intervene?

[Bob Stewart (Beckenham) (Con)]

When invited to intervene, I am delighted to do so. In the area that I represent, Beckenham in Bromley, we sometimes feel that although we are part of London, we are quite hard done by. For example, meeting the statutory requirements to 2018 will inevitably result in a £36 million deficit, so it is not easy. The metropolitan areas also have problems and there are differences between metropolitan areas. Bromley is currently very hard done by.

[Neil Parish]

rose—

--- Later in debate ---

[Neil Parish]

My hon. Friend, who asked to intervene, is right. There is a different definition in DEFRA from the one used in local government, which does not seem to recognise councils that have a large rural population and larger rural parts of their areas. Why is it that the Department for Communities and Local Government does not recognise the DEFRA definition and may come up with another one? Is it to complicate the grant system still further? It would be cynical, would it not, to suggest such a thing.

We are here to press the Secretary of State to make good on the long-standing promise to correct the historic imbalance and give rural local authorities their fair share of central Government funding, in line with the summer consultation. We call on the Government to reduce the urban funding advantage over rural areas incrementally, year on year, to no more than 40% by 2020. Closing the gap between urban and rural can be achieved within the existing resources, within the period to 2020, without placing any individual authority in a worse position than others, and it is one of the recommendations to be made to the Government by the Environment, Food and Rural Affairs Committee, of which I am a member, in its report on our inquiry into rural communities.

By reducing urban funding by an extra 0.1% per year of the £24 billion local government funding settlement, the Government can reallocate £30 million to rural authorities and reduce the funding gap from 50% to 40% by 2020. I know that this is a matter of concern across the House. I thank my hon. Friend the Member for North Devon (Sir Nick Harvey) and my hon. Friends representing Worcestershire for helping me to secure the debate today. I also thank my hon. Friend the Member for Beverley and Holderness (Mr Stuart), who chairs the rural fair share campaign—

[Bob Stewart]

He is here in spirit.

[Neil Parish]

Indeed. I thank my hon. Friend the Member for Beverley and Holderness for pursuing the issue with great vigour, for considering the issue with Ministers with such tenacity, and for helping to secure this debate, as well as for the support and information provided by the local authorities in Devon and across the country.

A quarter of England’s population live in rural communities. Providing services presents many challenges to local government. This is particularly true in rural Devon, where there are serious barriers to services, with nearly 56% of residents living in rural areas across the county and with the house price to earnings ratio well below the national average. Lower than average wages and higher house prices is a trend replicated in other rural local authorities.