Rural councils are facing a funding crisis and need a fairer local government finance settlement, a group including the MP for Beverley and Holderness has claimed.

The MPs said many local authorities in the countryside faced higher costs to deliver services than urban councils, while many rural areas generally had more elderly people who required care.

Tory Graham Stuart, MP for Beverley and Holderness, said councils faced “immense pressure”, telling the House of Commons that there was a “rural penalty” that saw councils in towns and cities get 50 per cent more per head in government funding, a gap which he described as “indefensible”.

He said: “We are looking for a fairer settlement. We hoped and expected that this government was going to look at doing so on an evidential basis.

“We are not seeing that. It is not good enough. Certainly, everyone on this side of the House (Tories) supports the need for austerity, we support state control of the spending envelope, we are not arguing for greater government spending. We are saying that at a time of limited resources, the allocation of those resources is more not less important.”

Communities and Local Government minister Brandon Lewis said: “It is clear that we have actually managed to reduce the gap between rural and urban. We’ve made adjustments to the relative needs formula to reflect the greater cost of providing services in rural areas, one of only three formula changes in the settlement.”