Funding inequality threat to rural services
‘Postcode lottery’ could force councils into cuts
FUNDING INEQUALITIES mean people living in rural Yorkshire have up to £500 per head less spent on their public services a year than in London, it was claimed last night.
Leaders of England’s largest rural councils yesterday told Communities Secretary Sajid Javid that a new deal was needed for local authorities outside urban areas to avoid the need for damaging cuts to front-line services.
According to the County Councils Network, which is holding its annual conference, England’s 37 county areas received £3.2bn less than the English average, averaging £650 per person in 2017/18 for vital public services such as adult social care and bus travel.
This year, taxpayers in North Yorkshire received funding for public services worth £836 per person, while those in the East Riding saw £671 per head. In contrast, inner London saw funding of £1,190 per head and Outer London £944.
With the Budget a day away, Paul Carter, chairman of the County Councils Network and leader of Kent County Council, warned of concerns that the Government’s review of local government finance will not resolve the ‘postcode lottery’ on funding.
He said: “For too long now, the 26 million people in England’s shire counties have not received a fair share of national resources.
“This means our shire heartlands are receiving an eye-watering £3.2bn less than other parts of the country for services. This impacts on the daily lives on our residents, all whilst they unfairly subsidise services enjoyed in other parts of the country through higher council tax bills. This is outdated and chronically unfair.”
County leaders say they have little choice but to raise council tax to make up the shortfall and their residents are unfairly subsidising other parts of the country.
The warning comes after Carl Les, the leader of North Yorkshire County Council, said fairer longterm funding was needed for large rural counties and that the apparent handicap faced by rural areas was exacerbating the pressure on local services.
He said people in North Yorkshire pay almost twice as much council tax in relative terms as those in urban and London boroughs like Westminster and Camden and receive less Government funding, yet the costs tend to be higher. The county council has to save £43m from its revenue budget by 2019/20. It has made plans for £33m of savings, bringing the total to nearly £170m over the decade, representing a cut of 34 per cent in its spending power.
The authority yesterday welcomed the announcement of a Government Green Paper on adult social care next summer, meaning its leaders will be able to have their say on the “enormous pressure” it faces delivering services.
A Government spokesman said: “We’ve been clear that as part of our forthcoming Fair Funding Review we want to make sure councils – including those serving rural communities that face particular challenges – are funded taking into account their local needs and circumstances.”
Our services are threatened and under pressure like never before. Paul Carter, chairman of the County Councils Network.
AN UNDER-FIRE Philip Hammond will use tomorrow’s Budget to make a pitch for the youth vote as he unveils plans to extend rail discounts and put a halt to student loan overpayments.
The proposals, which include the creation of a new 26-30 railcard, follow sustained calls for the party to improve its offer to younger generations after June’s disastrous election campaign.
Mr Hammond has already indicated that Wednesday’s speech will contain a range of proposals to boost house-building.
During a visit to Birmingham yesterday, he joined the Prime Minister in setting out a £1.7bn plan to improve transport links between prosperous city centres and struggling suburbs.
The Chancellor’s fate is said to be hanging in the balance this week following a series of gaffes, including an interview at the weekend in which he said there were “no unemployed people”.
He also faced fierce criticism in the wake of the spring Budget after the Government was forced into an embarrassing U-turn on plans to increase National Insurance contributions for the selfemployed.
There have been growing calls for him to use this week’s speech to increase funding for the NHS amid reports that the Treasury is considering a pay rise for nurses. Yesterday he also came under pressure to increase Britain’s defence spending following an intervention by two former Conservative Defence Ministers.
Speaking to The Mirror, the former International Security Strategy Minister Sir Gerald Howarth warned that the growing threat posed by Russia and North Korea was reason to “build up our defences”. “The Chinese are basically colonising the whole of the South China Sea... we have got great uncertainty in Iran [and] we have Russia doing its level best to disrupt us... This is no time for Britain to be engaging in further defence cutbacks,” he said.
The former Secretary of State Sir Malcolm Rifkind, meanwhile, called for the UK to “punch above its weight” on defence and secu- rity. He went on to warn: “The United States is getting worried as to whether we would be able to meet all our existing Nato commitments – I don’t mean in cash terms but in military capability.”
The Chancellor’s visit to the Midlands yesterday coincided with the announcement of a £1.7bn Transforming Cities Fund and a commitment to increase spending on research and development. This included a pledge to inject an additional £2.3bn of public funds in R&D in 2021/22 in a bid to encourage greater private-sector investment.
He has also stated that the Budget will include measures to increase the supply of new homes to 300,000 a year – an area which many see as a key concern for younger voters.
However, he is expected to boost appeal to younger generations by unveiling a new railcard that would extend discounted fares to 26 to 30-year-olds. The scheme, which is set to benefit 4.5m young people, would work in a similar way to the current 16-25 card and is due to launch next spring.
He will also set out plans to in- troduce a new system for student loan repayments designed to prevent graduates from overpaying .
According to the latest figures, about 86,000 graduates paid back too much on their loan in 2015/16, with an average overpayment of £592.
This is largely down to the fact that people who opt to pay through the tax system can find themselves paying for up to 12 months longer than they should.
The Chancellor will pledge that by April 2019, HMRC and the Student Loans Company will have a system in place which will mean loan repayments will automatically stop when a borrower has fully repaid.
PHILIP HAMMOND’S Budget balancing act is already a fine one – the Chancellor needs to find a way to reduce indebtedness while investing in Britain’s public services and preparing for every conceivable Brexit eventuality.
Yet it would help if Mr Hammond’s gloom lifted for one moment and he chose to regard some of the more pressing challenges as opportunities to grow the economy rather than irritating inconveniences which he could do without.
Take the rural economy. One of the safer predictions is that farming, agriculture and countryside issues will be lucky to receive the most cursory of mentions in tomorrow’s Budget, the Government’s chance to restore some credibility.
However this is not good enough. If Mr Hammond, and others, recognised the opportunities that do exist in rural areas like North Yorkshire if the right business infrastructure was in place, and that there were sufficient affordable homes for young families, more people might live and work in the countryside.
And that, in turn, would make it easier to justify investment in those rural services which continue to be shortchanged because Government spending is still skewed so heavily in favour of metropolitan areas.
Though changes to the school funding formula have begun to tackle this imbalance, England’s 37 shire areas are still the poor relations by some £3.2bn a year according to the County Councils Network.
To put this figure in context, it means there are 26 million people who are receiving sub-standard services because they don’t live in politically favoured towns and cities. Not only is this at odds with the Government’s ‘One Nation’ mantra but the Tories have always prided themselves on being the true party of the countryside. That this can no longer be taken for granted speaks volumes about the true state of the country.