Skip to main content

Urban and Rural Areas: Funding

Volume 599: debated on Monday 14 September 2015

18. What steps the Government are taking to reduce the difference in funding levels between urban and rural areas. (901313)

Our reforms give all authorities substantial scope to increase revenues through promoting growth. I accept that most rural authorities face challenges in delivering services that other authorities do not. Consecutive local government finance settlements have delivered a steady reduction in the gap in spending power levels between urban and rural authorities.

Still surprised, but delighted to be here. I thank the Minister for that answer. Cambridgeshire has a creative way for local authorities to look to bridge the funding gap. The level of economic growth is such that private investors now want to invest in our infrastructure and help us to build affordable housing. Will the Secretary of State or Minister meet me and business leaders from Cambridge to hear our case, because we have an innovative solution?

I will certainly consider a meeting. My hon. Friend talks about promoting economic growth. The business rates retention scheme provides a strong incentive to local councils to reap the rewards of economic growth. Councils now benefit from nearly £11 billion under the scheme, which should deliver a £10 billion boost to national GDP by 2020. If we meet, we can discuss these matters in more detail.

I welcome the Government’s announcement of the rural productivity plan over the summer. In particular, I praise the identification of improved local government as important to the economic regeneration of rural areas. Does the Minister agree that closing that gap—the Government have set out on a path to do that, albeit at an incredibly slow pace—is an important part of improving local government in rural areas?

My hon. Friend has campaigned tirelessly on this issue for some time. As a result, he will know that the previous Government delivered a steady reduction in the so-called urban-rural gap in spending power levels. Consecutive settlements have helped to address the gap, and between 2012-13 and 2015-16 it has been reduced by £205 million. A great deal has been done, but there is still more to do.