The Pillars of Communities report compiles 30 years of data to reveal the level of access to professionals working in 10 basic services, such as health and education, in towns with populations between 200 and 5000.

While there were signs of progress in some areas, a report card produced alongside Pillars of Communities gave an 'F' grade for access to psychologists, dentists and preschool teachers.

The report was produced by the Regional Australia Institute and chief executive Jack Archer said accessibility problems corresponded with high mental health issues, poor dental health outcomes and early development problems in small and remote towns.

"A big part of the reason why we're not solving these problems is that we just don't have the people in these communities to make it happen," he said.

Between 1981 and 2011, the percentage of small towns with a preschool teacher dropped from 25 to 16 per cent, while dentists dropped from 9 to 5 per cent.

The percentage of remote towns with psychiatrists dropped from 24 to 11 per cent in the same period, however, small towns overall saw an increase from 1 to 6 per cent.

Pillars of Communities also revealed a greater proportion of Australians (8.5 per cent) lived in small towns in 2011 compared to 1981 and Mr Archer said a key takeaway was the gap wasn't being closed.

"What we're also seeing is that inner regional areas are growing much faster than the rural and remote areas where we have really poor health and education outcomes," he said.

The latest Commonwealth budget allocated $2 billion over four years for workforce and incentive programs to increase the numbers of health delivery professionals in rural and remote areas.

Pillars of Communities did show signs of improvement in some basic services, with general practitioners, primary school teachers and high school teachers all scoring a 'B' on the report card.

Only 14 per cent of small towns had a general practitioner in 1981 but that figure rose to 18 per cent by 2011.

And while there's been a slight drop in the percentage of towns with primary and secondary school teachers overall, there's been a significant increase for towns with populations between 1000 and 5000.

Mr Archer said there could be costly consequences for those who live in small towns and governments without improvement in areas identified in Pillars of Communities

He added there was greater scope for more community-driven approaches rather than top-down solutions.

"Sometimes what looks like the solution in Canberra isn't actually the solution when you get out to these communities," he said.

"If communities can take ownership of these issues and identify solutions, governments really should back those. I think it's going to be cheaper and more effective in the long term."