Philip Dunne calls for fair local government funding for rural areas

7th February 2018

Speaking in a debate on local government finance, Philip Dunne calls for changes to address the unfairness between rural and urban areas.

It is a pleasure to lead the debate from the Back Benches today, and I will start by agreeing with one point made by the hon. Member for Oldham West and Royton (Jim McMahon): his congratulations and applause for the work of local government staff up and down the country in delivering services for local residents day in, day out, with a resource base that is diminishing overall. However, I disagreed with almost everything else that he said.

The hon. Gentleman seems to have a limited recall of local government finance, which may not be his fault, as he has not been in the House for very long. Those who were Members between 1997 and 2010, under the previous Labour Administration, will recall that there was a significant shift of local government resource from rural to urban areas. The hon. Gentleman referred to a piece of research undertaken in 2014, but I encourage him to read more widely. In particular, he should look at the work done by the Rural Services Network, which has carried out considerable research into the additional cost, which it acknowledges, of the delivery of services—[Interruption.] The hon. Gentleman says from a sedentary position that that is not the evidence, but it is the evidence provided by the RSN. I should declare that I co-chair the all-party parliamentary group on rural services, which is supported by the RSN.

I do not have very long to speak—you have given us a tight time limit, Mr Speaker—so I will confine my remarks to a few points. I will give the shadow Minister one example of the unfairness, as I and other Conservative Members see it, between rural and urban areas. The proportion of spending power funded by council tax in rural areas for the coming year, 2018-19, is 69%, while the proportion of spending power funded by council tax in urban areas is 55%. The burden on council tax payers in rural areas is significantly higher, which can be illustrated by comparing almost any urban authority with any rural authority that I care to mention.

My rural authority is Shropshire, which I will compare with Coventry, an urban area not that far away that has a similar population base, Shropshire’s spending power in the provisional settlement, before the additional measures announced this week, is £1,623 per dwelling, whereas Coventry’s spending power is £1,780, so there is £157 more spending power per dwelling in Coventry. Coventry generates £21.5 million more than Shropshire, and as £21.5 million is close to 9% of Shropshire’s total spending power, it represents a significant divergence in capacity at a time when the costs of delivery in rural areas are going up disproportionately.

One of the reasons why the costs of delivery are increasing disproportionately is because of the rapid acceleration in the age profile of our residents in rural areas. I have been surprised to discover that my constituency of Ludlow now has the 11th oldest population in the country, so there are only 10 constituencies in which more than 28.2% of residents are aged over 65. The situation is leading to considerable cost pressures on the delivery of adult social care in rural areas. The cost in Shropshire is going up by roughly £10 million a year, so the increase in core spending that will result from this settlement will be more than absorbed by the increasing cost pressure on delivering services to our increasing elderly population.

I welcome the measures announced by the Secretary of State this week, and I welcome the fact that the Government will publish a Green Paper in the summer on the cost of social care. It behoves us all to get involved, and I am sure that many all-party groups and interested groups outside the House will make representations. The all-party group on rural services, which I have the pleasure of chairing, will certainly make a representation.

My final point, in my last minute, will be to welcome yesterday’s announcement of a £16 million increase in the rural services delivery grant. I am pleased that £900,000 of that will come to Shropshire to reflect the costs I have mentioned. I also welcome the extra £150 million for the adult social care support grant, on top of the £2 billion announced in the past 12 months, about which the Opposition spokesman was so grudging. This reflects the Government’s recognition of the challenge in social care, and we are doing the right thing by trying to meet that challenge.

I also welcome the announcement about the retention of capital receipts for an additional three years, which will be of great help to authorities such as Shropshire Council. I am particularly pleased that the Secretary of State confirmed in response to my earlier question that the current review will be taken forward into the spending review.

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