MP opens debate on fairer funding for rural councils

Neil Parish opens a Parliamentary debate calling on the Government to correct the historical imbalance between urban and rural councils and give rural local authorities their fair share of central Government funding.| Parliament TVNeil Parish (Tiverton and Honiton) (Con): I beg to move,That this House has considered the matter of the local government finance settlement for rural local authorities.We have only a short time for this debate—just over an hour. We were expecting a three-hour debate, but unfortunately we have been squeezed by various statements during the day and a substantial debate on Europe. However, I am happy to take interventions and will try not to speak for too long.One can tell by the number of Members in the Chamber that this is a very important debate—on the share of grant that rural authorities are receiving from Government —that we take extremely seriously. I very much welcome the meetings I have had with the Minister and the sympathy he has shown. What we want to do this evening is take away not just sympathy but a little money, which is a little easier to put in our pockets.The Department for Communities and Local Government announced the local government financial settlement for 2013-14. It will reduce central Government support to councils while doing nothing to address the long-standing inequality in funding between rural and urban councils. We are not asking for a change in the Government deficit reduction strategy, as we support the Government in taking tough decisions to tackle the budget deficit inherited from the previous Administration; a quarter of all public expenditure is accounted for by councils and that must be addressed. Instead, we are here this evening, even at this late stage, to press the Secretary of State to revise the proposed settlement and make good on the long-standing promise to correct this historical imbalance and give rural local authorities their fair share of central Government funding, in line with the summer consultation.Mr Graham Stuart (Beverley and Holderness) (Con): Does my hon. Friend agree that the rural penalty, which sees 50% more per head going to urban councils than to rural councils, cannot be justified, even by increased levels of deprivation in the urban areas? The additional cost of delivery in rural areas and of need in rural areas means that there is a demand across the country for a fairer settlement.Neil Parish: I thank my hon. Friend for his intervention, because I was going to say how much I thank him for his support. He chairs the Rural Fair Share campaign, and I thank him for pursuing this issue with Ministers with such tenacity and for helping to secure this debate. I agree with him entirely that the current situation just is not fair. We are not here to rob urban authorities of their money, but we are saying clearly to the Government that there are inequalities and they must be put right.Sir Alan Beith (Berwick-upon-Tweed) (LD): Does the damping system not make the matter worse? It says to rural authorities, “You deserve more but we are not going to give it to you until at least 2020. We are going to give it to authorities that will kick up a fuss if we don’t give it to them.”Neil Parish: I shall go on to mention the damping, but it seems to have achieved the worst of all worlds. The funding issue was looked into, and the Government listened to rural authorities and said that they would move money across, but the so-called damping process has been added to the system and it seems to have made the settlement even worse than it would have been without it. That is where the Government must look again.Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) rose—Mr Deputy Speaker (Mr Lindsay Hoyle): Order. May I just say to hon. Members that one or two of you wish to speak very high up on the list and I am bothered that people keep intervening? If you go down the list as a result, you will understand, because it is going to be four minutes each at this rate. Were you giving way, Mr Parish?Mr Liddell-Grainger indicated dissent.Sir Tony Cunningham (Workington) (Lab) rose—?>Neil Parish: I will give way to the hon. Gentleman.Sir Tony Cunningham: The hon. Member for Beverley and Holderness (Mr Stuart) mentioned the contrast between urban and rural areas, and the deprivation in urban areas. Does he agree that there is deprivation in rural areas, too?Neil Parish: I thank the hon. Gentleman for his intervention because that is precisely the point. Rural areas are often leafy and green, and it does not appear, on the face of it, that there is any deprivation there, but there is. In rural areas people often have lower wages and so even those who are working find it very difficult to pay high levels of council tax. He makes a good point.Simon Hart (Carmarthen West and South Pembrokeshire) (Con): My hon. Friend will be depressed to learn that I am confused already, because we are talking about rural areas and urban areas, yet I am not aware of any line on the map that distinguishes between the two. Could he, or