Magazine article Public Finance

Taken for a Rural Ride?

Magazine article Public Finance

Taken for a Rural Ride?

Article excerpt

As many of our population flee our towns and cities for the more salubrious corners of the countryside, the time seems right to ask again what is being done to improve the quality of life for the majority of rural residents who depend on good public services to get by.

Central to this guestion is the way the local government grant is distributed among individual councils - a key determinant of what's available to spend on services and council tax levels.

The Office of the Deputy Prime Minister made an overt commitment to introducing greater stability into the grant system with its Three-year revenue and capital settlements consultation paper last December, a move widely welcomed by many observers.

Planning services over a three-year cycle must make sense, and will be welcomed by many of those charged with providing public services, who until now have been forced to wait until the dying weeks of the financial year before knowing what's in store for the year ahead.

However, the concern of the more than 50 sparsely populated rural authorities that I represent is that such stability should not embed the existing unfairness in the current arrangements towards rural areas.

I continue to harbour a nagging concern at the systematic failure of successive governments to commission proper research into the impact of settlement patterns and population dispersal on the cost of providing public services.

Many authorities are now digesting the implications of the 300 or so pages of options for changes in the ODPM consultation paper Formula grant distribution, which was published last month.

The paper says: The aim of this review is to produce a robust and fair system for the distribution of formula grant that will be fit for use in the context of three-year settlements.'

But it admits: The government recognises that any system based on formulae cannot reflect all possible circumstances, so there will inevitably be an element of rough justice: and that the technical nature of the issues means that there is frequently no clear-cut optimum solution, so pragmatic decisions will be needed to produce a workable system.'

And, while there is some positive news in that consultation - for example the realisation that owning two or more cars in the countryside might be a necessity not a luxury there is still a glaring absence of a universally applied sparsity factor to reflect the extra cost of providing services to far-flung communities. …

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