Angela Rayner has come under fire over a funding shake-up that critics claim unfairly favours Labour strongholds while urban areas face higher council tax increases and cutbacks.

The Deputy Prime Minister announced a £69 billion funding package for councils across England, promising an average real-terms increase of 3.5 percent.

Her department said the changes would tackle inequalities and create a “more efficient” system by directing cash to areas with higher levels of deprivation.

But rural councils and critics say the plan disproportionately benefits Labour-led towns and cities while countryside communities are left struggling with real-terms cuts, The Telegraph reports.

The County Councils Network (CCN), representing rural authorities, warned the changes would leave rural councils worse off and force them to hike council taxes to balance budgets.

Barry Lewis, vice-chairman of the CCN, accused the Government of “cherry-picking” urban councils for financial boosts at the expense of rural communities.

“With rising demand and additional costs, county authorities will effectively be in a worse position than before the autumn Budget,” he said.

“Rural councils will have little option but to reduce services next year, including in social care, whilst increasing council tax.”

While Rayner’s package includes a five percent increase for areas with significant rural populations, the CCN said these gains will be wiped out by the recent 6.7 percent rise in the minimum wage.

A £600 million “recovery grant” to help councils with spiralling costs was also criticised. More than half of the fund is going to 34 out of 36 metropolitan borough councils, with just three rural councils receiving any of the money, according to the CCN.

An analysis by the Institute for Government (IfG) also found the funding disproportionately benefits urban areas.

Most urban councils are set to receive an average real-terms increase of 3.6 percent, while most rural councils will see only a two percent rise.

Manchester and Liverpool, both Labour-led cities, are among the biggest winners, with their core spending power set to rise by seven percent after inflation. Meanwhile, 132 shire district councils across England will see their funding remain flat, amounting to a 2.4 percent cut in real terms.

The IfG concluded: “Core spending power is set to increase 1.8 times as much for the most urban areas compared to the most rural ones.”

Kevin Hollinrake, Shadow Local Government Secretary, called the move “yet another betrayal” of rural communities, accusing Labour of prioritising urban areas for political gain.

“They have nothing to offer rural Britain other than lies, broken pledges, and empty promises,” he said.

“Labour don’t understand the countryside or they are intent on destroying it. Either way, our green and pleasant land is under threat from this union-led left-wing government.”

However, Rayner defended the plans, insisting they would tackle deprivation and end postcode lotteries in council funding.

“We are determined to deliver fairer funding, meaning everyone gets the support from public services they deserve,” she said.

The Department for Housing, Communities and Local Government has been approached for further comment.

When uinveiling the policy this week, Ms Rayner said:”Local leaders are central to our mission to deliver change for hard-working people in every corner of the country through our Plan for Change, and I know our councils are doing everything they can to stay afloat and provide for their communities day in day out.

“We won’t take the easy option or shy away from the hard work needed to rebuild a more effective and efficient system. These kind of reforms won’t happen overnight, but we are determined to deliver fairer funding, ending postcode lotteries meaning everyone gets the support from public services they deserve.”

Minister of State for Local Government and English Devolution, Jim McMahon said: “We know councils are calling out for help which is why we have prioritised this vital increase in funding, but we must stop taxpayers’ money being thrown into a broken system.

“As a former council leader I know too well that councils have suffered from short-term solutions. But we will fix this outdated system, turning to our partners in local government, working hand in hand to bring ambitious reform and do the long-term, necessary work to rebuild the foundations, and crucially, trust.”