Urban councils in England receive almost 50% more funding from central government than their rural equivalents, a study has claimed.
At the same time, people living in the countryside pay £100 a year more in council tax than urban residents, according to the report, which was commissioned by the Rural Services Network and carried out by consultancy Local Government Futures.
The analysis found that the average grant to urban authorities was £487 per head, compared with £324 in predominately rural areas. Average council tax per head was £572 in mainly rural areas, compared with £473 in predominantly urban authorities.
The Rural Services Network called for this ‘rural penalty’ to be addressed by the government’s Local Government Resource Review. The network represents 250 organisations that provide services in rural areas, including local authorities, public bodies, businesses, charities and voluntary groups.
Network chair Roger Begy said: ‘This rural penalty means council tax payers in the countryside are forced to pay more but receive less by way of public services in areas where earnings levels are much lower than the national average.
‘When combined with the additional costs of providing services in rural areas, this puts residents in rural communities at a significant disadvantage compared with people who live in urban areas.’
He added that the resource review provided a ‘valuable opportunity’ to redress the imbalance revealed in the research.
‘If the UK is to be led from recession via a more balanced economy and become the best place to start a business in Europe, then we must end the bias against rural areas. If vast swathes of the country are handicapped by higher costs and poorer access to basic services then this vision will not become a reality.’
Conservative MP Graham Stuart, who chairs the All-Party Parliamentary Group on Rural Services, said the report showed rural communities were ‘at the losing end of an inequitable system that sees residents pay more yet receive less’.
Responding to the report, a spokesman for the Department for Communities and Local Government said that the local government settlement was fair between different parts of England – North and South, rural and urban, metropolitan and shire, and includes a £650m fund to freeze council tax bills for one year.
He added: ‘As we continue to deliver the most significant shift in power from officials in London to elected local councils in a generation, including proposals to allow councils to keep their own business rates, councils will gain unprecedented freedoms over how to prioritise their money. And it will give them a set of radical new tools to manage spending in their area in line with the priorities and needs of their residents.’
