RURAL communities are being unfairly disadvantaged by the latest local government finance settlement, which favours urban areas, according to analysis by the Rural Services Network.

The network, supported by Herefordshire Council, highlights that the funding model fails to account for the unique challenges and higher operational costs faced by rural authorities like Herefordshire.

According to the network, government-funded spending power in urban areas is 41 per cent higher than in predominantly rural regions.

The removal of the Rural Services Delivery Grant, previously worth £7 million to Herefordshire Council in 2024/25, has further compounded the issue.

That funding has been repurposed into a new £600 million recovery grant, which disproportionately benefits urban areas—allocating over seven times more funding to them than to rural counterparts.

Analysis has revealed stark disparities in funding between rural and urban areas under the latest local government finance settlement.

On average, residents in rural communities pay 20 per cent more in council tax than their urban counterparts. Despite this higher contribution, government funding per head in Herefordshire is set to decrease by 3.14 per cent in 2025/26, while urban areas will see an average increase of 8.21 per cent.

The proportion of government-funded spending per head in Herefordshire will be just 36 per cent, compared to the national average of 44 per cent, highlighting the significant funding imbalance faced by rural authorities.

Councillor Peter Stoddart, cabinet member for finance and corporate services, said: “The current funding allocation unfairly favours urban areas. As a result, we’ve had to make the difficult decision to increase council tax more than planned to maintain vital services for our communities. We urge the government to engage with rural authorities and address this inequity.”

The council and RSN have called on the government to review the settlement and implement a fairer funding model that considers the unique demands of rural areas.