Local authorities in Wales must 'think and act differently' to deal with spending cuts and other challenges, the Auditor General for Wales has concluded.
Adrian Crompton says reductions in public spending, socio-economic change, poor infrastructure and ongoing challenges of service delivery are affecting the 600,000 people who live in Wales.
His report found poor infrastructure and the loss of the cornerstones of village life such as banks and post offices were causing challenges and councils are struggling to find 'sustainable ways to help'.
Too often councils continue to deliver a ‘one-size fits all approach’ which is creating and reinforcing rural inequality.
The report calls for better liaison and cooperation between public, private and voluntary sector providers, including the development of multi-purpose, cross-sector hubs.
It says public bodies also need to do more to equip citizens and communities to become more resilient and self-reliant as public finances continue to reduce.
Mr Crompton said: 'I urge public bodies to find collaborative and sustainable solutions to address rural inequality before an issue turns into a crisis.
'With an ageing population, a move to more online self-service and the changing nature of the high street, councils need to work with citizens, the third sector and with public sector partners to maximise their resources to better serve rural communities.'