The East Riding "Fair Funding" Mirage: Rural Communities Left on Life Support

East Riding “Short-Changed” by £62m Funding Hit as Services Face the Squeeze.

​The East Riding of Yorkshire is set to be "punished" by a £62 million funding hit over the next 3 years and £33 million a year there after, under new Government plans, sparking warnings from Liberal Democrat leaders that the region is being penalised for its rural and coastal geography.

​Despite mounting pressures on adult social care, children’s services, and local infrastructure, the new funding formula makes the East Riding one of the biggest losers among unitary authorities. Critics argue the settlement ignores the "rural penalty"—the higher cost of delivering services across a sprawling county—while shifting the financial burden onto local taxpayers.

​A "Flawed Formula" and the SEND Crisis

​Speaking at a recent Full Council meeting, Cllr Phil Redshaw (Cottingham North) didn't pull any punches, describing the reform as a calculated reduction in support.

​“This isn’t fair funding — it’s a massive funding cut dressed up as reform. East Riding is being penalised because the formula is deeply flawed. It ignores the real cost of delivering services across rural communities and the additional pressures of being a coastal authority.” Cllr Phil Redshaw 

​The impact is predicted to be most devastating for Special Educational Needs and Disabilities (SEND). While the national average increase for SEND funding is 6.4%, the East Riding—already the worst-funded of 150 local authorities for this service—will receive a mere 2% increase.

​“This settlement does not close the gap, it drives it wider. We face the prospect of having to both cut and fundamentally redesign many non-statutory services from scratch... Once reduced or dismantled, they are exceptionally hard, and costly, to rebuild.” Cllr Phil Redshaw 

​The "Council Tax Trap"

​The Government’s "Core Spending Power" figures have been labeled a "fantasy" by Liberal Democrats. The figures assume that local councils will hike Council Tax by the maximum 4.99%, essentially forcing local residents to plug the gap left by national underfunding.

The Liberal Democrats have already told the government that this strategy places local authorities in an impossible situation.

​“The Government is putting councils in an invidious position, effectively forcing them to choose between cutting frontline services or hiking council tax during a cost-of-living crisis,” Daisy Cooper MP 

​Rural Communities "Left on Life Support"

​The removal of "remoteness" factors from funding formulas suggests a shift toward urban-centric planning. This means the higher costs of providing care to a remote Wolds village or maintaining crumbling rural roads are being ignored.

"This is not a "normal budget cycle." The scale of the cuts may force the council to rebuild non-statutory services, the ones that keep our streets clean, our roads usable, and our economy moving from scratch. Once reduced or dismantled, these services are exceptionally hard and costly to rebuild." Cllr Phil Redshaw 

​“This funding cut will be felt in towns and villages right across the East Riding. Residents already see the pressure on adult social care, SEND support and local transport, and this settlement makes those pressures even worse. Rural and coastal communities like ours cannot be treated as an afterthought.” Cllr Denis Healy, Leader of the Liberal Democrat Group at East Riding of Yorkshire Council.

Motion to full Council. 

​Council members have officially backed a motion demanding the government scrap this settlement in favor of a "genuinely needs-based system" that protects East Riding families.

​The Liberal Democrat Alternative

​In response to the crisis, the Liberal Democrats have proposed a fundamental shift in how local government is financed, moving away from the "begging bowl" culture of short-term grants. The Liberal Democrat Alternative focuses on:

​Restoring the Rural Services Grant: Acknowledging the true cost of distance and geography in service delivery.

​Multi-Year Settlements: Providing long-term, predictable funding so councils can plan for the future rather than managing year-to-year crises.

​Genuinely Needs-Based Funding: Reforming the formula to account for the East Riding's disproportionately high retired population and its unique coastal challenges.

​As the East Riding faces a cumulative deficit in the Dedicated Schools Grant estimated to reach £130 million by 2031, Liberal Democrat councillors have backed a motion calling on the Government to scrap the current settlement.

​“Unlike the Labour Group, we do not accept our communities being shortchanged,” said Cllr Redshaw.” Cllr Phil Redshaw.