Rural inhabitants risk becoming “second-class” citizens in the digital revolution as urban dwellers benefit from next-generation broadband and 5G mobile, MPs have said.

The report by the Commons environment, food and rural affairs select committee said that the government has failed to grasp the extent of the digital divide in the provision of broadband and mobile services.

Almost 600,000 “forgotten homes” in rural areas across the UK are still unable to get sufficiently fast broadband to meet a typical family’s needs – from watching Netflix to browsing YouTube.

In England and Wales 6.6% of premises do not receive the 10Mbps internet service the government has mandated as the bare minimum to cover a family’s modern digital needs, compared with just 0.7% in cities and towns. In Scotland, 19% of homes in rural areas don’t get decent internet while in Northern Ireland the figure stands at about 15%.

 “Digital connectivity is now regarded by many as an essential utility, with many in rural areas struggling to live a modern lifestyle without it,” said Neil Parish, the chairman of the committee. “Poor broadband and mobile data services continue to marginalise rural communities, particularly those in hard to reach areas.”

The report said that the government’s target of a 10Mbps internet service as a bare minimum to cover modern digital needs lets down rural families as new technologies and demand for internet services makes such a speed inadequate and obsolete.

Digital technologies can be valuable tools to improve public services and reduce health and social inequalities, but should not be adopted as “fashion trends” that leave some people behind.

While new technologies like chatbots or artificial intelligence (AI) get a lot of attention, experts at a recent Guardian roundtable event, supported by DXC Technology, agreed digital services should be adopted only when they can genuinely make systems more efficient for staff or end users.

It’s also vital to ensure digital improvements benefit vulnerable groups, and there should be a range of ways to access public services, rather than simply switching to digital-by-default, agreed the panel. In 2018 there were still 5.3 million adults in the UK who were digitally excluded because they lack internet access or have low levels of digital literacy, including people from low-income groups, the elderly, and those living in rural communities.

“Before we even get to the technical barriers there are access barriers as a direct result of poverty or low income,” said Emma Revie, chief executive of the Trussell Trust. “[Digital public services] shouldn’t be just another thing people are excluded from.”

Millions of households without internet access pay an average of £440 more a year for essential goods and services such as energy, telecommunications and banking, research reveals.

The financial penalty of continuing to access key services offline, as companies attempt to shift away from paper billing, represents 4.4% of average household income, rising to 5.4% for the poorest 10% in society, including older and vulnerable people.

Householders who cannot take advantage of lower energy and telecoms tariffs for switching to online-only services miss out on a potential annual saving of £139, the Centre for Economics and Business Research found. The lower pricing associated with online accounts is also often not available to those who manage their household bills by post or phone, pay by cash or cheque or have a prepayment tariff or meter arrangement with their utility provider.

The research was carried out for campaign group Keep Me Posted, which is seeking to safeguard consumers’ right not to be forced to receive only online bills and statements.

Internet access has almost doubled over the past decade, with the number of users increasing from 46% of the UK population in 2003 to 83% in 2013. However, there are still seven million people in the UK who have never used the internet, including five million people who are over 65 or vulnerable.