£8.5m Increase in Government settlement funding for Shropshire
10th February 2016
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Daniel Kawczynski MP persuades Government to provide an extra £8.5 Million in improved financial settlement for Shropshire Council.

In a statement to the House of Commons on Monday 8th February, Greg Clark, Secretary of State for Communities and Local Government, set out new measures to support rural councils during the transition to full business rates retention.

The Rural Services Delivery Grant will increase from £15.5 million this year to £80.5 million next year. Ministers will also provide a £150 million a year transitional fund for the biggest losers over the next two years, of which £32.7 million will go to rural areas. In the meantime, the Government will carry out a Fair Funding Review, which will inform the move to 100% business rates retention scheme. The new assessment will be an opportunity to highlight the particular needs of rural areas. 

The Government’s provisional settlement, set out in December, would have reduced the overall amount of central government funding for rural councils by over 31% over the four-year period, whereas urban councils would only have received a 22% average cut. Responding to this Daniel Kawczynski MP informed the Government that he and the Local Authority were unhappy with the offer for Shropshire. The cut in funding seemed to be unfair with Urban Local Authorities receiving a smaller reduction in funding in comparison to their Rural counterparts.

The injustice was perceived to be so great that the Shrewsbury & Atcham MP said he would  vote against the Finance Bill if the settlement was not improved. After Daniel held meetings between Minister Marcus Jones and the leader of the Council Malcolm Pate the Department for Communities and Local Government came forward with a revised offer. Under the new proposals, Shropshire Council will receive additional funding from central government of £5.5 million in 2016/17 and an extra £3.0 million in 2017/18 compared with the provisional settlement.

Daniel Kawczynski MP said “I am extremely pleased that the Government has come forward with a better offer then the one initially on the table, I made sure they were aware that I and my Council were not happy and that if the situation was not rectified I would have no option but to vote against my Party in the lobby. They have also re-assured the local authority that they will look at this problem of funding disparity between rural and urban councils over the long term”. 

The Secretary of State for Local Government Greg Clark MP has also agreed to visit Shropshire in the next three weeks in order to discuss the ongoing problems that rural councils funding being disproportionate to that of urban councils. 

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