Memorandum submitted by the Department
for Environment, Food and Rural Affairs
SUMMARY
Based on a wide range of economic criteria many
of the rural areas of England are thriving. They have much in
common with the economies of urban areas and England as a whole.
At lower spatial levels, however, it is clear
that some rural areas are facing a number of economic challenges.
There are positive signs that the Government's approach to economic
development is delivering improvements. However, as the evidence
base has developed so has our understanding of the challenges
faced by rural areas. Now is an opportune moment to review the
Government's current objectives for rural areas to ensure that
they remain appropriate.
As the Government's relationship with the Regional
Development Agencies has matured an increasing clarity has been
brought to the way the RDAs are tasked on rural economic development
and their achievements reported.
In the main the needs of many rural businesses
are not very different to their urban counterparts. Whilst similar
in terms of business type and employment the economy in rural
areas is different in terms of business size and business and
labour market density. The delivery of services which support
economic activity in rural areas needs to take this into account.
Rural areas must capitalise on their particular
characteristics, making the most of their comparative advantage
in land-based activity and attracting visitors. However to fully
realise the potential of rural areas all must recognise the wide
range of economic activity which occurs in them, and in which
the people who live there participate, and ensure that appropriate
hard and soft infrastructure is provided to take advantage of
opportunity provided by the growth of the knowledge economy.
The refocusing of functions and redistribution
of resources between the Regional Development Agencies, Natural
England and the Commission for Rural Communities will allow each
organisation to show leadership in making its contribution to
ensuring the sustainability of rural communities.
THE POTENTIAL
OF ENGLAND'S
RURAL ECONOMY
1. The Government welcomes the Committee's
inquiry into the potential of England's rural economy. It provides
in particular a timely opportunity to consider the new arrangements
for rural policy put in place by the Natural Environment and Rural
Communities Act 2006.
2. Around 19% of the population, or 9.5
million people, live in the rural areas of England.[1]
Of these 6% (610,000) live in sparsely populated areas with the
remaining 94% (8.9 million people) living in less sparsely populated
areas. Within these contexts the majority of people live in small
towns and villages rather than in hamlets and isolated villages.
3. Whilst the rural areas of England account
for approximately 19% of the population they account for around
25% of the business stock. There is a tendency with increased
rurality for a greater proportion of businesses to have no employees
but, as with urban areas, the dominant business size is between
one and nine employees. Measured in terms of average household
income, 55% of households in rural areas are above the median,
and 28% are in the top quartile. People continue to choose to
live in rural areas; net "inward" migration in 2003-04
was 105,000.[2]
In migrants to rural areas tend to be adults over 30 with children
and more mature people downsizing or establishing businesses.
There is a net migration of young adults (between 16 and 30) from
rural areas to urban areas.
4. Overall, it is fair to say that the rural
areas of England have performed well in economic terms compared
with urban areas. But the rural economy has undergone significant
change over recent decades; employment in agriculture has, for
example, declined by 30% in the last 20 years. As other sectors,
particularly services, have contributed increasing proportions
to the economy in terms of gross value added (GVA) over recent
years, so the proportion contributed by agriculture has fallen.
However, in absolute terms agriculture's GVA was maintained, or
slightly increased, between 2000-04, although Single Payment has
caused a fall in 2005.[3]
The reduction in numbers of people employed in agriculture, combined
with an improved mix of sectors in rural areas, means that distinctions
between the economy in rural and urban areas have, in general,
become more difficult to discern and thus a sectoral approach
to economic development more difficult to sustain. The rural economy,
just like the national economy, needs to be viewed in the round.
Further information on the economy in rural areas can be found
at annex A.
5. Applying the rural definition and district
classification (see map at annex B for classification of local
authority districts) to the available evidence, it is clear that
communities in rural areas range from some of England's most prosperous,
to those where average incomes are at similar levels to those
in the most deprived urban areas.
6. The evidence highlights some common characteristics
of those rural areas that are facing the greatest challenge in
terms of sustainable economic development. Broadly, they are:
— greater population sparsity and distance
from major urban centres (peripherality)
— comparative advantage in low paid
sectors; and
— where major economic structural adjustment
is needed.
