THE government says it accepts that rural areas are underfunded when it comes to delivering public services.

Andrew Lansley, Leader of the House of Commons, said he acknowledged that the local government settlement was a "matter of concern" to MPs.

Mr Lansley was responding to a parliamentary question from Ian Liddell-Grainger, Conservative MP for Bridgwater and West Somerset.

Mr Liddell-Grainger had asked for a debate discuss the difference between urban money and rural money before next year's money.

"That still presents a problem, and now is the time to discuss it so that we can get it right for next year," said Mr Liddell-Grainger.

Mr Lansley replied: "That is a matter of concern to many members, including my honourable friends at the Department for Communities and Local Government.

"Ministers agree that the evidence shows that rural areas are comparatively underfunded, and that a correction should be applied so that there is proper recognition of the additional costs of delivering services in rural areas.

"I will not elaborate on the details of those adjustments, although I could do so.

"Although we will want to have transitional stability in local government, the government recognise that such costs need to be understood and reflected in the formula."

Mr Lansley's response came after more than 45 MPs called on the government to reconsider the impact its funding settlement will have on rural communities.

Rural councils will face a bigger reduction in central grant and spending power than urban councils, according to an analysis by the Rural Services Network.

Services under threat of cuts include care for the elderly and children, local bus routes, libraries, and leisure centres, it has warned.

Some 25 MPs have now signed an Early Day Motion calling for an urgent review of the impact on rural areas of the Local Government Finance Settlement announced on 19 December.

The EDMA notes that central government funding for local authorities is already 50% higher per head of population in urban areas than rural areas.

It further recognises that the 50% funding gap is justified by neither need nor cost and notes the additional expense of delivering services in sparsely populated areas.

The EDM was proposed by Graham Stuart, MP for Beverley and Holderness, who is chairman of the cross-party Rural Fair Share campaign.

The campaign urges the government to implement a settlement for 2013-2014 which closes the rural to urban funding gap.

It also wants the government to set out plans to reduce the rural to urban council funding gap from 50% to no more than 40% by 2020.