could the Minister, explain precisely how the difference is defined?Neil Parish: My hon. Friend makes an interesting point, because one of the arguments is about how we define what a rural authority is. Under the Department for Environment, Food and Rural Affairs definition some rural authorities are 80% rural and some are 50% rural, whereas the DCLG has one overall view: it has added everybody together and called them rural authorities. That is one of the problems we are facing.Miss Anne McIntosh (Thirsk and Malton) (Con): I congratulate my hon. Friend on the timing of this debate, as most councils are setting their council tax at the moment. Does he agree that it costs more to deliver public services in rural areas, because of the increasing cost of fuel in those areas?Neil Parish: My hon. Friend is absolutely right, and there should be rural weighting. We are talking not only about the distances between villages and hamlets, but the distances between schools and the number of small schools in rural areas that are the heart of the village. If the local schools were to be destroyed, the village itself could be destroyed, so there is an awful lot to play for here.Roger Williams (Brecon and Radnorshire) (LD): Does my hon. Friend agree that in rural areas there are often a lot of self-employed people who are reluctant to apply for benefits such as free school meals, which are sometimes a measure of deprivation? Rural areas therefore lose out in that way as well.Neil Parish: My hon. Friend raises an interesting point about how we define the rural population and how we define depravity— [Interruption.] Perhaps I should refer to those who are deprived, rather than to depravity. I still want to make a serious point, because there is a problem with how the statistics are compiled and how judgment is made on rural areas. We in rural areas are all supposed to be wealthy and are asked to pay a great deal more of overall local government spending in our council tax.Anne Marie Morris (Newton Abbot) (Con): Does my hon. Friend agree that sometimes the rural authorities that have been the most careful—doing the right thing—are the most penalised? For example, Devon has saved £100 million in the past three years, yet its gross value added has declined over seven years and is now 78% of the UK average.Neil Parish: Again, one of my hon. Friends raises a good point, because this has been going on for a long time. It went on under the previous Government and, dare I say, probably went on slightly under the previous Conservative Government. In those days, I was in local government. Savings were made and we cut our cloth accordingly, but along came the Government saying, “You have been so careful with your spending that you can now cut it some more.” I wonder whether central Government recognise those authorities, such as Devon and others, that have spent money wisely and made savings, yet are asked to make further reductions. The Minister is extremely concerned to make this fair, but we need not only to talk about it, but to sort it out.Let us consider, for instance, the amount raised in council tax. Rural authorities such as Mid Devon and East Devon, which I represent, will raise in council tax nearly twice as much as, say, a local authority such as Greenwich. Therefore, rural populations are not only not getting a fair share of grant, but have to fund much more of local government spending from council tax.The Government spend a lot of time talking about the overall spending power of a council, but I would argue that it is how we get to that spending power that matters. If we are asking our local residents and council tax payers to provide much more of that spend via their council tax than those in urban authorities do, we in the countryside are being over-taxed and, dare I say, urban authorities are being slightly under-taxed. We were told last year that that would be put right.Annette Brooke (Mid Dorset and North Poole) (LD): Will my hon. Friend consider the fact that the higher council tax paid by many rural authorities is a reflection of the increased cost of service delivery? It is hardly likely to be due to inefficiencies.Neil Parish: Yes. My hon. Friend makes a good point, because there is an extra cost in delivering services in rural areas and rural authorities. However, whatever the cost of delivering a service, we cannot get away from the inequality in how much is given in Government grant to rural authorities compared to urban. I expected and still expect—I have great expectations of the Minister and of the coalition Government—the promise of equal shares for rural authorities to be delivered on.Mr Jonathan Djanogly (Huntingdon) (Con): The point is that we want fairness. We know that the pot had to be reduced, but we were promised that whatever the pot was, it would be more fairly handed out. Not only is that not happening, but it has now been put off until after the next general election.Neil Parish: My hon. Friend makes a good point. Back in 2004 we saw funding drift away from rural authorities towards urban authorities and we thought that