INADEQUATE funding for public services is among a raft of challenges faced by countryside communities.

The warning is contained in a final letter sent to Defra secretary Owen Paterson by the Commission for Rural Communities before it stopped work at the end of March.

Abolished as a cost-cutting measure by the coalition government, the commission is being replaced by a Rural Communities Policy Unit within Defra.

The final letter was written by commission chairman Stuart Burgess (pictured), as a means of setting out the watchdog's thoughts about issues facing rural communities.

It praises the government's rural statement, saying it sends our a clear message about the government's commitment to the interests of rural communities.

The letter says the statement makes clear that policies should be 'rural-proofed' so countryside communities receive fair treatment – and services which do not disadvantage rural areas.

But the letter also outlines a number of challenges faced by rural communities.

Proposed changes to funding formulae for some local authority services, such as funding for social care, could have benefitted rural areas, says the letter.

"However, we were disappointed that most of the proposed increases were 'damped out' when funding allocations for 2013-14 were announced," it continues.

Continued discrepancies between urban and rural funding have been highlighted by the Rural Services Network, and the commission says it hopes the government will address them.

The letter says the commission appreciates that the government has difficult choices to make over welfare reform at a time when economic growth and fiscal consolidation are so important.

"Our research shows that incomes, and poverty levels, while generally higher in rural areas compared to urban, are significantly lower in the sparse areas," it says.

Hidden poverty and disadvantage exist even in the most affluent rural areas, adds the letter.

"Child poverty is lower in rural areas, but is projected to rise, mainly as a result of the decision not to increase benefits in line with inflation."

The letter repeats calls for the government to ensure a co-ordinated approach to improving services and choices for rural youngsters by appointing a minister for Youth Affairs.

It also voices misgivings about changes to school funding formulae, which place more emphasis on the pupil-weighted element at the cost of reducing funding for fixed costs.

"Whilst we understand that this has been done in the interests of increasing competition, we contend that competition is not such an issue in rural areas," the letter says.

The commission has asked for the government to review the effects of the formula on small rural schools, many of which feel that their viability is being put at risk.

Other challenges highlighted by the letter include rural fuel poverty, health and social care, transport, housing and rural broadband.

"Overall, the [commission] has strongly supported your endeavours to ensure rural communities are not disadvantaged compared to those in urban areas," the letter says.

"We hope that you will be successful in ensuring that funding levels, and rural-proofing policies, reflect these objectives in the future."