These characteristics are explored in more detail
at annex C. While aggregated figures can indicate the overall
health of the economy in rural areas and highlight key issues
it is important to view rural areas in their regional and local
context and we shall continue to work closely with regional and
local agencies to develop a full understanding of the issues faced
by all rural areas.
7. The Committee's press release noted that
the inquiry would consider a number of specific matters, each
of which is addressed below.
A: DEFRA'S
OBJECTIVES FOR
ECONOMIC DEVELOPMENT
IN RURAL
AREAS, INCLUDING
THE RELEVANT
PUBLIC SERVICE
AGREEMENT (PSA) TARGET,
AND THE
FUNDING AVAILABLE
TO ACHIEVE
THEM
8. One of Defra's five Strategic Objectives,
as set in 2004, is to work to develop sustainable rural communities,
which we express more fully as: Encouraging sustainable regeneration
in disadvantaged areas, promoting social inclusion and reducing
deprivation, ensuring higher quality, more accessible public services
to rural communities. The economic dimension to this is expressed
in Defra's Public Service Agreement target 4 (PSA 4) seeking to:
Reduce the gap in productivity between the least well performing
quartile of rural areas and the English median by 2008, demonstrating
progress by 2006, and improve the accessibility of services for
people in rural areas.
9. PSA 4 is measured at local authority
district level. A total of 44 rural districts (see map at annex
D) have been selected to represent the least well performing quartile
of rural areas. All these districts have at least one of the characteristics
noted in paragraph 6 above. It is, however, important to emphasise
that this approach cannot necessarily provide a complete picture
of the lowest quartile since local authority districts are at
too high a level of geography to allow the identification of all
lagging rural areas. But we believe the approach that has been
adopted is reasonable and drawing on the available data there
is evidence for a closing of the gap between the level of the
least well performing districts and the English median.
10. The simplification of the rural delivery
landscape, on which Lord Haskins' Rural Delivery Review focused,
has consolidated the number of Defra-led funding programmes for
economic development in rural areas. The current key funding programmes
are:
— Defra's contribution to the RDAs'
single programme (the "Single Pot")—which is covered
in Part B of this Memorandum;
— the England Rural Development Programme
(Pillar 2 of the Common Agricultural Policy); and
— European Structural Funds.
11. The England Rural Development Programme
was launched in January 2000. By the close of the programme at
the end of this year some £1.7 billion will have been paid
out. This includes about £300 million of voluntary modulation
receipts (a proportion of direct production subsidies from the
Common Agricultural Policy redirected towards rural development),
which is match-funded by the Exchequer. The UK pioneered voluntary
modulation in the 2000-06 programming period, using the money
to fund a substantial increase in agri-environment expenditure
under Environmental Stewardship, which was introduced in England
in 2005.
12. A successor to the England Rural Development
Programme is being developed to cover the seven year period from
January 2007 to December 2013.[4]
Like its predecessor, the new programme will provide a significant
source of support for improvements to land management in the countryside
and the rural environment, particularly through Environmental
Stewardship.
13. The Government is committed to maintaining
a high level of expenditure on Environmental Stewardship to meet
demanding targets for improving the quality of the environment
and maintaining the character of the English countryside. However,
environmental land management also has an important role to play
in the social and economic sustainability of rural England. In
particular, it can make a significant contribution to encouraging
increased earnings opportunities, both directly and—through
tourism, recreation, and maintaining a high quality of environment
in which people want to live, work and invest—indirectly.
14. The Government recognises, however,
that further intervention may be required to promote the competitiveness
and innovative capacity of business in rural areas. The new Rural
Development Programme for England will therefore include measures
to support and complement other domestic and EU funding streams
to ensure that farming, forestry and wider rural businesses are
able to generate high quality employment opportunities across
a range of activities. With this in mind, Defra is developing
the programme to ensure that:
— its overall design encourages integration
between the social, economic and environmental;
— full account is taken of existing
strategies at EU, UK and England level;
— it operates within the context of
the RDAs' Regional Economic Strategies; and
— the Leader approach (community based
and "bottom-up") is used as a local tool to ensure programme
integration.
15. Under the new programme, Regional Development
Agencies will deliver support for social and economic regeneration,
working in close partnership with local authorities and others.
Natural England and the Forestry Commission will deliver environmental
land management.
