Whilst an allowance is made for sparsity in the allocation of resources for social care services in England, rurality is not a significant factor in health resource allocation. This lack of consistency in resource allocation criteria has become increasingly visible as health and social services departments are required to work in partnership across a range of areas. Differences in funding mechanisms also raise the question of why it is legitimate to make adjustments for rurality in the distribution of some public services, but not for others. Against this background, the present paper considers the case for a rural premium in health resource allocation which, it proposes, can be made on four grounds. First, there is evidence that the current National Health Service (NHS) formula introduces systematic biases in favour of urban areas in the way in which it expresses ‘need’ for healthcare. Secondly, the way in which the current system compensates for unavoidable variations in the costs of providing services takes insufficient account of the additional costs associated with rural service provision. Thirdly, with a growing emphasis on the need to attain national quality standards, rural primary care trusts and social services departments can no longer tolerate lower levels of services. Finally, a case for a rural premium can be made on the basis of precedent. England is the only country in the UK that does not make a major adjustment for rurality in its NHS formula. The paper concludes that the English NHS resource allocation system has done little to counter marked service deprivation in rural areas. Given evidence that rural local authorities also spend less on social care services and direct provision, this raises serious questions about the extent to which the needs of vulnerable people in English rural areas are being adequately served.