DEFRA must do more to ensure a fair deal for rural businesses and communities, an influential group of MPs has warned.

The Environment, Food and Rural Affairs Committee said much must be done for DEFRA to achieve its target of “fair, practical and affordable outcomes” for people in the countryside.

The warning came in a committee report following an inquiry scrutinising the work of DEFRA and its Rural Communities Policy Unit.

DEFRA has made growing the rural economy its top priority, but the document says many rural businesses still lack adequate access to finance.

The government should recognise that the current system of calculating the local government finance settlement is deeply unfair to rural areas when compared with their urban counterparts.

“This is unacceptable,” said committee chair Anne McIntosh MP.

“Rural communities pay more in council tax, receive fewer government grants and have access to fewer public services than people in large towns and cities.”

DEFRA must work with colleagues in other government departments to ensure that future settlements recognise the premium that exists in the provision of services to rural areas, the report says.

It cost more to provide services to rural communities, yet rural local authorities received less than half the per-head funding received by urban authorities 2012-13, says the report.

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

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.

Ms McIntosh said: “Broadband has become a basic utility, yet thousands of people in rural communities have ridiculously slow speeds or no connection at all.

“The Universal Service Commitment of 2Mbps is crucial and meeting it must be prioritised over increasing speeds for those who already enjoy an adequate service.

“The government must be clear when broadband will be available to those currently without access.”

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

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.

Ms McIntosh said: “We are concerned that in focusing on reducing the number of premises in ‘not-spots’, which may already have landline access, large parts of the countryside and those who work in it may still be left without access to mobile technology.”

A lack of affordable rural housing is seen as a problem, too. Parts of rural England can be some of the most unaffordable places to live in the country, the report says.

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 than those in urban areas during the past decade – the average rural house price is now £30,000 higher than its urban equivalent.

Ms McIntosh said: “Rural England desperately needs more affordable housing, yet the government’s housing policies give insufficient regard to the needs of rural communities.

“Failure to provide more of the right housing at the right price and in the right place will exacerbate the existing problems of unaffordability and inequality in parts of rural England.”

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 on the housing ladder and boost house building wherever there are housing shortages.”

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