16. It is not possible to calculate the
precise spend in rural areas of EU structural funds programmes
for 2000-06. The Objective 1 areas received some £66.5 million
from the EAGGF[5]
which was matched by Defra. The bulk of the resulting £133
million was allocated in Cornwall and the Isles of Scilly. Rural
areas also benefit by around £10 million per annum from the
Leader programme. We have calculated that rural areas benefit
from a further £100 million of spend from the other structural
funds. The shape of future structural fund programmes is still
to be decided but rural areas will continue to have a significant
profile. In particular Cornwall and the Isles of Scilly, which
together form one of our most significant "lagging"
rural areas, will continue to receive the highest level of EU
support as a Convergence region.
17. But direct regeneration funding is just
a small part of the picture. There is a wide range of public bodies
at national, regional and local level which contribute to economic
development and regeneration in rural England. Many of their activities
are aimed at the whole of their geographical territory. That is
why the Secretary of State, in his letter to the Prime Minister[6]
outlining the Department's priorities, indicated the need to mainstream
rural issues across government and "develop a positive approach
to "places" that works for rural communities as well
as those living in towns and cities".
18. PSA 4 has proved to be a particularly
difficult target to measure, because of data limitations. Though
these to a considerable extent persist, the very existence of
the target has stimulated a considerable expansion in the knowledge
base. This in turn has raised the level of debate on the challenges
of rural regeneration and has provided a focus for our work with
the RDAs on this.
19. Looking forward, the Comprehensive Spending
Review will provide an opportunity to review the current PSA target
with a view to creating, in the light of the evidence base we
now possess a more effectual approach to promoting economic development
in England's rural areas. In this we shall work closely with the
RDAs, local government and the new Commission for Rural Communities.
20. The economy in many rural areas has
a great deal of potential and will continue to grow with the economy
of the country as a whole. Other rural areas will continue to
need additional investment to ensure that they benefit from economic
growth. This must build on and support the diverse range of economic
activity already present and exploit the potential of developments
in information communication technology. It will also support
sectors, such as agriculture, to help them to adapt to considerable
structural change.
21. Like all parts of the country our ambitions
for economic growth in rural areas must be sustainable. We will
take into account issues such as climate change and the consumption
of natural resources. It is also important that development in
rural areas does not result in those characteristics which we
all value being lost; such loss would reduce the attractiveness
of rural areas as places to live in, visit, and set up business
ultimately undermining the economic potential of many rural areas.
B: THE ROLE
OF REGIONAL
DEVELOPMENT AGENCIES
(RDAS) IN
UNLOCKING THE
ECONOMIC POTENTIAL
OF RURAL
AREAS, AND
THE EFFECTIVENESS
OF DEFRA'S
RELATIONSHIP WITH
RDAS
22. The Regional Development Agencies are
important for delivering economic development in England's rural
areas. This is a role which will continue to grow with their new
responsibility for the socio-economic aspects of the England Rural
Development Programme and aspects for the mainstream European
structural fund programmes.
23. The 2004 Spending Review enshrined the
principles of the Government's Devolved Decision Making Review[7]
in a new RDA "Tasking Framework", with just two core
elements: first, a list of Departmental PSA targets to which RDAs
would contribute, and secondly, a small number of core outputs,
such as "number of jobs created" and "number of
businesses assisted". RDA Corporate Plans for the SR2004
period (2005-08) link these Tasking Framework requirements with
objectives from Regional Economic Strategies. In performance management
terms, this translates into setting broad strategic outcomes,
underpinned by just a few high-level output targets.
24. Defra's contribution to the RDA "single
pot" is for RDA activities in rural development, business
support for the farming and food sectors and the broader sustainable
development agenda (Defra's PSA targets 4, 5 and 1). The £72
million contribution for 2005-06 includes £21 million for
rural social and economic development that formerly rested with
the Countryside Agency and transferred to the RDAs in 2005-06.[8]
25. RDAs' mainstream activities range from
inward investment to business support, and they have a strategic
role in transport, housing, and tourism. The Government expects
RDAs to ensure that, in developing regional-level strategies and
carrying out their mainstream activities, the needs of people
living in rural areas are addressed. The RDAs will no doubt be
making a submission of their own to the Committee that will detail
specific examples of their activities in support of rural economic
and social development.
