Rural councils are under the most financial pressure, according to a group which aims to improve the delivery of rural services across England.
A report was released yesterday which stated that local authorities have coped well with reductions in government funding, but some groups of authorities are showing clear signs of financial stress. The Department for Communities and Local Government has a limited understanding of authorities’ financial sustainability and the impacts of funding cuts on services, according to the National Audit Office.
The Government will reduce its funding to local authorities by an estimated 28 per cent in real terms between 2010-11 and 2014-15. Further planned cuts will bring the total reduction to 37 per cent by 2015-16, excluding the Better Care Fund and public health grant.
Responding to the report, Graham Biggs, chief executive of the Rural Services Network, said: “Local-authority budgets have been cut very significantly, by 40 per cent in real terms over the lifetime of the current Parliament. Rightly, the initial focus was on making efficiency savings through actions such as restructuring and sharing services.
“Financial pressures are particularly hard for small rural district authorities which have the least scope for cutbacks. Little, if any, scope for efficiencies now remains and cuts are inevitably hitting frontline services, particularly those defined as discretionary or non-statutory.
“In short, there is no more left to give. This is a greater problem in rural areas which have been historically underfunded and so service levels were at a low starting point before the austerity cuts were imposed. It is widely accepted that it costs more to deliver public services to scattered rural populations. It is unfortunate that the current formula used to allocate government grant gives little weight to this.
“The Government recently introduced an additional £11.5 million pot for rural local authorities. It is worth £1.10 per head in those rural authorities receiving it – tiny when set alongside the £178 per head funding gap in government grant per head of population for rural areas compared to urban.”