Rural Communities: Government Support

Debate between Caroline Voaden and John Lamont

Wednesday 12th March 2025 Westminster Hall

[Caroline Voaden]

I absolutely agree with my hon. Friend, and I will come on to the delivery of services and the costs later on.

Higher than average house prices coupled with lower than average wages is a toxic combination. The median full-time salary in South Devon is significantly below the national average, but the average house price—at £337,185 —is significantly above the national average. Newly built homes regularly go on the market for around £1 million. That means the house price to full-time salary ratio in Devon is 10:6, well above the English average of 8:7. Devon as a whole has the highest ratio in the south-west.

On top of all that, we must also look at the issue of deprivation. Deprivation in rural areas tends to be dispersed, which means it is much less well identified. However, south-west England is one of the rural areas where deprivation is more prevalent. In small communities, just one or two very wealthy residents can skew the figures for the whole settlement, meaning pockets of deprivation can be even more hidden. The index of multiple deprivation, used to capture need for core local authority services, is a relative measure of deprivation based on data from 2019. The index is urban centric and it misses small, dispersed rural pockets of acute deprivation. It is simply not specific enough to capture need—especially in social care.

In Devon, most sub-domains are less deprived than the national average. However, Devon is considerably more deprived compared to the national profile, when looking at housing quality and barriers to housing and services. Of the total Devon population, 47% fall into the most-deprived fifth nationally for the indoor environment quality measure. In rural areas, one in four households do not have a mains gas supply, and are more likely to be reliant on oil or solid fuels for domestic heating, which are less efficient and more expensive.

In 2022, the average fuel poverty in rural villages, hamlets and isolated dwellings was nearly three times as high as the average for England as a whole, and 25% of the Devon population were also in the most deprived fifth nationally for the housing services sector, which measures distance from services such as GPs, food shops, post offices and primary schools, along with measures of housing overcrowding and affordability and homelessness. It is not all thatched cottages from the front of chocolate boxes.

The Liberal Democrats are concerned that using deprivation as an indicator of demand for services does not consider local authorities with a higher number of elderly or vulnerable residents, and the additional demands those residents place on our services. Under the previous Government, DEFRA and the then Department for Levelling Up, Housing and Communities commissioned a piece of work to investigate rural deprivation as part of an update to the English indices of deprivation. It was anticipated to complete this year, so I ask the Minister for an update on when this work will be completed and published.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

The hon. Lady is making an excellent speech about the challenges that her constituents in South Devon are facing. Many of those challenges are similar to those in my own constituency in the Scottish Borders. Does she agree that all decision makers, whether in the Government, the Scottish Government, local authorities or banks, need to do much more rural-proofing of their policymaking process? Before they announce these policies, they need to understand more clearly the impact they will have on those in constituencies such as the hon. Lady’s and my own in the Borders.

[Caroline Voaden]

The hon. Member’s point comes back to what I am saying about having people at the top table who really understand how these economies work, because so often those smaller communities are lost under the larger voice of the big cities.

In peripheral rural and coastal communities, which have higher levels of high occupational risk groups—for example, farmers and vets—social isolation and loneliness is a cause for concern, with higher levels of suicide and self-harm admissions and lower levels of referral to psychological therapies.

Rural isolation is particularly acute for older people who do not drive. With every pub, café or post office that closes, the opportunity to socialise with others, or even just have a conversation, disappears. It is also damaging for younger people; rural living means fewer opportunities for leisure, sport, socialising and part-time work, embedding disadvantage through a lack of opportunity to gain vital employment skills.

That all sets the scene for the challenges of living in and providing services to rural areas, and I am sure that colleagues will elaborate on many of them, such as buses, banks and broadband, but I would like to finish by looking at funding, because that has a real-world impact on rural communities such as mine, and the figures are—quite frankly—shocking.

Under the 2025-26 local government finance settlement, Government-funded spending power in predominantly urban areas will be £573 per head, compared with £407 in predominantly rural areas. Urban councils will get a huge 41% more per head than rural councils. Over 10,000 people, that equates to £1.66 million a year. Council tax per head will, on average, be 20% higher in rural areas than in urban areas. And, now, predominantly urban areas are to receive over seven times more of the proposed £600 million recovery grant than predominantly rural areas.

Last week, the Government announced continued funding for the rural England prosperity fund, with up to £33 million directed to the fund to

“improve local infrastructure and essential services that benefit rural communities and help businesses…to expand, creating jobs and kickstarting the rural economy.”

From 2023 to 2025, that fund was £110 million, so, while £33 million is welcome, it does equate to a 36% cut in annual funding.

We welcome DEFRA’s announcement of up to £5 million to go towards the continuation of important services for rural communities, such as capital funding for the refurbishment and development of much-needed community-owned assets, such as village halls and community centres. I have seen several of these projects in my own patch, with upgraded community centres doing vital work in bringing the community together.

However, the Liberal Democrats are concerned by the Government’s decision to allocate additional funding within the local government finance settlement on a need and demand basis. The new system of allocation will not recognise that the sparse and isolated nature of rural areas drives higher costs for the delivery of essential services, creates challenges in recruitment of staff for key services, and requires local authorities to provide a greater subsidy for the provision of public transport. We know that the challenges of recruitment are having a direct impact on inward investment into rural areas, because companies who want to invest in South Devon are anxious about doing so because they know that workers cannot afford houses in the area, so where will the workforce come from?

Likewise, the Government’s suggestion is that funding previously allocated to rural local authorities under the rural services delivery grant will be repurposed under the need and demand basis that jeopardises rural local authority funding. That is despite the grant providing rural local authorities with £100 million for the roll-out of essential public services, including emergency services and the provision of social care in 2024-25. We therefore urge the Government to provide rural councils with a funding settlement that reflects the impact of the rurality and sparsity of the areas they serve, through the application of the fair funding formula.

There is a lot to unpack here, but I have secured this debate to urge the Government to think about working more across Departments, and to bring people together to really consider the impact of departmental spending decisions, not only on that Department, but on each other. How do Transport decisions affect Education, and, with it, the wider skills agenda? How do the Health decisions that are made impact the economy in a rural area? How does the closure of hospitality businesses affect rural isolation, loneliness and mental health outcomes? I could go on, but will leave it to colleagues to give examples from their constituencies to highlight many of these issues.