Rural areas could be left with less money and weaker influence as England’s devolution reforms shift tax revenues to regional authorities, an independent rural policy group has warned ahead of the 28 October Budget.
In its report Rural Interests in the Devolution Settlement, Equal Ground argues that the planned move towards locally retained taxes will favour places with large populations and strong business bases. Under the reforms, regional authorities will keep more locally raised business rates from 2027 and mayors will receive a share of income tax revenues from 2028 in place of central grants. The Institute for Fiscal Studies’ David Phillips has estimated that income tax raised per person is more than three times higher in Greater London than in the West Midlands, 8point9 reported.
Rural England covers about 85% of the country, is home to 9.7 million people and contributes around £259bn a year to the economy. Yet strategic authorities are under no obligation to consider rural needs in their local growth plans. In written answers to Lord Berkeley on 28 September, ministers said growth plans were locally owned and that the government had no plans to require rural commissioners.
Equal Ground proposes four safeguards: funding that recognises sparsity, remoteness and lower tax-raising capacity; a rural duty, or mandatory rural proofing, for regional authorities; rural commissioners with powers to delay decisions and demand transparency; and a funded timetable for areas without mayors to gain equivalent powers. The group says none would add to the overall cost of devolution.
“This is not about special treatment for rural areas,” said co-author Richard Gueterbock. “The government wants to see good growth in every postcode.”
Co-author Angie Bywater pointed to high rural energy costs and limited grid capacity. Almost a third of homes in majority-rural constituencies are off the gas grid, and fuel-poor rural households face an average shortfall of £824 compared with £311 in urban areas, Farmers Weekly reported. “Devolution should help fix that, not lock it in,” she said.
The government is expected to set out further detail on devolution and its funding alongside the Budget. How that settlement treats sparsely populated areas will shape local investment in rural housing, transport, energy and services for years to come.
Featured image: Photo: Richard Cooke, CC BY-SA 2.0, via Wikimedia Commons.
