Local Government Finance

Blake Stephenson Excerpts

Wednesday 11th February 2026 Commons Chamber

[James Wild]

I will not give way; lots of people want to speak.

This is a serious cost pressure on rural authorities that the Government have chosen to ignore. Of course, this has been compounded by the removal of the rural services delivery grant in 2025—the loss of funding that had been put in place specifically to acknowledge the high cost of rural service delivery. That was a political choice made by a very political Secretary of State.

People in Norfolk can see in plain sight how this Government view rural areas, in the light of the farm tax, the lowering of the bus funding that the previous Government had put in place, and the scrapping of road and rail schemes in our area. I ask the Minister, who is not currently in her place—I hope the Whip on the Front Bench will make a note of my question—why Ministers rejected the evidence that Norfolk and other rural authorities submitted about the additional costs that they face and the importance of remoteness.

After remoteness, there is the recovery grant, which is supposed to be a one-off formula intended to give local authorities the funding they need. The formula was meant to be replaced, but the Government have decided to continue it for the next three years. However, there is no funding for Norfolk county council, despite the allocation, and the additional element of the final settlement, supposedly being targeted at upper-tier authorities—only Labour upper-tier authorities, it seems. It is little wonder that the Institute for Fiscal Studies said:

“Maintaining…allocations of the recovery grant does not look like a principled decision”.

I think that says it all. The policy is designed to shove all funding to Labour councils. Let us be clear: this is about shifting resources away from rural areas and into unitaries.

[Blake Stephenson (Mid Bedfordshire) (Con)]

I declare an interest: I am a Central Bedfordshire councillor. Central Bedfordshire will have to find £17 million off the back of this so-called fairer funding formula. Does my hon. Friend agree that that is nothing short of pork barrel politics?

[James Wild]

I agree. The figures simply bear that out. As a result of the settlement, council taxpayers in Norfolk—it is probably the same for my hon. Friend’s constituents—will bear the brunt through much higher council tax. Maximum council tax increases are assumed for the full three years of the settlement.

Let me touch on internal drainage boards, which are responsible for managing water levels and reducing flood risk. They play a vital national role in protecting key areas, including the prime agricultural land that is so important for our food security; yet the cost of IDBs falls on council taxpayers. In the borough council of King’s Lynn and West Norfolk, 40% of council tax goes towards IDB levies—costs that other local authorities do not face. Funding should reflect the nationally important role of IDBs. Additional support was introduced by the previous Conservative Government. It has been continued by this Government, but they are not uprating it with inflation to take account of the high energy costs that IDBs pay. We do not know if that support will continue in future years. If it does not, will the Minister commit to working with the local and district authority groups that have been set up precisely to find an equitable solution?

Of course, Norfolk is losing out further still because of the Labour Government’s decision to cancel the Norfolk and Suffolk mayoral election and the county council election—two political choices with which I fundamentally disagree. Not only have our elections been scrapped, but my constituents—and those in Suffolk—were due to benefit from an annual investment fund of £37.4 million a year, which the Government have now cut for Norfolk. We will lose out on £48 million in the next two years. Why? Because of decisions taken by these Ministers. It is another sign that this Government neglect the people of Norfolk.

I welcome the announcements on SEND deficits, but it is clear overall that this is not a fair funding settlement. There is an over-reliance on council tax increases for my constituents, there is no recognition of the true costs that rural authorities pay, and ministerial decisions will lock in inequalities for years to come. The Government should think again.