26. RDAs' progress in delivering their Corporate
Plans is reported in six-monthly Board Reports, that are sent
to Departments and also made public. For Defra, the key elements
of these reports are disaggregation of outputs on an urban, rural
and disadvantaged area basis, (to provide an indication of where
they are focussing their efforts), and narrative on strategic
added value[9]
(SAV) in sustainable development and access to services in rural
areas.
27. Perhaps not surprisingly, the RDAs'
first six-monthly reports showed some variation in the interpretation
of these requirements, in both disaggregation of outputs and narrative
on SAV. Defra is working with the RDAs to identify and share best
practice methodology, particularly focusing on the benefits of
disaggregated output data, in order to address this. Improvements
should be evident in the first six-monthly report for 2006-07.
28. The DTI (the RDAs' sponsoring department)
has stated its intention to look again at the self-reporting element
of RDA performance management, in order to assess how it is working
and whether reports are meeting the needs of RDA Boards and Ministers,
as well as the RDAs' stakeholders. This will be an opportunity
further to develop Defra's relationship with the RDAs as key strategic
partners.
C: AGRICULTURAL
AND NON-AGRICULTURAL
PROVIDERS OF
RURAL EMPLOYMENT,
FOR EXAMPLE
HORTICULTURE, AND
POSSIBLE BARRIERS,
INCLUDING THE
STRUCTURE OF
THE RETAIL
FOOD SECTOR,
TO THEIR
FURTHER DEVELOPMENT
29. The main business employment sectors
in predominantly rural areas are wholesale and retail, manufacturing,
and real estate, renting and business activities. These sectors
account for 46% of employment in predominantly rural areas. The
education, health and social work sectors account for the next
largest proportions of total employment in those areas. So, by
and large, the profile of businesses in rural areas mirror those
in non-rural areas.
30. Overall the agriculture, hunting and
forestry sector accounts for 2.6% of total employment in predominantly
rural areas. In some cases this can rise to as much as 9% of employment
in a local authority district. Defra does not break down agricultural
employment to identify employment in horticulture.[10]
Agriculture is just one part of the food chain, which includes
food and drink manufacturing, wholesale, catering and retail.
Altogether, the food chain accounts for 14% of total employment
in England, although these industries account for up to 39% of
employment in some of the most rural areas.
31. The Sustainable Farming and Food
Strategy: Forward Look,[11]
published in July 2006, outlines the Government's aims for further
development of agriculture. One of its themes, Succeeding in the
market, seeks to develop further the reconnection of farmers with
their markets and strengthen the linkages between the numerous
elements of the food chain. Farmers who succeed in developing
a more business-focussed approach will contribute to rural areas,
achieving their economic potential, particularly where agriculture
is locally important, and in ensuring the continued economic prosperity
and sustainability of those areas. We shall also work with farmers
to help them exploit growth in the markets for biomass.
32. In relation to the retail food sector,
Defra recently published an Economic Note on UK Grocery Retailing.[12]
The UK grocery market is currently the subject of an investigation
by the Competition Commission. Defra has written to the Commission
drawing attention to matters into which we believe it should look.
These include the impact of supermarket buyer power on the long-term
viability of suppliers and producers in the UK, and whether the
development of centralised national supply and distribution networks
will make it more difficult for the major retailers to respond
to consumer demand for local and regional foods.[13]
33. The economic impact of farming and other
land-based industries does not reflect their full significance
in rural areas of England. They are in very many respects intrinsic
to the social fabric of rural communities and to the wider environmental
offer which supports rural quality of life and which, in turn,
attracts businesses to operate from, and people to live in and
visit, rural areas.
34. Turning to barriers, low levels of population
density in rural areas results in greater challenges to providing
the infrastructure that supports economic development. In terms
of transport this requires imaginative public transport solutions
and an acknowledgement that the use of private cars is likely
to remain significant. Rural areas also have a low level of business
density and a higher proportion of businesses with no employees
(than urban areas). This can present barriers to accessing skills
and business support measures although in the latter case solutions
may not be unique to rural areas but could have a greater impact
on businesses located there.
