Has rural proofing had any impact on the budget or the CSR? Rural people are entitled to ask, and to be worried.
The Government has re-set the ‘rules’ within which the state will operate its fiscal responsibility back to something very similar to those defined by Gordon Brown many years ago. It is crucial that these are understood in relation to rural people, rural communities, and services that rural people need to access.
In shorthand what these rules say is that Government will keep revenue expenditure in line with what can be raised each year through taxes. Capital spending, however, is more flexible as it is seen as investment for a period into the future. This justifies expenditure to be supported from borrowing. Revenue is carefully constrained, but capital has a little more flexibility.
Impact on rural areas
What is clear from the 2021 Spending Review is that capital spending will continue to be focused almost exclusively on urban areas. Almost all the major projects listed from the Levelling Up Fund are urban. Wherever details are given for departmental spend, such as new schools, hospitals and college buildings these are also urban. Almost all the capital spending identified to help support the hospitality industry through improved museums, major venues and attractions is also urban. This is logical as these centres should serve rural areas around them.
However, it is revenue expenditure that is needed to make it possible for people living in rural areas both to benefit from capital projects in nearby towns and cities and to receive an equivalent quality of services. There is no commitment to the expenditure needed to improve rural transport and the ability of those without a car to reach urban centres, no rural uplift to social care budgets that would meet the extra cost of serving people in more remote parts, no help for youngsters to enable them to access the shiny new urban schools and colleges, and no mention of the investment that will be needed in rural power networks to enable them to keep pace with the transition to zero emission vehicles. Perhaps most disappointing of all, there is still no allocation of the remaining £3.5b promised for achieving Project Gigabit in rural areas by 2025.
Boris Johnson promised during his campaign to become leader of the Conservative Party that 100% of UK homes would have access to high quality broadband by 2025. He repeated that promise in the 2019 General Election campaign. Based on this budget, many rural areas will still be poorly connected by 2025, both physically and digitally, and as a result many more young people and businesses will continue to choose to move away from rural areas.