Council leader calls for improved funding for rural areas

Nation.Cymru staff

A council leader called for Wales’ local government funding system to better recognise the cost of providing rural services – just hours before ministers announced it was being reviewed.

Powys County Council leader Cllr Jake Berriman said large, sparsely populated authorities face additional costs that are not adequately reflected in the current formula.

The Welsh Government subsequently confirmed it had commissioned a review that will consider rurality and sparsity as well as deprivation and demographic change.

Cllr Berriman had highlighted the financial pressures facing Powys following an interview with BBC Radio Wales, arguing its geography and demographics make challenges faced by councils across Wales more acute.

Powys is Wales’ largest county by area, with communities spread across a wide geographical area, an ageing population and a smaller working-age population.

It also has one of the country’s largest local road networks, while services including social care, education, waste collection and transport have to be provided across sparsely populated communities.

Cllr Berriman said: “Powys faces the same national pressures as councils across Wales, but rurality makes those pressures more acute.

“Our services are spread much more thinly, our staff often have to travel further between visits, and we have more roads and infrastructure to maintain across a relatively small population.

“That is why we have been arguing for some time that the funding formula needs to be looked at again, with a readjustment in favour of rural areas.

“If Wales is serious about fair and sustainable local services, the formula must properly reflect the real cost of delivering those services in places like Powys.”

Shortfall

The council’s Medium-Term Financial Strategy forecasts a £9.7m funding shortfall in 2027/28, rising to a cumulative £28.8m by 2030/31.

Powys says it has already delivered around £146m of savings over the previous 14 years, with a further £12m included in its 2026/27 budget.

The Welsh Government review will examine some of the issues highlighted by Cllr Berriman.

Work is already under way on the evidence used to distribute funding, initially focusing on education and personal social services, which together account for nearly three-quarters of the funding allocation.

Researchers will consider new measures of sparsity and population dispersion, including travel-time data intended to better capture the cost of delivering services in rural and remote areas.

The review will also examine the impact of an ageing population, new school and pupil-based indicators and funding systems used elsewhere in the UK and internationally.

However, ministers said the complexity of the work means any changes could not be introduced before the 2028-29 local government settlement.

‘Real pressures’

Minister for Local Government, Housing and Planning Siân Gwenllian said: “Local authorities across Wales are on the front line of delivering the services people rely on every day, and it’s right that the way we fund them is based on evidence and keeps pace with how our communities are changing.

“This is about making sure that funding reflects the real pressures faced by different parts of Wales, whether that’s a sparsely populated rural authority or an area with a growing and ageing population.”

Cllr Berriman said Powys had balanced its budget for the current year but warned the financial gap was widening in future years.

He added: “Fair funding will be essential if councils are to protect the services residents rely on.”

The review fulfils a commitment made by the Welsh Government as part of its first 100 days and was discussed with council leaders and the Welsh Local Government Association in July.

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