‘Chicken feed’ row over funds for rural areas

Countryside MPs dismissed as “chicken feed” a tiny additional grant offered to councils in rural areas yesterday as part of the Government’s annual local authority grant settlement.

Urban councils also condemned the announcement, with Labour and trade unions warning that the most-deprived areas will be hardest hit by the latest round of cuts. Large councils across Yorkshire including Leeds, Sheffield and North Yorkshire have all warned they are now facing further massive cuts to services as a result.

The Government, however, insisted its settlement was “fair to all” and councils must bear their share of the austerity drive.

The Yorkshire Post has reported previously how petitions have been collected in more than 100 rural constituencies to protest at what campaigners term the “rural penalty” in council funding, which sees urban areas receive on average 50 per cent more support per head from Whitehall.

Yesterday’s announcement included a small £9m grant for rural councils to redress the balance – but campaigners made clear it would make little difference.

“People living in rural areas earn less on average than people living in urban areas, pay higher council tax and get fewer services, which are more expensive to deliver, yet there is a 50 per cent rural penalty, with 50 per cent more going to urban areas than rural ones,” said Graham Stuart, a senior backbench Conservative and the MP for Beverley and Holderness.

“We welcome this grant into the general fund, but it will do nothing to close the gap between urban and rural, which cannot be defended.”

South West MP Andrew George, who chairs the Liberal Democrats’ rural policy unit, added: “Once again, the adjustment in the settlement is chicken feed when it comes to addressing the inequality between rural and urban areas.

“Does the Minister not realise that, at this rate, it will take more than 1,000 years to put that right?”

The issue of rural-urban disparity has been recognised by the Government, and only last week Chancellor George Osborne called for a “wider debate” on how Whitehall funding can better be targeted at pockets of rural deprivation.

However, Local Government Minister Brandon Lewis said yesterday that the ongoing spending squeeze means the coalition has little room for manoeuvre.

“We have actually increased last year’s amount (for rural areas),” he said. “I appreciate the point about the need to narrow the gap between rural and urban areas, but (MPs) should appreciate we are acting against the backdrop of the financial mess in which we were left by the last Government.”

In Yorkshire, councils warned they are now staring into the abyss after the settlement delivered double-digit cuts for some of the region’s largest authorities.

“Today’s announcement has confirmed our worst fears,” said Leeds City Council leader Keith Wakefield. “Our budget is being cut by 10 per cent for 2014-15 with a further 15 per cent to be cut the following year.

“To suggest that today’s announcement is fair for all is simply not true. The evidence points to a widening funding gap between North and South, and disparities in funding in the region.”

His words were echoed in Sheffield, where the council said it will have lost half of its Government funding by 2016.

Cabinet member for finance and resources Ben Curran said: “For the past three years we have had £180m of cuts, whilst at the same time some of the wealthiest areas of the country receive almost no cuts at all.”

Speaking in the Commons, Shadow Local Government Secretary Hilary Benn, the MP for Leeds Central, said the Government had targeted its cuts on the most-deprived parts of the country. “That is unjust,” he said.

But Mr Lewis insisted: “This year’s settlement is fair to all parts of the country – rural or urban, city or shire. Councils can deliver sensible savings while protecting front-line services.”