The final local government finance settlement for 2014 to 2015 was laid before the House on 5 February 2014. Local government needs to help pay off the deficit left by the previous government, while continuing to wield substantial total spending power, with an overall reduction of just 2.9% next year. The settlement marks the second year of local business rates retention and we have again tried to be fair to all parts of the country.
The settlement also confirmed £9.5 million for Rural Services Delivery funding for the most rural local authorities to support them in transforming services and promoting efficiencies. During the settlement process it was apparent that concern remained over the fairness of the funding that rural councils receive. We have listened to these representations and have accepted that there is more that can be done. We are therefore providing a further £2 million to the most rural councils through a section 31 grant in 2014 to 2015. This grant will be distributed on the same basis as that used to allocate the Rural Services Delivery funding. The allocation of the grant is available online.
All councils should now work to support local enterprise, using the local flexibilities and freedoms that we have put in place, to build more homes and back local jobs so that they can then use the rewards of growth to invest in local services and lower taxes.