How can the UK Government support our rural entrepreneurs?

Rural Wales, house by a river

By Steven McGinty

Rural businesses play a significant role in the UK economy. Yet, policymakers often overlook their contribution and, as such, have failed to realise the economic opportunities in many of our rural areas.

Last year, University of Essex researcher Anupriya Misra presented an insightful webinar (register to hear a recording of the webinar) outlining some of the key challenges facing rural entrepreneurs, as well as the likely drivers of growth.

The make-up of the rural economy

Research by the House of Lords Library shows that the rural economy accounts for approximately 20% of England’s total economic activity, an estimated £229 billion.

Unsurprisingly, one of the key differences between city and rural economies is the size of the agriculture, forestry, and fishing sectors. In England, they amount to 2% of the Gross Value Added (GVA) of the rural economy. However, in rural areas classed as ‘sparsely populated’ this figure significantly increases, with these industries accounting for 32% of registered local businesses.

In Scotland and Northern Ireland, agriculture, forestry, and fishing play a more prominent role in the rural economy. In Scotland, 13 out of its 32 local authorities have more than 50% of their population living in rural areas, with these councils contributing 20.6% of Scotland’s GVA. In Northern Ireland, 25% of VAT registered businesses are involved in agriculture, forestry, and fishing, and outside of Belfast, it’s the largest industry in each local authority area.

The challenges for rural entrepreneurs

Many rural businesses have a strong entrepreneurial spirit, and the products they sell make up a significant proportion of UK exports. For example, 25% of Britain’s goods exporters are registered in rural areas. Nevertheless, these rural entrepreneurs can face barriers their counterparts living in cities are far less likely to experience. This includes:

  • Slow broadband – Online rural businesses can be particularly affected by slow broadband speeds. In addition, businesses involved in the tourism industry are affected, as free wi-fi is becoming an increasingly important part of the visitor experience.
  • Skills shortages – Rural businesses in sparsely populated areas can struggle to recruit the right staff, and their existing staff can experience challenges accessing training and development opportunities.
  • Poor transport infrastructure – Poor infrastructure can make it challenging for rural businesses to recruit, as well as connect to suppliers and customers in larger urban centres.
  • Difficulty accessing finance – Lower land values in rural areas can also limit a business’s ability to provide collateral for loans.

Why do some rural areas do better than others?

An interesting question raised by webinar presenter Anupriya Misra is why do some rural areas outperform others? In her view, a mixture of supply and demand factors impact on an area’s economic performance. For instance, having access to high skilled labour, good transport links to cities, beneficial planning laws, and business support are very important for supporting rural economic growth.

Additionally, rural areas which have a wealthy local population or have products with strong global demand are also likely to be high performing.

Business advice and networking

A key theme to emerge from the webinar was the important role business advice and networking plays for rural entrepreneurs. Fledgling rural businesses will often need a range of support, including help to develop their business management skills (such as basic accountancy skills), legal advice, as well as guidance on grant writing and the funding opportunities available to them.

Entrepreneurs looking to grow their business, will need other forms of support, from help to develop an online marketing strategy to advice on providing great customer service. Informal networks, and opportunities to connect with other business owners, can also be an invaluable resource.

In 2012, the Department for Environment, Food and Rural Affairs (Defra) set up the Rural Growth Network (RGN) Pilot Initiative to help rural areas overcome the barriers they faced.  This included projects in Cumbria, Heart of the South West (HotSW), North East, Swindon and Wiltshire, and Warwickshire. In practice, this involved creating a network of ‘enterprise hubs’, offering rural businesses a mix of premises, business, and infrastructure support.

An evaluation of the initiative highlighted that introducing enterprise hubs brought several benefits to rural entrepreneurs. 70% of start-up founders surveyed reported an improvement in their business skills and half reported that they improved their networking with other firms. In financial terms, the net economic impact of the RGN pilots, in terms of Gross Value Added (GVA), was estimated to be around £16.5 million, with £56.6 million expected over a further three years. And, for every £1 invested by Defra, £1.50 was created in net GVA.

Researcher Anupriya Misra concluded the seminar by suggesting that the rural economy could be improved by following Defra’s evidence and creating a new network of rural enterprise hubs, which provide business skills and support that meets the needs of local communities.


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Putting the green back into planning policy

By Morwen Johnson

Environmental issues weren’t at the forefront of the recent general election – analysis by Loughborough University showed that the environment, despite being a significant issue of public concern, received very little attention in the press or media coverage. So it’s pleasing to see that a number of think tanks and organisations have recently been highlighting the importance of a green perspective in spatial policy.

Greening spatial policy

Professor Deborah Peel and Professor Greg Lloyd (reviewing some of these reports in the latest issue of Scottish Planning and Environmental Law Journal) suggest that the debate in the UK over housing supply is transforming the prevailing view of land assets and the green economy. Combined with European Union-led arguments for greater sensitivity in protecting and enhancing green infrastructure, it would seem that the planning profession need to urgently consider whether (and how) to defend established concepts such as green belts.

Ensuring that the planning system is robust also appears to be a critical task if you look at the challenges of implementing alternative energy solutions, when the national agenda and local public opinion seem to be at odds. The news this week that Lancashire County Council has rejected a major fracking application is just one example. This decision was despite the application having been recommended for approval by planning officials, subject to working hours, noise control and highway matters. The question of green belt development is also becoming increasingly polarised, when what we need is nuanced consideration of the social and economic consequences of changes to planning policy.

Where does rural planning fit?

The RTPI is attempting to stimulate debate. Last year’s project on Promoting Healthy Cities highlighted that the environment in which we live, work and spend our leisure time has a huge impact on our wellbeing. In the policy world however, the rural dimension and rural communities can be forgotten. The focus can easily slip into unquestioning preservation of a (fictional) idyll. This ignores fundamental rural issues such as poverty, social exclusion, access to affordable housing, accessibility of services, and the need for economic diversification. It also assumes a clear distinction between urban policy and rural policy, when in fact there are strong urban-rural interdependencies.

Concluding their article, Peel and Lloyd argue that “it’s time we engaged proactively with some of the ideas around different governance arrangements and interventions for our green infrastructure and developed a stronger appreciation of green assets for the 21st century”. As a profession, planners need to take the lead in developing a rural vision which is modern and fit for purpose. The risk if we don’t is that the green planning agenda will be driven by politics not policy.


Further reading

A green policy agenda? Greg Lloyd, Deborah Peel IN Scottish Planning and Environmental Law, No 169 June 2015, pp52-53

Improving public space debates Greg Lloyd, Deborah Peel IN Scottish Planning and Environmental Law, No 167 February 2015, p 4

The green belt: a place for Londoners. (2015) London First

Greening the machinery of government: mainstreaming environmental objectives. (2015) WWF-UK

Places to be: green spaces for active citizenship. (2015) Fabian Society

Garden villages: empowering localism to solve the housing crisis. (2015) Policy Exchange

City villages: more homes, better communities. (2015) ippr