Farmers and rural businesses risk missing out on investment unless funding inequalities are addressed, MPs warn
Rural communities risk being sidelined under the government's devolution plans, with urban councils set to receive significantly more funding per head, a new cross-party report warns.
Analysis by the Rural Services Network (RSN) shows urban authorities are set to receive around 32% more government-funded spending power per person than rural councils in 2026-27.
Under the current Fair Funding model, rural councils are projected to see their spending power rise by just 2% by 2029-30, compared with 20% for urban authorities.
The figures feature in a report by the All-Party Parliamentary Group (APPG) for Rural Business and the Rural Powerhouse, which warns that countryside communities could miss out as more powers are devolved.
The report, Devolution and Its Impact on Rural Areas, sets out 21 recommendations aimed at securing fairer funding, stronger representation and greater investment in rural communities.
The inquiry was supported by the Country Land and Business Association (CLA) and chaired by Horsham MP John Milne.
Devolution gives regional and local authorities greater control over decisions affecting transport, housing, infrastructure and economic development.
For farmers and rural businesses, these decisions can influence investment, business expansion and access to essential services.
However, the APPG warns that existing funding inequalities and the higher costs of delivering services across dispersed communities could leave rural areas at a disadvantage.
Productivity in majority-rural authorities is around 8% below the England average, with the report estimating that closing the gap could add £22.5 billion to the economy.
Mr Milne said rural communities must be properly represented as new devolved structures take shape.
“Devolution could be a huge opportunity for rural communities, but only if it is designed with them in mind from the start.”
He called for fairer funding, stronger local government capacity and a legal requirement to assess the impact of policies on rural areas.
Among the report's main recommendations is making rural proofing a statutory requirement, supported by mandatory rural impact assessments and a dedicated Rural Commissioner.
It also proposes Rural Business Boards within combined authorities and reforms to funding formulas to better reflect the costs of providing services in remote areas.
Further recommendations include a national rural housing strategy, stronger planning resources and improved coordination of transport, infrastructure and essential services.
The government has previously acknowledged challenges facing countryside communities, including poor connectivity, housing shortages and barriers to economic growth.
In its July 2026 Future of Rural England report, Defra committed to strengthening rural proofing and ensuring rural priorities are reflected in local growth plans and devolved decision-making.
However, the APPG argues that stronger safeguards are needed to ensure rural businesses have a meaningful voice in decisions affecting their future.
CLA president Gavin Lane said rural communities should not be expected to operate within structures designed primarily around urban priorities.
“Rural businesses are tired of being overlooked and must not be expected to fit into a model designed around the needs of cities.”
He urged mayors and local authorities to work directly with rural businesses on transport, planning, housing, skills and land use.
The report calls for stronger rural representation and changes to funding arrangements to ensure countryside communities benefit from devolution rather than being overlooked.