Ministers have announced a shake-up of local authority funding that will redirect cash from affluent rural areas to urban councils hit hardest by austerity, sparking warnings that rural councils will be forced to hike council tax.
The changes, effective from April, guarantee real-terms funding increases for deprived areas in the Midlands and north of England, including Reform-led councils such as Durham and Lancashire. The Local Government Minister Alison McGovern said the system is fairer and recognises the extra needs of 'left behind' areas.
However, the County Councils Network (CCN) criticised the reforms, calling them 'arbitrary' and accusing ministers of caving to pressure from urban councils. Steven Broadbent, CCN’s finance spokesperson, said 33 county and rural councils face a real-terms funding reduction unless they increase council tax by 5% per year for the next three years.
Jeremy Newmark of the District Councils’ Network warned that reallocating an already inadequate funding pot could increase deprivation outside big cities. London councils also raised concerns, with chair Claire Holland noting half the capital’s boroughs may need bailouts by 2028.
