The Government’s Fair Funding plans – currently under consultation – aim to recognise the challenges rural counties face, but could see councils get less grant funding if they don’t raise tax by 5%.
Under plans that went out for consultation in June, the Ministry of Housing, Communities and Local Government says it is hoping to redress an out-of-date funding system for local councils, and direct funding to areas of most need.
The council is currently working to understand what the new Fair Funding model would mean for our services. However, we have yet to see how the review will address long-standing underfunding and fully recognise the challenges of delivering vital services in a rural county.
It is also understood that if the council does not increase council tax every year by 5% – the maximum allowed without a local referendum – the amount of funding will decrease, adding more pressure to local budgets.
Cllr Sean Matthews, leader of Lincolnshire County Council, has written to the Secretary of State for Housing, Communities and Local Government, Angela Raynor, to highlight his concerns. He said: “Despite previous governments encouraging local authorities to keep council tax low, it now looks like we are expected to hike up residents’ bills if we want to see the biggest benefits from this Fair Funding proposal.
“Across our large rural county, services like adult social care and home to school transport are in high demand and cost a lot to run. Government funding for these vital services was cut last year by £9.4m when the Rural Services Delivery Granth was taken away. And this gap cannot be filled with increased council tax.
“And while it’s good to hear that the new Fair Funding formula will recognise how challenging it is for rural councils, we’re also seeing increases in National Insurance costing us about £15m more each year too.
“This is all after years and years of chronic underfunding of rural county councils.
“We’re still working through the details of the proposals, and will be responding to the Government’s consultation. In the meantime I have written to the Government to point out that our spending power is £120m less than the English average*.
“We’ve already started looking at options to save at least £25m, and make sure every penny of your money is spent on things that you care about and rely on. But we need to make Lincolnshire’s case and get a fair share of Government money too, and not simply pass on increasing costs to residents.”
*based on 2024/2025 figures