Backbench MPs have disputed Government claims that yesterday’s local government finance settlement is ‘fair to all parts of the country’.

The settlement included an increased grant worth £9.5m to help rural councils drive efficiency.

But Lib Dem MP for St Ives Andrew George said: ‘I am sorry to say that, once again, the adjustment in the settlement is chicken feed when it comes to addressing the inequality between rural and urban areas.’

Local government minister Brandon Lewis replied: ‘I appreciate the point made by members about the need to narrow the gap between rural and urban areas, but they should appreciate that we are acting against the backdrop of the financial mess in which we were left by the last Government and with which we now have to deal.

‘Obviously, that somewhat restricts our room for manoeuvre.’

Birmingham MP Jack Dromey spoke up for urban areas and said: ‘Birmingham is reeling from the biggest cuts in local government history, totalling £840m, and the other core cities have also been particularly hard hit.’

Stalybridge and Hyde MP Jonathan Reynolds added: ‘There is no doubt that, either by accident or design, this Government has redistributed money from poorer areas towards the more affluent ones.’

Labour’s Steve Rotheram said: ‘It is farcical for the minister to try to spin this as a good day for local government.’

And Blyth Valley MP Ronnie Campbell said: ‘The minister [Brandon Lewis] is living in cloud cuckoo land.’