Rural Councils: Funding

Tim Farron Excerpts

Wednesday 29th November 2023 Westminster Hall

[Tim Farron (Westmorland and Lonsdale) (LD)]

It is an absolute honour to serve under your stewardship this morning, Mrs Latham. I pay tribute to the hon. Member for West Dorset (Chris Loder), who made a very good speech. It is great that he introduced this topic for us to coalesce around, although I will say something that right hon. and hon. Members might not like to hear: I have analysed the 6,366 words that the Chancellor used in his autumn statement last week, and not a single one of them was the word “rural”. That might be an accidental and pedantic omission, or it might tell us more than the Chancellor intended. It certainly rings bells with rural communities in Westmorland, who feel ignored and taken for granted.

I want to make two or three quick points about the formula for funding rural councils. First, authorities such as mine are inadequately funded to take account of the number of temporary residents in our communities. Some 227,000 people live in the area administered by Westmorland and Furness Council, and we have something like 20 million visitors to the lakes and dales every year. Some stay overnight, but most come as day visitors. The pressure they put on the roads and other parts of our infrastructure is significant. Every single one of them is welcome, but it seems wrong that we are not in any way compensated, particularly with highways funding, to acknowledge the fact that we are the biggest visitor destination in the country outside London. I congratulate the council on doing its job and making a methodical, good effort to tackle the state of our roads, but it is not fair that it is not funded for the people who visit.

Secondly, others have mentioned sparsity. I have a mere 130 schools in my constituency, unlike my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone), but they cover a huge area, with many primary schools with fewer than 20 children and many high schools with fewer than 200. Of course it is more expensive to provide services in such dispersed areas, and sparsity is not a sufficient part of the funding formula. All that is against the backdrop of unfair funding for rural councils in general. On average, a person living in a rural community such as mine receives £105 less in central Government funding than their urban counterpart, and pays £104 more in council tax.

I want to make two points about second homes. First, the people who are lucky and well off enough to have a second home in a community such as mine can come and buy a home in Ambleside, Grasmere or Appleby, and they may turn it into a holiday let for a few weeks a year. They can therefore not pay any council tax, and because they are a small business they pay no business tax either. That means that people on very low incomes in Appleby, Kendal, Ambleside, Windermere and so on are subsidising wealthy people to have a second, third, fourth or fifth home in our communities.

I am pleased that the Government have said that they will allow councils to double council tax for second homes. That is good news. Westmorland and Furness Council reckons that will bring in an extra £10 million to help local residents. The council, which plans to start this scheme in April, has done its duty by giving second home owners the necessary 12 months’ notice. My question is: have the Government got their house in order? Will they be permitting councils to double tax on second homes from April 2024? If they fail to do that, will they compensate the councils that were planning to make use of this new and welcome power?

Let us talk briefly about social care. Rural councils get an average of 14% less funding for social care than urban councils. However, in many rural areas—certainly mine—the number of older people who require that care is much greater. The average age of my constituents is 10 years above the national average. Our area also has a complete crisis in affordable housing for both private and social rented homes, with average house prices about 12 times the average wages. So where do the workforce live? As a consequence of the housing crisis and our older population, we have a serious care crisis in our area. Earlier this year, 32% of our hospital beds were occupied by people who were fit to leave hospital but could not receive a care package. Why? Because there are not enough homes for the people who work in social care. We are not paying those people enough money. The Government have made promises before but have failed to act, letting down our old people and our rural communities.

Let us talk briefly about transport poverty, which is a huge issue that we all have in common in our rural communities. The £2 bus fare is very welcome, but it is of no use whatsoever if we have no bus. We need to fund our younger people to get them into further education—sixth forms and apprenticeship posts—but we need to make sure that there are working buses to do that. One reason that is not the case now is that the Government have not devolved the powers that they devolve to urban areas to rural ones. Why will they not allow communities like ours to have full devolution so we can have our own bus companies and fund rural bus services? They will only allow that for urban areas that have a Mayor, and that is disadvantaging rural communities. I hope the Minister will answer that.