The rural economy could add another £43bn to the UK economy if the rural productivity gap of 18% could be closed. This is the headline conclusion of the All-Party Parliamentary Group for Rural Business and the Rural Powerhouse in its report Levelling up the rural economy: an inquiry into rural productivity. This report is important because it looks at the factors holding back the rural economy. It also draws on a range of high-quality evidence. Where are the problems? What does this mean for investors? Some of the issues will be recognised by urban planners and developers.
Planning
National planning policy needs to deal with economic growth in rural areas explicitly and directly. Small housing developments should be favoured, with an emphasis on affordable housing. Permission in principle should be used, to shift upfront costs to a later stage in the development process. Planners need to understand the needs of the rural economy better and every authority in England and Wales needs funding for an extra planning officer.
Tax
The Country Land and Business Association has been proposing the idea of a simple rural business unit for diversified rural businesses for many years. With the CLA having supported the work of the APPG, it comes as no surprise that the report includes this recommendation, but the proposal has no less virtue for that. Problems arise when farmers diversify. Mixed rural estates where in-house economic activity sits alongside property letting also find sound business planning distorted by the vagaries of the tax system.
Connectivity
Network coverage and high-speed internet access are the obvious calls here, but they are joined by the need for better access to training in digital skills.
Farming
The first two recommendations concern the need for high-quality advice and a long-term plan for future grant and support schemes. The imbalance in negotiating power between major supermarkets and farmers must be addressed. Pilot work on the Seasonal Workers Scheme must be extended. The APPG also calls for the appointment of a specialist agricultural attaché to every UK team negotiating a free trade agreement.
Skills
Skills must be raised if the rural productivity gap is to be closed. The Rural Development Programme for England previously allocated specific funds for rural training. The UK Shared Prosperity Fund must continue this. Training vouchers should be provided, particularly during the post-Brexit agricultural transition period. Nature-based finance opportunities need specific training and personal development if the opportunities are to be grasped. The UKSPF should be used to support shared community transport schemes – including Wheels to Work – to aid apprenticeships, for example.
Process, policy and governance
The APPG calls for a minister-led, cross-department group to drive policies to raise productivity throughout the rural economy. This needs to be supported by a rural productivity unit in every relevant ministry. The Department for Environment, Food & Rural Affairs must adopt a strategic objective to improve productivity in rural environments with the specific task of growing the rural economy. Local Enterprise Partnerships must have at least one rural business representative on their leadership boards where they include a rural constituency. Rural-proofing must be strengthened, and this must be led by the Cabinet Office.
The report should be welcomed and the work of the CLA in sponsoring its development applauded, particularly at a time when we seem more confused than ever about what our countryside is for. A rewilding opportunity to salve the consciences of media personalities and the very wealthy? A carbon sink to ease our collective conscience on consumption?
There does remain a huge gap in our national strategic understanding of what we want to do with our countryside and the rural economy, which is enormously frustrating to those charged with its stewardship. In theory, the task is simple. Our rural land has a vital role in providing us with food and water, air we can breathe, an opportunity to make a decent living, homes, the benevolence of rural recreation and exposure to the natural world and, of course, raw materials and land for development.
But as a nation we do not plan sensibly for this. Rather it is a free-for-all: trees here, rewilding there, farming where? We now have a new Agriculture Act, a new Environment Act and considerably greater freedom to plan our destiny beyond the reach of the EU. We have targets to become carbon neutral, we know how many trees we want to plant, we have ideas about the future role of our farming industry, we have an idea of how much land must be diverted to urban development.
There is a big gap around food despite the National Food Strategy and last year’s report on food security. Just how many calories do we want to produce in the UK, and what sort of calories? With this information we could start to think more sensibly about the structure and needs of the agricultural industry. Meanwhile, farmers continue to suffer in the grip of uncertainty and at the hands of hard-grinding supply chains. Tenant farmers must bear much of the brunt of this. Some have next to no security in the tenure of their holdings, with little capital underpinning their choices. Latest figures from Defra point to a loss of 3% of land from the tenanted sector last year. Anecdotally, more tenants are under notice to lose their land, as owners seek to secure flexibility in their own future options.
Despite these reservations, the APPG has reached some important conclusions. The obvious scope for improvement must mean that the right sectors in the rural economy are ripe for investment.
The report is available here
Charles Cowap is a rural practice chartered surveyor
