 |  | People living in rural parts of England are increasingly paying more council tax than city residents, but receiving fewer services, according to a new report.
The research produced for the campaign group Sparse showed spending in less populated areas at 90% of the national average although residents were paying 2-3% more in council tax.
In contrast, people in inner London saw 40% more cash spent on services than the national level even though their council tax was just 82-86% of the average.
The study also suggests that the gap between rural areas and inner city councils is widening.
Sparse, which represents some of the country's 50 most rural local authorities, argued the disparity was caused by the way the Government distributed grants.
The difference between their council tax levels and those of city authorities pointed to "plain fiscal unfairness", Sparse said.
Councillor Steven Pugsley, co-chairman of Sparse, said: 'We are calling on ministers to close the widening council tax gap between city areas and the countryside - as things stand, we are confronted by plain fiscal unfairness." The way the government grant was distributed allowed urban councils to spend more than those in rural areas but to charge less in council tax, he said. "The whole of the government's rural strategy is severely undermined by the way in which country dwellers have to pay more to get fewer services." Cllr Pugsley said: "The report notes that the grant system fails to reflect properly the effects of rural deprivation and population dispersal on the cost of providing services to far-flung rural communities." Any changes to the council tax system, such as the introduction of new bands, should not be allowed to worsen the "already ill-favoured" position of rural areas, he said. "Now is the time for the government to adjust the system better to reflect the higher costs associated with providing local services to country communities."
Sparse is submitting the report to an independent inquiry into tax reform.
Sir Michael Lyons, the director of the University of Birmingham's Institute of Local Government Studies, is heading the government-ordered inquiry into tax reform. The inquiry follows the release of the government's Balance of Funding Review last month.
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