Rural Local Authorities: Funding
Monday, 2 November 2026
Contributions
Helen Morgan (North Shropshire) (LD)Liberal Democrat
15. What assessment she has made of the adequacy of funding for local authorities in rural areas.
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)Labour (Co-op)
Under this Labour Government, rural authorities in England will see a total increase in core spending power of £958 million from 2024-25 to 2028-29—an increase of 21.1%. As a result of the fair funding reforms, nine in 10 councils will receive funding that more broadly matches their assessed relative need by the end of the multi-year settlement, up from around a third before the reforms took place.
Shropshire council is in receipt of exceptional financial support following 16 years of disastrous Conservative mismanagement and a settlement from the Government that reduces its central allocation over the next three years. The issue for the council is that any council tax rises it opts for in future will cover only the repayment terms of that exceptional financial support, and will not allow for any financial restructuring. We are clearly in an unsustainable situation, so will the Minister meet me to discuss the terms of the exceptional financial support?
As I said, the average rural council will see an increase in core spending power of 21.1%; Shropshire itself will see an increase of 13.8%. I do understand that councils that find themselves in need of exceptional financial support are at the point at which they need the Government to stand behind them in one way or another. I would be very happy to meet the hon. Lady to talk in further detail about what more we can do.
Markus Campbell-Savours (Penrith and Solway) (Lab)Labour
In rural Cumbria, those without a car struggle to access education and jobs, which is why families on the lowest incomes prioritise car ownership. However, our councils lost out on significant financial support because funding formulas used car ownership as a determinant of income. Will the Secretary of State carry out a review of this approach, and perhaps ask whether civil servants who are privileged enough to travel to work on one of the world’s finest public transport systems are giving us duff advice?
The fair funding review deliberately took into account the different types of local authorities that were funded through the settlement, from London authorities and urban authorities to authorities for coastal or rural communities. For the first time we made sure that deprivation was picked up in the funding formula, and the level at which we did that was in the hundreds of households, not the thousands or tens of thousands of households. The idea behind that is to enable us to really home in on where deprivation exists across the country.
Source: UK Parliament Hansard API. Debate ID: 5429442.