Angela Rayner has announced plans to slash red tape for local authorities, as well as giving rural councils more money to pay for the cost of being in remote areas.
It comes after countryside authorities raised concerns that they would lose out in local authority spending plans.
Giving a speech at the Local Government Assocation conference, the housing secretary said that “travel time” for services such as bin collection, transport and homecare visits would be taken into account under the government’s plans.
Ms Rayner, who is also the local government secretary, announced proposals last week for councils in deprived areas to receive a greater share of funding as part of changes to allocation rules.
The government said the overhaul would account for “remoteness”, but some rural authorities claimed the plans could “overcompensate” for deprivation and see them lose out to the tune of hundreds of millions of pounds.
But on Thursday, Ms Rayner said the new approach would help “every part of the country” to manage “their unique pressures”.
“We will replace the decade-old data, and for the first time, properly take into account factors such as deprivation and poverty, the cost of remoteness faced by rural communities, meaning bus drivers and refuse collectors have to travel miles to serve their communities,” she said.
“We will take into account the varying ability to raise tax locally, with lower house prices impacting on councils’ budgets, temporary accommodation and the impact of daytime visitors on major cities and coastal towns alike.”
Local government minister Jim McMahon said both deprivation and remoteness had been factored into the plans as he faced questions from the audience about how funding for rural areas would be decided.
“If you’re a rural area, you will see that we’ve taken into account remoteness, so that travel time, as Angela Rayner said, in terms of appointments, emptying bins, homecare visits, and the like,” he said.
“And there’s an extra cost as part of that.”
He said under new plans, data would also be taken from “clusters of households” to catch “pockets of deprivation” that may have gone undetected under the old system.
He added that the process was a consultation, so that between now and a provisional settlement councils would have a chance to feed back what works and “maybe where we could do a bit more”.
Councils get about half their funding from central government, allocated on the basis of a complex set of formulas that seek to determine levels of need and cost for different services.
Labour has said it will replace the “outdated” system with “place-based, focused formulas”.
But the County Councils Network, which represents a group of largely rural authorities, had responded by suggesting the government may have “overcompensated for deprivation in distributing non-social care funding”.
“Most worryingly for many of our councils, this consultation proposes a full council tax equalisation, and this could mean hundreds of millions of pounds of additional funding being redistributed from county area,” chairman Tim Oliver said last week.
Elsewhere in her speech, Ms Rayner announced “reorganisation” plans aimed at slashing red tape and reforming accountability at a local level.
“We must cut out this needless duplication. We must take the brilliant leadership shown by district and county councillors and move it to a simpler structure with more resources for the frontline and clearer accountability for residents,” she said.
“Alongside our new outcomes framework, we’ll be launching a comprehensive review to ensure unnecessary regulations and needless asks from Government aren’t getting in the way of you serving your communities.”
She said the new framework would focus on “outcomes” rather than “micromanagement”.
As part of the overhaul the government will introduce a “public interest test” aimed at reducing “costly dependence on eternal providers,” she said.
“We are working to undo the ideological presumption of outsourcing as default as part of our plan to make work pay.
“The truth is we have become hooked on short-term solutions, creating a costly dependence on external providers which can fail to deliver, particularly for vulnerable people, young and old.”
The proposals will be put to consultation with councils and local authorities from Thursday before a final framework is published, with the government aiming to implement it by April 2026.
Responding to Ms Rayner’s speech on Thursday, the County Councils Network said the announcement was a “positive step” towards streamlining funding pots.
It added: “The key now will be to ensure that these funds are distributed to the places most in need, with county areas having untapped economic potential but requiring the funds for the schemes to unlock this.”