now there would be a rebalancing, but that is not happening and, as he says, we will have to wait until almost 2020 before that is put right.If we do not get this year’s settlement right, lower funding for rural authorities will follow in subsequent years. We will see many changes, especially in district councils, where business rates will be retained, but the amount that they are able to spend will still be controlled by central Government. That is why this year’s settlement is particularly important.Mr David Ruffley (Bury St Edmunds) (Con): On that point, in my 15 years as a Member of Parliament I do not think I have seen such anger on the part of rural council leaders in Mid Suffolk district council. One of the most numerate of councillors I have ever met, Councillor Derrick Haley, who has cut services to the bone and been incredibly efficient and innovative, is incredibly angry. Has my hon. Friend picked up that sense of anger from very competent, diligent and loyal Conservative council leaders?Neil Parish: My hon. Friend is right. The position is the same in Devon, where the Devon county council leader made enough savings to get through the current budget and was going forward well, but his budget was cut yet again. That is the problem. Devon is reputed to have more roads than Belgium, for instance, which is why the cost of repair, particularly after the floods, is so large. [Interruption.] It is absolutely true. There are more roads in Devon than there are in Belgium.Rural authorities have to deal with high fuel prices, and the cost of education in schools is much higher. Devon is the 244th lowest in the table for school funding. All these factors need to be taken into consideration by the Government so that we get a fair share. I have much more to say, but in order to give colleagues time to speak—Sir James Paice (South East Cambridgeshire) (Con): If my hon. Friend is drawing his remarks to a close, which would be a shame, may I urge him to address the issue that he promised to come on to, which was raised by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), about damping? It will mean that rural authorities will not see the gains to which they are entitled before 2020 and probably not at all.Mr Deputy Speaker (Mr Lindsay Hoyle): Order. We have already used 14 minutes, and every time we carry on, we are going to lose some speakers. It is that serious.Neil Parish: I accept what you say, Mr Deputy Speaker, so I will bring my remarks to a close. I agree with my right hon. Friend the Member for South East Cambridgeshire (Sir James Paice). We looked at moving funds in a more equal way towards rural authorities. I do not know who it frightened in the system, but it obviously frightened somebody. They came up with a damping process which, in my view, made matters worse. I know from speaking to the Minister that he is very keen to put things right. I shall be interested to hear what he says this evening about bringing back some of the funding that has been taken away by damping. That is what we are after tonight. We do not expect vast pots of new money, but we want to see our situation get better; instead, it just seems to get worse.We look forward to hearing what the Minister has to say about directing a fair share of funding towards rural authorities and making sure that this settlement does not prolong the agony of poor settlements for rural authorities for many more years.| Hansard| Parliament TV...Winding up at the end of the debateNeil Parish: I welcome the powerful speeches that have been made by my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), my hon. and learned Friend the Member for Torridge and West Devon (Mr Cox), the hon. Member for Mid Dorset and North Poole (Annette Brooke), my hon. Friend the Member for Beverley and Holderness (Mr Stuart), the hon. Member for Bishop Auckland (Helen Goodman), and my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes), for Totnes (Dr Wollaston) and for Penrith and The Border (Rory Stewart). My hon. Friend the Member for Congleton (Fiona Bruce) would have liked to contribute, but, like many other Members, was not able to do so.The extent of the support for this evening’s debate is clear from the number of Members who are present. I am sorry that more time was not available. I think that we should seek either a Westminster Hall debate or another debate in the Chamber, because it is clear that Members have more to say.I welcome what was said by the Minister, who dealt with us very fairly. However, I ask him to listen, and to ensure not only that the words with which he is provided by his civil servants show that money has been given to rural authorities, but that those words result in cash and not just statistics. This is not about spending power; it is about what the councils are given in grant. We are seeking a fair share, and Members across the House have made a powerful case for that tonight. I welcome the fact that the Minister will look at the funding for 2014-15, because that is important. I thank everyone for supporting the debate tonight.| Hansard| Parliament TV