35. The land-based sector contains many
highly-skilled people, yet reports of skills shortages remain
frequent. Furthermore, the skills that are present are not always
appropriately recognised. Research shows that there can be cultural
resistance in some rural areas to training borne primarily of
a poor appreciation of the business benefits of training. Physical
barriers, such as distance and cost, have also been recognised.
These issues are accepted as a hindrance to growth in the rural
economy. Research conducted by Lantra (The Sector Skills Council
for the Environmental and Land-based Sectors), and funded by Defra,
recommended the development of an on-line competence framework
and accompanying skills passport. Defra funded the development
of the competence framework in 2005-06 and is currently supporting
its continued development and pilot launch in this financial year.
36. Looking beyond the farming and food
sectors, the availability of information communication technologies
is, and will continue to be, very important for rural economic
development. This is why the Government has worked with national,
regional and local bodies in the public and private sector to
achieve high levels of broadband coverage. The net migration of
people into rural areas frequently takes the form of entrepreneurs
seeking to start up new businesses or work remotely and this trend
is likely to continue in coming years. The available evidence
suggests that up to 66% of rural entrepreneurs are in-migrants.[14]
D: THE EFFECTIVENESS
OF RURAL
PROOFING ARRANGEMENTS
IN ENSURING
THAT THE
RURAL ASPECTS
OF ECONOMIC
DEVELOPMENT ARE
PROPERLY REFLECTED
IN NATIONAL
AND REGIONAL
POLICY, INCLUDING
PLANNING POLICY
37. Defra is committed to realising the
Government's aim as signalled in the Rural White Paper 2000,
and set out in more detail in the Rural Strategy 2004,
that its policies and delivery programmes are developed so as
to apply effectively and equitably in rural areas. We have worked
closely with other government departments, at Ministerial and
official level, to ensure that due consideration is given to the
effect of policies on rural areas at all stages of their development
and delivery at both national and regional level. The Committee
will appreciate that this is not necessarily a straightforward
task, and the continued development of the rural evidence base
is an important element of our work.
38. There are some good examples of rural
proofing successes linked to planning policy. One is Planning
Policy Statement 7: Sustainable Development in Rural Areas,
published in summer 2004. This provides a clear framework in which
to consider rural economic development in the wider context of
social and environmental considerations (though it is rather too
early to assess its impact on planning decisions at the local
level).
39. Another, related, example is Defra's
input to draft Regional Economic Strategies and Regional Spatial
Strategies in order to ensure that they take account of the needs
and potential of rural areas. The recently completed Regional
Rural Delivery Frameworks are beginning to show their potential
as a tool for influencing the final shape of regional strategies
generally.
40. The availability of affordable housing
is a key issue for people living and working in rural areas. Social
and economic diversity are key elements of sustainable rural communities.
Without a range of affordable housing the trend for those on low
incomes, particularly young adults, to leave rural areas will
be further exacerbated: reducing the social diversity of rural
areas and undermining social support networks; and limiting the
viability of some rural businesses undermining the economic potential
of some areas.
41. The evidence shows that outside of London,
housing affordability is a greater problem in rural than in urban
areas. For people earning £17,000 per annum 28% of rural
wards are affordable compared with 50% of urban wards. At the
same time local wages in rural areas are lower than the national
average; in 2004-05 average earning in the most rural districts
was only £17,000 compared with £22,300 in major urban
districts.
42. These issues were explored by the Affordable
Rural Housing Commission (ARHC) which reported on 17 May 2006,
setting a number of recommendations to support the development
of more affordable housing in rural areas.
43. In response to these challenges Defra
has succeeded in establishing measures to increase access to affordable
housing in rural areas. In particular, working with DCLG, we have
secured arrangements for the buy-back of rural properties under
the new Homebuy scheme and made rural proofing a requirement for
Regional Housing Boards. We have also ensured that rural circumstances
have been addressed in the development of draft Planning Policy
Statement 3 and the Government's response to the Barker Report.
44. In addition Defra has also supported
the work of the DCLG's new Rural Homelessness Adviser; commissioned
research into the affordability of housing in rural areas and
the economic drivers of rural housing markets; and committed funding
to support Rural Housing Enablers through the Rural Social and
Community Programme until 2008.
