RURAL local authorities remain worse off than their urban counterparts – despite an additional £8.5m grant.

The additional one-off £8.5m still meant that the total grant to rural authorities had fallen by about 2% more than that to urban authorities, said the Rural Services Network.

This was despite a summer consultation that showed gains of more than £30m for the most sparsely-populated areas – gains that were reversed by the government's damping mechanism.

Rural authorities are therefore some £70m worse off than they might reasonably have expected to be, according to network calculations.

With so few discretionary services left, rural authorities faced deep cuts into their basic provision while their residents already paid higher council taxes than urban dwellers, it said.

The warning came as MPs prepared to discuss the local government finance settlement for rural authorities on Monday (11 February).

The network said it also noted that the additional resources for rural fire authorities within the £8.5m – just £232k – still leaves rural fire services substantially under-resourced.

"Having recognised the strength of our case, we are naturally disappointed that the government has not made the additional funding a permanent feature of the system," the network said.

A statement from the network said it looked as if the government intended to preserve the main funding distribution until 2020.

"It is nonsensical to produce formulae [and] then make no progress towards implementing them for six years," it said.

"Presumably in 2020 we shall be told that there is only room for a small further re-distribution before we freeze for another six years?

"The simple truth is that the Government has decided that its priority is to pour resources into the urban south east in direct contradiction to where its formulae say they should go.

"We also remain deeply concerned that the new business rate retention scheme will operate to the serious disadvantage of rural areas, particularly those furthest from major transport links.

"With the best will in the world many rural areas will be unable to attract major business ratepayers to the same extent as other parts of the country."