The funding was announced by communities secretary Sajid Javid as he confirmed the local government finance settlement for 2018-2019.
It follows consultation with local government representatives and the Rural Services Network which has repeatedly called for fairer funding for rural communities.
Mr Javid announced the settlement on Tuesday (6 February).
See also: Finance settlement due this week
He said: “I am committed to ensuring the needs of rural areas are met and recognise the particular costs of providing services in sparse rural areas.
“So in 2018 to 2019, in response to representations made since the provisional settlement, I will increase the Rural Services Delivery Grant by £31 million.”
This was £16 million more than proposed in the provisional settlement, said Mr Javid.
He added: “This will take the total to £81 million, a little over the 2016 to 2017 level and the highest it has ever been.”
The Rural Services Network welcomed the government's decision to release extra funding in next year’s finance settlement for rural councils.
RSN chief executive Graham Biggs said: “Both in our formal response to the provisional settlement for 2018/19 and in subsequent discussions direct with the Local Government Minister,
“We raised serious concerns about the proposed removal of transitional relief and about the gap in terms of government funding per head of population between urban and rural areas.
“We particularly raised deep concern about the funding of Adult Social Care Funding in rural areas.”
The announcement of £150m for an adult social care support grant plus an additional £16m for rural services was a clear measure of success for the network's representations.
“Indeed the Rural Services Network is specifically mention in the briefing pack issued by the Government,” said Mr Biggs.
Mr Javid's committment to ensuring the needs of rural areas were met and his recognition of the costs of providing services in sparse rural areas were particularly welcome, he added.
Mr Biggs said: “We will be watching closely to make sure they follow through to cash in council budgets with the new Needs Formula being developed for implementation in 2020-21.”
The full local government finance settlement for 2018-2019 can be seen here.
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