E: The role of Natural England and the Commission
for Rural Communities and their effectiveness in taking forward
the work of their predecessor bodies
45. One of the tangible products of the
Government's Modernising Rural Delivery Programme is the Natural
Environment and Rural Communities Act 2005. The Act enabled the
creation of Natural England and the Commission for Rural Communities
(CRC), both on 1 October 2006. It is early in the life of these
bodies for a detailed discussion of their effectiveness but their
role in economic development in rural areas was articulated in
the Act.
46. The purpose of the CRC, as set out in
the Act, is to promote awareness of rural social and economic
needs and the meeting of those needs in ways that contribute to
sustainable development. Its functions are to:
— provide independent, expert advice
to government and other public, private and voluntary sector bodies
on issues affecting communities and businesses in rural England;
— act as a rural advocate, providing
an independent voice for rural people and communities, especially
those suffering disadvantage;
— monitor progress in the delivery
of the Government's rural policies, including at regional and
local level. The CRC will advise on whether policies and delivery
on the ground are addressing the needs of rural communities; and
— inform its advisory and monitoring
roles the CRC will commission research on specific themes relating
to rural people and communities.
47. The Prime Minister has given the CRC
a remit actively to challenge the Government on the effectiveness
of rural policies and to ensure that the rural voice is heard
and listened to at all levels. Its independent statutory status
will enable it to provide strong, impartial external challenge.
48. Natural England's general purpose, as
set out in the Act, is to ensure that the natural environment
is conserved, enhanced and managed for the benefit of present
and future generations, thereby contributing to sustainable development.
One of the ways in which it will fulfil that role is by contributing
to social and economic well-being through management of the natural
environment and, in particular, to do so by working with local
stakeholders.
49. Apart from rolling forward the existing
programmes of its three predecessor bodies (English Nature, Landscape
Access, and Recreation Directorate of the Countryside Agency,
and Defra's Rural Development Service), Natural England's particular
contribution to rural economic development is likely to be in
promoting the use of the countryside for outdoor recreation and
sustainable tourism, adding to the already significant number
of jobs and incomes generated in tourism related industries, and
in supporting land owners and others who seek to actively manage
and care for the landscape and the natural environment.
50. Finally, another commitment of the Rural
Strategy 2004, given life through the Modernising Rural Delivery
Programme, has been the development of a new regionally-focused
approach to rural delivery and stakeholder engagement. Under this
approach each region has developed its own Rural Delivery Framework
which is intended to identify regional priorities and coordinate
their delivery. This work has been led by the Government Offices
in conjunction with the RDAs, local government, NDPBs, the voluntary
and community sector, and other regional and local delivery bodies.
Central to the development and implementation of these frameworks
has been the Regional Rural Affairs Forums, which have been refreshed
and charged with ensuring that the views, interests and concerns
of rural people, communities and businesses are brought together
and presented to Government, not least through the quarterly meeting
between the chairs and the Minister for Rural Affairs.
Annex A
THE RURAL ECONOMY
The mix of employment in different sectors of
the economy is similar in rural and urban areas:
With the exception of agriculture, the mix of
business sectors is similar for rural and urban areas.
There tends to be a higher percentage of businesses
in rural areas with no employees. This increases with level of
rurality.
Percentage of businesses by size (based
on number of employees) (2005)
| Urban | Rural Town
| Rural Village | Rural
Dispersed
| Total |
| 0 Employees | 15.5 | 22
| 30.9 | 34.9 | 18.9
|
| 1-9 Employees | 66 | 65.5
| 59.1 | 54.9 | 64.5
|
| 10-49 Employees | 114.6 | 10.7
| 8.6 | 8.5 | 13.3
|
| 50-250 Employees | 3.3 | 1.6
| 1.3 | 1.5 | 2.9
|
| >250 Employees | 0.6 | 0.2
| 0.2 | 0.2 | 0.5
|
Source IDBR—Local units
October 2006
Annex B
THE RURAL CLASSIFICATION OF LOCAL AUTHORITY DISTRICTS
Further information on the rural definition and classification
of local authority districts can be found at: http://www.defra.gov.uk/rural/ruralstats/rural-definition.htm
Annex C
CHARACTERISTICS OF RURAL AREAS FACING ECONOMIC CHALLENGES
Whilst it is important that the challenges of rural areas
are considered at a local level and in their regional context,
there are some characteristics which are shared by many of the
rural areas facing the greatest challenges. These three broad
categories are considered below.
