Labour accused of not understanding rural areas as council funding review announced

It comes as a new inquiry into the funding and sustainability of council finances has been announced following more than a decade of spending cuts.

The Government say the inquiry will look at whether the system for financing councils in England is fit for purpose.

Figures provided by Westminster showed that just over half of councils surveyed warned they would not have enough cash to cover their expenditure within the next five years.

Announcing the inquiry, Florence Eshalomi, chair of the Housing, Communities and Local Government (HCLG) Committee said: “The state of many councils’ finances in England is at breaking point.”

In Northumberland, the county council is facing significant cost pressures on its budget for adult social care and children’s services.

Council leader Glen Sanderson, warned last week that the current situation was “unsustainable” and claimed the council had spent £50 million more on funding these areas in the last five years.

The council’s deputy leader, Cllr Richard Wearmouth, welcomed a review but raised concerns the Government did not understand rural areas such as Northumberland.

It follows an announcement by deputy Prime Minister Angela Rayner that the rural services delivery grant – worth £3.18 million to Northumberland – will be “repurposed” in the coming year.

Cllr Wearmouth said: “A review of the issues regarding delivering council services to rural counties like ours is needed. Many of our council activities take far longer and are more difficult to recruit for in a sparely populated rural county like Northumberland.

“I am talking for example about home visits by our public health teams, school transport and other such services. I have to say however, we have grave concerns regarding the governments direction of travel regarding council funding.

“We just don’t think Labour understand how rural areas function as shown by their intention to cancel the rural services delivery grant. That change, coupled with others they are understood to be considering could cost our council millions of pounds and lead to some very challenging decisions in the years to come.

“We urge them to think carefully before issuing this year’s local government settlement, as so far their approach to rural areas like ours has been that of an unusually clumsy and careless bull in a China shop.”

Labour has insisted that rural areas will see an increase in their spending power under current plans.

A party spokesman said: “Under the new plans, on average places with a significant rural population will receive around a 5% increase in their core spending power next year. This real terms funding increase demonstrates how this government will stand behind rural councils, and is in addition to new funding being made available to rural areas in 2025-26 through guaranteed EPR payments.”

Deputy leader of Northumberland Labour, Cllr Liz Dunn, said: “This is a welcome move from the new Labour Government.

“The Government has committed itself to a collaborative approach, establishing a cross-party committee to take a broad look at the local government funding and finance system – to bring forward practical recommendations that can empower councils to deliver for their communities and for the people of Northumberland.”