Local Government Finance: Rural Areas
The question
To ask the Secretary of State for Housing, Communities and Local Government, whether eligibility for the Rural Services Delivery Grant takes into account sparsely populated rural areas.
Answered by Jim McMahon
The government took the difficult decision to end the Rural Services Delivery Grant as it did not properly account for need and a large number of predominantly rural councils received nothing from it.
In 2025-26, places with a significant rural population are receiving almost a 6% increase in their Core Spending Power compared to the previous year, which is a real terms increase.
The government is absolutely committed to tackling the issues that matter to rural communities. We are currently consulting on reforming the local government funding system via gov.uk The Fair Funding Review 2.0 and invite views and supporting evidence on this issue and beyond.
Our updated assessment of need will more effectively capture variations in demand for services within a local authority. We are also proposing to continue to apply Area Cost Adjustments to account for the different costs faced in delivering services, including in rural and urban areas. This includes a new proposal to consider the remoteness of an area alongside its accessibility.
We will ensure our approach is informed by the latest data and evidence and are inviting views and supporting evidence from the sector and the public on this approach.
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