Population sparsity and distance from major urban centres (peripherality)
In economic terms, there are advantages from the co-location
of firms and industries in cities, in terms of knowledge spill-over,
networking, reduction of transport costs, labour market efficiency,
local competition and services. By their nature sparsely populated
rural areas tend to be distant from such urban centres. This tends
to increase the cost of service provision, and means that the
more peripheral rural areas gain the least benefits from the agglomeration
of economic activity in cities.[15]
Map 1 looking at city regions in terms of commuting from local
authority districts illustrates this point with the white districts
not being identified with any city region.
Comparative advantage in low paid sectors
The characteristics of some rural areas play a strong part
in determining the activities which take place there. For example
the presence of high quality agricultural land leads some areas
to specialise in commodity agricultural production and distribution,
both comparatively low added-value economic activities. Map 2
indicates high levels of employment in agriculture at a local
authority district level. Again there is overlap with the most
rural areas and those on the periphery.
The high environmental quality of some rural areas leads
to an extensive tourism sector, some (though by no means all)
of which relies on seasonal and low paid employment. Map 3 illustrates
districts with low pay which overlaps with areas of employment
in agriculture and tourism.
Areas undergoing major economic structural adjustment
A final category of rural area characterised by low productivity
and consequent low levels of social welfare is those areas adjusting
to recent declines in a major economic activity; in particular
the former mining areas of the East Midlands, Yorkshire, the North
East and Cornwall. Many of these areas lie close to major cities
and therefore the issues facing these communities tend to be very
different from the first two categories and more akin to the regeneration
issues in urban areas. Also, on a smaller scale, some former seaside
resorts and fishing communities fall into this category.
Annex D
RURAL AREAS OF LOW ECONOMIC PRODUCTIVITY IDENTIFIED FOR
DEFRA PSA 4 TARGET
1
Details of the rural definition can be found at: http://www.defra.gov.uk/rural/ruralstats/rural-definition.htm Back
2
State of Countryside Report 2006-http://www.ruralcommunities.gov.uk/files/SoTC06_Complete.pdf Back
3
Since 2000 the agricultural industry has accounted for around
0.8% of the total UK economy falling to 0.5% in 2005, measured
in terms of gross value added. This fall is a technical consequence
of the introduction of the Single Payment Scheme. Since 1973,
when the share was almost 3%, the overall trend has been downwards. Back
4
This follows the adoption of Council Regulation 1698/2005 (the
Rural Development Regulation) in September 2005. Back
5
European Agriculture Guidance and Guarantee Fund. Back
6
http://www.defra.gov.uk/corporate/ministers/pdf/milibandtopm-letter060711.pdf Back
7
Second paper on Devolved Decision Making, published in March 2004.
http://www.hm-treasury.gov.uk./budget/budget_04/associated_documents/bud_bud04_addevolved2.cfm Back
8
RDAs also receive an additional separate allocation for regional
co-ordination of the Business Resource Efficiency and Waste Programme
(BREW). This is £11.6 million in 2006-07 and is subject to
separate reporting arrangements Back
9
As authors of Regional Economic Strategies, and through their
relationships with regional and local stakeholders, RDAs are best
placed to lead and coordinate discussions at regional level to
influence the design and delivery of Government policy and programmes.
RDAs are increasingly active in non-project activities that do
not produce traditional outputs (for example, influencing regional
transport and housing decisions) so capturing this "catalytic"
and "influencing" role is essential to full monitoring
of RDA performance Back
10
The NFU has estimated that horticulture represents 25-30% of all
jobs in agriculture (2002). Back
11
http://www.defra.gov.uk/farm/policy/sustain/pdf/sffs-fwd-060718.pdf Back
12
http://statistics.defra.gov.uk/esg/reports/Groceries%20paper%20May%202006.pdf Back
13
http://defraweb/foodrin/compete/pdf/rooker-compcomm-letter060613.pdf. Back
14
Defra: Rural Productivity Paper, 4.2.2 Enterprise: http://www.defra.gov.uk/rural/pdfs/research/productivity-rural-england.pdf Back
15
http://www.defra.gov.uk/rural/pdfs/research/productivity-rural-england.pdf Back
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