Budget’s case for levelling up rural areas – Graham Biggs

A NEW report for the Rural Services Network has highlighted (again) that rural areas, like those across Yorkshire, face the triple whammy of greater need, higher costs and lower funding.

Wages and salaries in rural areas are, on average, considerably lower than those paid in towns and cities. This means market-rate house prices and private rental costs are too expensive for many local people, many of who are the key workers who form the backbone of our rural communities.

Costs of living are generally higher in rural areas too. Present and future demographic challenges such as ageing populations are also felt more acutely in remoter areas.

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It costs more to deliver the same service in a countryside area than it does in urban areas, owing to the lack of economies of scale. The cost of an item or service goes down, as the demand for it goes up – the initial investment or fixed cost is divided between more items or people.

Chancellor Rishi Sunak during a visit to Northallerton in his Richmond constituency last June.

Because rural areas are more sparsely populated than towns or cities, more money has to be spent per person to deliver the same service.

For example, over the year, rural areas need double the number of firefighters per incident compared with towns and cities to ensure complete coverage of their areas.

The report by Pragmatix Advisory for rural groups demonstrates that for every person in a rural area without a major city, £301 is allocated from Government capital funding compared with £434 in urban areas – a discrepancy of 44 per cent.

As another example, for every 100,000 people, 36 per cent more affordable homes are built in towns and cities compared with rural areas.

How will the Budget benefit market towns like Thirsk?

These funding decisions do not just happen. They are the result of the processes and formulas used by the Government and those do not result in fairness for rural areas.

The commissioners of this study have long challenged the Government on a number of policy areas that affect rural communities, stressing that rural areas should not be left behind in the Government drive to level up the different parts of the country and build back better.

This report demonstrates that the issue of unfairness extends beyond individual government commitments; it’s built into the process through which funding allocations are made.

The Green Book process – guidance issued by HM Treasury covering policy, taxation and funding options – is designed to maximise the delivery of economic, social and environmental returns for UK society.

Chancellor Rishi Sunak is being urged to deliver for rural areas, like the Yorkshire Dales, in this week's Budget.

This new report sets out the extent to which this mechanism fails rural communities and is another demonstration of government process which disadvantages rural areas and communities, and also the businesses which operate from them or serve them.

From the outset, the way in which funding allocations are calculated does not take into account some of the unique characteristics of rural areas, especially sparsity of population and higher service costs.

The recent 2020 Spending Review refers to the new UK Shared Prosperity Fund saying that a portion of that fund is intended to target places most in need across the UK, such as rural and coastal communities. To achieve what the Government says, processes such as the Green Book clearly need to be refocused.

It is understood that the public purse is under immense pressure. Rural communities are not asking for more money – they just want a fairer share of the pot and funding processes which reflect rural issues and costs.

The Government’s promise to “level up” the country and build back better might well be the adage for which it will be best remembered. But, at present, the focus, and the appraisals in the Green Book, concentrate on levelling up between regions.

If we are to level up as a country, there must be levelling up within regions, giving greater parity between rural and urban areas. Data published at the level of the nine English regions hide disparities and make it impossible to track whether growth-enhancing spending is reaching the places that most need levelling up. Without action, rural areas will continue to be let down – not levelled up.

There is a “policy corridor” running across the centre of England, in which the Government has concentrated its infrastructure and innovation investment; devolution deals; its relocation of public sector jobs; and core funding for essential local services.

Government must re-frame its view of rural areas, not as hinterlands to which it is hoped benefits will trickle down and not as an afterthought when it comes to investment and opportunities, but as places to build resilient communities that contribute to the UK economy. And that starts with this week’s Budget.

Graham Biggs is chief executive of 
the Rural Services Network.

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