Rural services delivery grant: North Yorkshire Council facing shortfall amid fears of £14m rural funding cut

North Yorkshire council leaders and MPs have spoken out after a £110 million package of funding for councils covering rural parts of England was stopped.

North Yorkshire Council received the greatest share nationally of the rural services delivery grant with £14.2 million in funding each year.

The Government said the fund did not allocate money fairly based on need with some rural councils receiving nothing.

North Yorkshire Council’s deputy leader, Coun Gareth Dadd, warned that cutting the grant would leave many authorities covering rural areas in a far more perilous financial state when compared to urban councils.

Coun Dadd said: “All councils are faced with an unenviable financial predicament at the moment, but we need to make sure that rural parts of the country are given their fair share of funding to support the vital services we deliver.

“Ministers have said that one of the key factors for assessing what funding a council receives is the level of deprivation that is being seen in a particular area of the country.

“However, this cannot skew funding to more urban areas of the country, as while efforts to support those most in need is a vital consideration, this cannot be at the detriment of our countryside communities.”

Coun Dadd said North Yorkshire had a high population of older people and was seeing financial challenges regardless of any link to deprivation.

“The loss of the rural services delivery grant will have a major impact in North Yorkshire and has left us with a multi-million pound shortfall that will impact on our budget which is already under immense pressure.

“The Government has announced it is cutting the grant in advance of a spending review without considering the full impact on rural communities. I would urge the Government to ensure that the spending review is carried out in a measured and considered way to allow all councils to receive the funding allocation that they deserve.”

North Yorkshire Council said it was facing a predicted annual deficit of about £90 million at the start of this financial year.

The shortfall has been compounded by the demand for care of older people, working age adults, and children and young people.

The rural services delivery grant was introduced by the previous government.

Rishi Sunak, MP for Richmond and Northallerton, said its aim was to recognise the additional costs of delivering local authority services in sparsely populated areas like North Yorkshire.

He said: “Future funding arrangements must continue to recognise the unique challenges of providing services across a very large rural area like ours.”

Ripon and Skipton MP Julian Smith has also raised concerns about the changes.

“Taking into account our area’s rural geography, North Yorkshire Council faces unique challenges with rising costs and increasing demand, especially in areas such as social care, special educational needs and transport.

“I will raise the council’s concerns directly with ministers and push for a fair funding review to ensure rural communities get the support they need.”

North Yorkshire is the latest rural authority to raise concerns about the removal of the grant, with Devon Council announcing an all-party protest against the move earlier this week.

In response to the concerns, a Ministry for Housing, Communities and Local Government spokesperson said places with a significant rural population would receive around five per cent more in their core spending power during the next financial year.

They added: “We recognise the challenges that local authorities are facing, which is why we have announced over £4 billion in additional funding for local government services, including £1.3 billion which will go through the settlement.

“The rural services delivery grant does not properly account for rural need and a large number of predominantly rural councils receive nothing from it – that’s clearly not right and a sign we need to allocate funding more effectively.”