‘Unfair’ council funding holding back social mobility in rural counties, MPs warn

An inquiry by a cross-party group of MPs has found that the least socially mobile areas in England are counties, and those areas are held back by an ‘outdated’ and ‘inequitable’ method of funding councils and the false perception they are affluent.

The report, Social Mobility in Counties, by the County All-Party-Parliamentary Group (APPG) and County Councils Network (CCN) blames the current way of funding councils and growing financial strain on their budgets as helping to embed a cycle of low social mobility.  Eight of the ten least socially mobile areas in England are county areas, and are overwhelmingly rural and coastal, the report found.

MPs say the perception of counties as affluent areas has masked deep-seated socio-economic challenges and deprivation in shire counties, while the additional costs of delivering rural services are also not fully recognised in the way funding is allocated to councils.

The report outlines that councils in London receive £482 per head, whilst metropolitan boroughs and cities receive £351 per head, compared to £182 per person for public services in county areas. Download an infographic on county funding here.

At the same time, recent research by CCN has shown that councils face a £3.2bn funding gap between 2018-20.

This historically lower funding for public services and infrastructure is an increasing issue at a time when councils are having to re-route funding for social services and care for the elderly, is hampering efforts by county authorities to provide vital services that promote and support social mobility such as bus routes, public transport, youth centres and libraries. The report finds that transport networks in particular are a major hindrance to social mobility in counties.

The report, which is the culmination of a six-month inquiry by MPs representing shire counties, features a new ‘social mobility index’ compiled by the think-tank Localis.

Below, watch a video of BBC News at 6 covering the report.

The analysis, which builds on last year’s findings from the Social Mobility Commission, incorporates data across employment, skills, early years, and education found there is no north-south divide in social mobility; instead showing a visible city versus rural divide.

Rural areas are amongst the least socially mobile, with Devon (south-west), Kent (south-east), Cumbria (north-west) and Northumberland (north east) in the bottom ten, as well as Worcestershire in the Midlands. Coastal communities such as Dorset and Norfolk are also in the bottom ten.

The negative trends in social mobility are compounded by a lack of employment opportunities and rural remoteness leading to a ‘brain drain’ where teenagers move out of their home county to university in cities and never return, increasing the ‘dependency ratio’ of counties well above the national average.

MPs are calling for calling on the government to break outdated perceptions of shire counties as places with little social challenges and deliver a fairer share of funding so they can invest in raising social mobility, as well as new powers in skills and transport.

The government is currently reviewing the way councils are funded, with a new system set to be in place in 2020. The APPG argues that ministers must ensure that counties receive a fairer share of funding by ensuring that the new funding methodology recognises ‘hidden deprivation’ in counties and the increased costs of delivering services in rural services. They argue this would help target resources towards improving social mobility in the areas it is most needed.

It also recommends government seeks to address this by devolving skills budgets and powers, and for counties to be given equivalent growth powers currently only enjoyed by city regions who have elected mayors such as Manchester and the West Midlands – with both areas performing well for social mobility.

Peter Aldous MP, chairman of the County APPG, said:

“For a long time now, the perception that counties are affluent and wealthy has meant they have been overlooked in terms of directing resource and policy towards improving social mobility.

“An outdated and inequitable method of funding local authorities has disproportionally channelled funding towards London and the major cities; holding back social mobility in county areas, and embedding a cycle of low life chances for residents. This is unfair.

”Funding is only part of the answer; today’s report showcases the innovative work county authorities are doing to raise social mobility in their areas, but their ambitions are hamstrung. If we are to bridge rural vs urban divide in social mobility, then government needs to ensure that counties have fair and sustainable funding in future, backed by the powers to genuinely make a difference.”

Jonathan Werran, chief executive of Localis, added:

“Our research for the commission shows young people in London are pulling away from the rest of the country in opportunity and educational outcomes as soon as they enter school.

“Young people growing up in coastal and rural areas of England are then further constrained by poor skills infrastructure and in many cases weak prospects for finding good local jobs that pay decent wages. 

“Devolution of the adult skills budgets to all strategic authorities, and a more ambitious reconfiguration of local political economies represent two main opportunities for boosting social mobility and delivering the promise of an inclusive growth that can help bridge today’s unacceptably wide urban-rural divide.”

Notes to editor

• The County APPG is a cross-party forum of county MPs which acts as a forum for parliamentarians to consider the critical issues and challenges faced by county areas and their communities. It promotes the current and future contributions of county areas, to the national economy, to public services and to social wellbeing.
• CCN is the national voice for England’s county councils. It represents all 27 county councils and 9 county unitary authorities. Collectively, they represent 26 million people, or 47% of the country’s population. It is a special interest group of the Local Government Association. For more information, visit countycouncilsnetwork.org.uk. CCN is the secretariat to the County APPG.
• Localis is an independent think tank for putting place at the centre of politics and policy. Our work promotes neo-localist ideas through research, events and commentary, covering a range of local and national domestic policy issues. For more information, visit localis.org.uk.
• The per-head funding figures are taken from the 2018-19 allocations of settlement funding assessment for councils. This settlement funding assessment comprises of the main government grant to councils – the Revenue Support Grant, and retained business rates.
• The funding gap figures are taken from a budget survey carried out earlier this year by the Society of County Treasurers for the County Councils Network. In total, 36 county local authorities responded.

• Indicators used by Localis to compile social mobility scores: