Government support for rural upper tier local authorities

Westminster Hall debate 2 September

To illustrate the mess the Government is in regarding local government reorganisation here is a quote from Terry Jermy MP Labour, South West Norfolk, in reply to Richard Foord, during the debate reported below:

“I am sure the Minister heard the hon. Gentleman’s point about local government reorganisation, but I will not comment on it. I can barely understand Norfolk’s proposals, let alone Devon’s.”

[Norfolk council is controlled by Reform and has issued a request for a judicial review.]

Devon MPs challenge government over rural council funding

Lewis Clarke www.midweekherald.co.uk

A council funding shake-up has triggered warnings that rural communities could be left paying more for fewer services while a major reorganisation risks creating an authority too large and too weak to thrive.

Three MPs with Devon constituencies used a Westminster Hall debate to challenge the government over the cost of delivering services across sparsely populated areas and the impact of proposed local government changes.

South Devon MP Caroline Voaden, Honiton and Sidmouth MP Richard Foord and Tiverton and Minehead MP Rachel Gilmour all raised concerns about the future of rural services and the financial strength of any new authority covering large parts of the county.

The debate on Wednesday, September 2, focused on government support for rural upper-tier local authorities and heard repeated arguments that countryside councils face higher costs because residents, schools and services are spread over much greater distances.

Ms Voaden said the rural-urban divide was one of the deepest in the country and that deprivation was too often hidden in areas that outwardly appeared prosperous.

She told MPs that people in rural areas often faced lower wages, seasonal work, longer journeys and poorer public transport, while access to healthcare, banking and post offices had also declined.

She said: “I have since come to realise that the rural-urban divide is possibly one of the deepest divides in our country and one that is too often overlooked.”

Ms Voaden added that high house prices and second homes had intensified the affordability crisis, saying Devon’s full-time salary-to-house-price ratio stood at 10.6:1 compared with an England average of 8.7:1.

Her criticism then turned to the 2026-27 to 2028-29 local government finance settlement.

She said the withdrawal of the rural services delivery grant had cost councils in Devon about £14 million and argued that rural authorities had not benefited from replacement funding in the same way.

She said the government’s funding approach failed to reflect the extra cost of providing services across a large, sparsely populated county.

Ms Voaden also linked the funding dispute directly to local government reorganisation in Devon.

She criticised the government’s chosen proposal for four unitary authorities, under which Plymouth and Exeter would expand, a further urban growth area would be centred on Torbay and a fourth authority would cover much of rural Devon.

She said that remaining authority would stretch around 70 miles from Ilfracombe to Salcombe, or about 100 miles by road, while lacking a major town capable of driving growth and regeneration.

Ms Voaden told MPs: “The Prime Minister talked yesterday about supporting rural areas and not creating a two-tier country, but the Government have created a two-tier Devon.”

She urged ministers to reconsider the reorganisation and look again at alternative options, arguing that the selected proposal prioritised growth in Plymouth and Exeter over the “economic and social cohesion of rural Devon”.

Ms Gilmour backed those concerns.

Her Tiverton and Minehead constituency crosses the Devon-Somerset border, and she told the debate that the Devon part alone covered around 800 square miles.

She said: “The part of my constituency in Devon is 800 square miles and will form just part of an enormous rural authority.”

Ms Gilmour then asked whether such an authority would have the “fiscal power to sustain itself”, a concern Ms Voaden said she shared.

Mr Foord raised a separate warning over Devon’s road network and the effect of separating Exeter from the wider county.

He told MPs: “Devon has to maintain over 8,000 miles of road, which is the most of any upper-tier authority in the country.”

He questioned whether partitioning Exeter from what he called the “rural Devon hinterland” would remove part of Devon County Council’s tax base and weaken its ability to support other services and economic growth.

The government defended its wider funding formula.

Parliamentary Under-Secretary of State for Housing, Communities and Local Government Jim McMahon said the fair funding review was intended to distribute resources according to assessed need while recognising differences in council tax and business rates income.

He said nine in ten councils would receive funding that broadly matched their assessed relative need by the end of the multi-year settlement.

Mr McMahon also rejected claims that the system ignored rural costs.

He said an area cost adjustment was applied across funding formulas and took account of factors including wages, property costs and journey times.

A separate remoteness adjustment was also used for adult social care.

He acknowledged the argument that rurality affects other services, including children’s services and waste collection, but said there was a balance between making the formula more detailed and keeping it simple, transparent and predictable.

Ms Voaden challenged him directly over the loss of the rural services delivery grant.

She said: “The Minister says there is an area cost adjustment, and yet the leader of Devon county council says that Devon lost £14 million because of the rural services delivery grant, which was removed. How can those two things be true?”

Mr McMahon replied that the government had “always taken the view” that the rural services delivery grant had a “weak evidence base”.

He said the fair funding review was instead based on the best available data.

The minister also pointed to £4.6 billion of additional adult social care funding in 2028-29 compared with 2025-26 and almost £3 billion over four years for the families first partnership programme.

He said the government had also set out £4 billion over three years for reform of special educational needs and disabilities services.

Local authorities with high-needs deficits would receive grants covering 90% of those deficits, subject to approval of local reform plans.

Mr McMahon said the government had recognised pressure from home-to-school transport in rural areas by introducing a formula based partly on pupil numbers and travel distances.

Following consultation, he said the maximum distance used in that formula had been increased from 20 miles to 50 miles.

On devolution, Mr McMahon said areas would not be shut out simply because they were not yet ready for a mayoral model, but added that local consent and partnerships would be needed.

A council funding shake-up has triggered warnings that rural communities could be left paying more for fewer services while a major reorganisation risks creating an authority too large and too weak to thrive.