Local Government Funding: Rural Areas

Derek Thomas Excerpts

Monday 11th January 2016 Commons Chamber

[Derek Thomas (St Ives) (Con)]

I am glad to follow my hon. Friend the Member for Wells (James Heappey), not least because the name of his constituency is easy to remember and pronounce.

Fair funding for rural areas is something we have argued for in west Cornwall for as long as I can remember. The truth is that over successive Parliaments we have received less money per person than many urban areas. Over the years, this has affected our ability to care for our elderly, educate our children, provide public transport, deliver our health services, care for people with severe learning difficulties, police our streets, invest in our infrastructure and deliver council services, including refuse collection, public toilets and maintaining rural roads. All those have suffered as a result of years and years of underfunding.

This matters because my constituency continues to have some of the most deprived communities in the country. This debate, it seems to me, has largely been a competition about what level of deprivation can be found in each constituency. What I can say for Cornwall is that we are so deprived that the whole of Europe recognises it by giving us shedloads of money to try to put it right! It is fair to say that west Cornwall and other Cornish councils probably have the most deprived areas.

[Mrs Sheryll Murray]

Does my hon. Friend acknowledge that a failure of the European scheme is purely and simply the fact that Cornwall is in the third tranche of getting a handout because we are an area of deprivation?

[Derek Thomas]

I welcome that intervention, as it raises a point that I was just about to make.

Over the years, rather than give us fair funding, Government grants and generous handouts from Brussels have attempted to address deprivation, but the reality is that unless people can plan properly for the future, get fair funding and properly invest in public services, we cannot address the issues surrounding deprivation and how to lift people out of a poor environment. We need proper funding and we need to know that it is going to be fair to help us to plan for the future.

Three things provide encouragement and convince me that we can address the challenges that a rural area such as west Cornwall faces. The first is that the Government recognise the additional costs of delivering services in more sparsely populated areas. The second is that this Government have begun to address the gap between funding in urban and rural areas. The third is that people who deliver services in Cornwall are now working hard together to a greater extent than at any previous time, and that there is the political will to bring about the necessary changes to secure good services for the future. However, the provisional local government settlement announced just before Christmas threatens that good work and has the potential to undo all the work that has been done to deal with the problem of fair funding for rural areas.

I welcome this Government’s recognition of the additional costs of delivering services in more sparsely populated areas. I welcome the extra £65 million made available through the rural services delivery grant. By the Government’s own calculations, however, that should be £130 million. The truth is that rather than close the gap in funding between urban and rural areas, the provisional Government funding settlement widens the gap over the next four years, which is a disaster for areas such as mine. Cornwall Council, which Cornish MPs met on Friday morning, has the opportunity to charge a 2% levy, but it learned that 75% of that would be taken up just to meet the commitment to the living wage. It has the power to increase council tax by 4% each year.

[Mrs Murray]

Does my hon. Friend agree that the comment from Cornwall Council was quite strange in the light of the fact that last year the Liberal Democrat/Independent-led Council put out a press release claiming to be paying its staff the living wage?

[Derek Thomas]

That does seem peculiar, but this Government have introduced a generous living wage that will give many people the opportunity to earn more money and increase household incomes.

The reality is that if we ask council tax payers to contribute an extra 4% each year, without taking into account any increases that town and parish councils might have to include, it will have a detrimental effect on one of the poorest areas of the country. For years, the Conservative-led Government and the Conservative-led Cornwall Council froze council tax, but unless this Government properly address the issue of underfunded rural areas, councils will have little choice but to increase council tax to the max. Thus my constituents, many of whom are among the poorest in the UK, will have to pay 20% more in council tax in 2020. I said earlier that Cornwall has the leaders and the political will to reform public services. However, true reform requires extra cash, not less, if councils are to improve services today and save money tomorrow.

Now is the time to give fair funding to councils such as mine, rather than increasing the gap further. I ask the Government to reconsider the settlement so that councils such as mine have the money they need to deliver the services we need, and so that they feel valued and part of the optimistic future in which we all want to share. I say to the Government: please do not leave Cornwall behind any longer.