Rural Upper-tier Local Authorities

Debate between Perran Moon and Jim McMahon

Wednesday 2nd September 2026 Westminster Hall

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

It is a pleasure to serve under your chairmanship, Mrs Barker, and to hear the debate and the passion that Members have for their areas. I quite liked the county competition for the most beautiful part of England, but I am sure that we can agree that England is magnificent coast to coast, and we should all celebrate that.

I will respond to the debate in due course, but I want to start by laying out some of the differences. We are using common language for things that are very different; I think that we are conflating devolution and the powers that will be devolved with the fair funding review and the funding that goes to local authorities. In some cases, there is no clarity on what a regional authority will do to the local authority and community governance, whether that is neighbourhood governance or town and parish councils. In this debate, it has become one and the same. I do not criticise that, and I recognise why that happens. We are all here to represent places and not units of government, so we care about whether our communities are getting the resources needed.

[Perran Moon]

On that specific point, part of the reason why there is a conflation of devolution and the local government funding settlement is that, because our local councils in some areas are so deprived of funding, they have to get funding from something like a visitor levy, which would not typically be allocated for that, in order to supplement the services they need to provide. That is potentially why there is a mix-up of views about devolution and the local government settlement. Does the Minister recognise that point?

[Jim McMahon]

In a sense, I recognise that there will be differences of opinion, depending on which local authority and what part of the country Members represent, about whether the fair funding review fully picks up all the particular circumstances. There might be more agreement on the sufficiency of local government finance. Whatever the allocation across the board, the fair funding review is intended to distribute it in the fairest possible way and in a transparent way, so that Members and councillors can see where the money is going to.

Since coming to power, the Labour Government have delivered long-overdue reforms to council funding through the first multi-year local government settlement in a decade. In doing so, we have delivered transformational changes to how councils are funded, which the public, our local government partners and Parliament have long called for. We have delivered on our commitment to give councils greater certainty and flexibility over their funding, ensuring that resources are fairly aligned to local need and simplifying the funding landscape by ending wasteful competitive bidding, which we all recognise pits one area against another.

The Government also have a very important role to play as an equaliser for local government income. During the course of the debate, I heard references to the amount of grant that individual councils get, and one grant total being compared with another. I want to be clear that the fair funding review is not intended to give every council the same central Government grant. That grant is intended to act as an equaliser for the system, so that in the end all councils have the resources to deliver the public service need in their local areas, while recognising that there are wide differences in England in the local tax bases of council tax and business rates.

As a result of our reforms, nine in 10 councils will receive funding that broadly matches their assessed relative need by the end of the multi-year settlement, up by about a third before the reforms. We recognise the different drivers in demand for services, the cost of providing them in different places and the different abilities of areas to raise council tax. We are therefore making funding available in such a way as to enable all local authorities to provide the same level of services to their residents.

For rural communities, the 2026-27 settlement was a key step in delivering a fairer system to address the issues that matter to local communities across England. It included recognising local circumstances, including differences in the cost of delivering services between rural and urban areas, and using the best available and most up-to-date data, including the latest indices of multiple deprivation to ensure that deprivation in rural areas is captured accurately. I will explain a bit more on that.

I heard references to the fair funding review not taking account of the differential cost of delivering services in rural areas. To be clear, we account for rural costs through the area cost adjustment, which is applied to all formulas. That adjustment captures the variation in wages, property rates, journey times, and a range of other factors that pick up the local variation that takes place. On top of that, we have a remoteness adjustment in social care. I hear representations that say, “Hang on. If it costs more to deliver adult social care in these areas, then surely children’s services and other services such as waste collection and other things ought to be included, too.” The area cost adjustment picks up that general difference of delivering a service in those areas. There is a balance here. We want a simplified system that can be scrutinised and understood. The more we adapt and change and really drill down on that, the more complicated it becomes, the more it has to be updated and the more that changes. There is always a balance to be had between simplicity, being understood and giving certainty over the multi-year settlement, while recognising the differences at a local level.

Oral Answers to Questions

Debate between Perran Moon and Jim McMahon

Monday 14th July 2025 Commons Chamber

[Perran Moon (Camborne and Redruth) (Lab)]

Meur ras, Mr Speaker. Cornwall is desperate to access the highest level of devolution, but because of our national minority status, Cornwall cannot and will not join a mayoral combined authority. Before this House is asked to vote on a devolution Bill that discriminates against the people of Cornwall, will the Secretary of State meet me and colleagues to discuss a Cornwall-only devolution deal?

[Jim McMahon]

My hon. Friend will know that, for the right reasons, we have put a significant amount of energy and time into meeting parliamentarians from across the House to discuss those local issues. Absolutely, we will meet; that will probably be the sixth meeting that we have had with Cornish MPs on this issue. We understand, respect and are investing in the Cornish identity, but we also need to ensure that the devolution agenda moves on at pace and that every part of England can realise its full potential. I am more than happy to meet on that basis.

English Devolution

Debate between Perran Moon and Jim McMahon

Monday 16th December 2024 Commons Chamber

[Perran Moon (Camborne and Redruth) (Lab)]

I welcome the move to devolve to every corner of the United Kingdom, but in relation to the upcoming Cornish devolution discussions, what is the Minister’s vision of how the Government will put into practice the legal obligations to protect and support Cornish national minority status in the same way that minority status is protected for our Celtic cousins in Wales and Scotland?

[Jim McMahon]

I thank Members in Cornwall and the leaders in Cornwall for the discussions that we have had. I know that devolution is an issue that is strongly felt, and that identity in particular is an issue that is strongly felt. We recognise that we need to strike the right balance, so the White Paper will point to a population size that is optimal in our view—in terms of economic footprint, public service alignment and reconciling public service delivery boundaries—but we recognise that in Cornwall, as in Cumbria, we might have to take a more nuanced approach. I will be clear that our view is to have established powers related to integrated settlements and devolved powers of significance. That will come with a mayor, but of course Cornwall has agreed to a level 2 deal and in the current White Paper, that would be a foundation deal as a starter for that journey.