MUCH more must be done if Defra is to achieve its target of a fair deal for rural businesses and communities, MPs have warned.

Countryside communities are getting a raw deal from the government, warns a report by the House of Commons Environment, Food and Rural Affairs Committee.

The document, which follows an inquiry scrutinising Defra and its Rural Communities Policy Unit, was published on Wednesday (24 July).

"The government needs to recognise that the current system of calculating the local government finance settlement is deeply unfair to rural areas in comparison with their urban counterparts," said committee chair Anne McIntosh MP.

"This is unacceptable.

"Rural communities pay more in council tax, receive less government grant and have access to fewer public services than people in large towns and cities."

The report says Defra must work with the Department for Communities and Local Government to ensure future settlements recognise that it costs more to provide services to rural areas.

The so-called "rural premium" is highlighted across a number of sectors:

School funding

The extra cost of providing services to rural communities is evident across the public sector.

Yet, in 2012-13 rural local authorities received less than half the per head funding that urban authorities got.

In areas such as education, the government is reducing local authorities' flexibility to allocate extra funding to small rural schools with higher running costs.

Broadband

Rural businesses, schools and households have fallen behind their urban counterparts when it comes to broadband access.

The government's Rural Broadband Programme is running nearly two years behind schedule.

The roll-out of superfast broadband to 90% of rural areas will be delivered late and it is unclear when the target of universal access to 2Mbps broadband will be achieved.

Mobile

The lack of mobile phone coverage in large parts of the countryside is unacceptable.

The Mobile Infrastructure Project aims to help 60,000 premises currently in voice 'not-spots' but this is a significant reduction in scale from the project's original aim of extending coverage to up to six million people.

The revised scheme may also do little to improve geographic coverage.

Almost 30% of England lacks 2G coverage from all four of the main mobile phone operators – this figure rises to nearly 70% for 3G services.

Housing

Parts of rural England can be some of the most unaffordable places to live in the country.

On average people working in rural areas earn less than those working in urban areas but rural homes are more expensive than urban ones.

According to Halifax rural house prices have risen 35% faster in the countryside than in urban areas over the last decade – the average rural house price is now £30,000 higher than its urban equivalent.

Defra has made growing the rural economy its top priority, but barriers to be overcome include improving rural businesses' access to finance.

The Rural Services Network, which represents more than 100 local authorities and over 100 other rural organisations, has called for government action following the report.

Rural Services Network chief executive Graham Biggs MBE said: "We have long campaigned for a fairer deal for England's rural communities."

He added: "This report really drives home the added cost and challenges of delivering public services in rural areas where local authorities have to deliver more with less.

"The government is moving too slowly to relieve this problem - rural residents continue to pay more council tax for fewer services because of historic underfunding."

"We fully endorse the report's call for the government to ensure that future settlements recognise the premium that exists in the provision of services to rural areas. It is time for action."

A Defra spokesperson said: "We want our rural communities to be great places to live and work, which is why we're investing in rural broadband, mobile coverage and providing funding to develop and grow rural businesses.

"The government is helping hardworking people all over the country who aspire to own a home through Help to Buy, which will help people get onto the housing ladder and boost housebuilding wherever there are housing shortages."