Funding for Deprived Areas

19. If he will take steps through the fair funding review 2.0 to ensure that the most deprived lower layer super output areas receive the largest increases in funding.

22. What progress he has made on the fair funding review 2.0.

On Thursday 20 November, the Government published a policy statement setting out our plans for the 2026-27 to 2028-29 multi-year local government finance settlement. Through the settlement, we are introducing a system based on need and evidence. In doing so we will target a greater proportion of grant funding at deprived places, ensuring best value for money for taxpayers.

In Warrington we see some of the starkest inequalities anywhere in the country. One area is ranked the 899th most deprived, and the highest position is 33,480th, a gap of more than 32,500. Those vast disparities are masked by population-weighted averages, with Warrington ranking 199th overall and only 43rd in range. Will the Minister ensure that fair funding 2.0 truly reflects vast internal inequalities, so that resources reach the communities most in need?

I admire my hon. Friend not only for standing up for Warrington, but for her command of the statistical detail. The fair funding review will distribute more funds to deprived areas, and, as she has just demonstrated, the distribution is underpinned by granular data from households in lower-layer super-output areas consisting of between 400 and 1,200 people. That means that we can account for pockets of deprivation within more affluent areas. More broadly, I will happily work with my hon. Friend to ensure that we can stabilise Warrington council’s finances, and I will ensure that officials are in touch with the council.

Under the last Government, cash-strapped authorities like Bassetlaw district council saw support grants slashed from a 66% funding commitment in 2011 to a 25% commitment in 2024. The compounded damage that this has done to areas like mine can be calculated in multimillions of pounds. Many authorities are on their knees. Can the Minister explain in more detail how they will be able to plan for the year ahead?

I know that my hon. Friend always stands up for her constituency, and that she always will. Under our proposals, shire district councils are expected to see an average funding increase of 2.7% over the spending review period. Across the Department, we will support district councils in that and other ways, and I look forward to discussing the issue in detail with my hon. Friend and her council.

Cambridgeshire fire and rescue service is funded through a formula that relies on population density and sparsity figures from the 2001 census. Since 2001, Cambridgeshire has grown by over 150,000 people and 30,000 new homes, making the service one of the leanest per head in the country. We have effectively built a city the size of Cambridge in Cambridgeshire and given it no further funding. Over-reliance on council tax to bridge funding gaps undermines the core principle of risk-based resource allocation, so what assurances can the Minister give me that the fairer funding review 2.0 will not require the difference to be made up by simply increasing the council tax precept by the maximum?

The hon. Gentleman mentions fire. The Minister responsible and I are keeping this issue under review, and we are happy to hear further from him if he has concerns about it.

Rural counties like Herefordshire face additional costs in delivering services because of rurality. Extra cost pressures mean that we need another £35 million next year to provide the same services, but it looks like the fair funding review will reduce central Government funding for Herefordshire by £12 million. Does the Minister recognise the extra costs of rurality, and will she ensure that the fair funding review properly allocates the funding that rural communities need to deliver public services in a fair way?

When it comes to rural areas, there are particular challenges for public services. This Government have increased funding for council spending on areas of demand, such as adult social care. We need to make sure that all councils can be financially stable, and can develop the way that they deliver public services, particularly given the challenges that the hon. Lady mentions.