Local Government Finance

Sarah Dyke Excerpts

Wednesday 5th February 2025 Commons Chamber

[Sarah Dyke (Glastonbury and Somerton) (LD)]

I start by drawing Members’ attention to my role as the chair of the all-party parliamentary group on rural services. The APPG is very concerned about the impact this settlement will have on rural local authorities and their ability to provide for their residents. It costs more money to provide services in rural areas, due to a number of factors including low population density, poor connectivity and larger distances to travel, but these facts are not reflected in the funding formula. Analysis by the Rural Services Network has shown that urban councils receive 41% more per head than rural councils in Government-funded spending power. Residents in rural areas now also pay an average of 20% more in council tax than urban residents do.

The removal of the rural services delivery grant, which provided rural local authorities with £110 million extra to deliver essential public services last year, will force rural councils to make yet more difficult financial decisions in order to be able to continue to provide vital frontline services to their residents. The consultation stated that this grant failed to account properly for rural need, and that funding must be allocated more effectively. However, the Government have failed to follow up on this. Instead, they have removed it a year early, with no published evidence for its removal. That means that rural councils will have the lowest increase in core spending power between 2024-25 and 2025-26.

It is disappointing that the new recovery grant will be allocated mainly to urban councils. We have heard about this from Members across the House today, and I certainly do not want to make this an urban/rural debate, but the Government must accept that there is real rural deprivation and that the continued underfunding of rural councils will have a negative impact on people’s lives. My constituency of Glastonbury and Somerton is an example of this. Glastonbury Central is in the 20 most deprived neighbourhoods in England, and a third of households in Street experience deprivation in at least one dimension, according to the 2021 census.

Is it fair that, because residents live in a rural area, they will have to pay more for less? Let us take home-to-school transport as an example. Research by the County Councils Network from 2018 shows that the average cost per head for home-to-school transport is a whopping £93 per child in rural areas, compared with just £10 per child in cities and towns. School transport for children with SEND cost Somerset council £11.6 million in 2023, a 157% increase on 2018. The council operates 283 routes a day for children with SEND. As the council is rural, those routes are many miles long, so they take longer and are much more expensive than those in urban environments —in some cases, costing £1,650 per pupil per week.

Or take Somerset’s increased risk of devastating flooding. Somerset council is the lead local flood authority and is responsible for managing the flood risk from ordinary watercourses, yet it does not have sufficient staffing capacity to deal effectively with the constant risks we face. Somerset is so often at the forefront of flooding and climate change.

Only last week, Somerset suffered immense flooding that forced more than 100 residents of the Primrose Hill residential park in Charlton Adam near Somerton to be evacuated into emergency accommodation. Martock, Blackford, Yeovilton, Podimore, Cary Fitzpaine, Mudford and Bridgehampton also suffered as a result of the flooding, with some residents completely cut off and unable to get to work, school or medical appointments. I tried to visit some of these communities a week ago on Monday and could not get there, so people certainly could not get out.

The lack of investment and proper repairs and maintenance by the previous Conservative-led county council has left the infrastructure fragile and unable to cope. Gullies and ditches are blocked, while culverts and drains have collapsed and are also blocked.

The funding model for local authorities is broken, and Somerset council, like many others, faces increased costs for social care and SEND provision. As a result, investment is put on hold while budgets for other areas of council work come under increasing pressure. Councils like Somerset, which face huge pressure from increased flooding, need ringfenced funding allocations to manage that flood risk, as council budgets simply cannot cope.

I am afraid that this financial settlement will fail to help rural authorities such as Somerset cope with the increased challenges and demands. The Government must recognise the added pressure that rural areas face, and this must be reflected in any financial settlement.