UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 714-vi

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Environment, Food and Rural Affairs Committee

RURAL COMMUNITIES

Tuesday 29 January 2013

Richard Benyon MP AND Sara Eppel

Evidence heard in Public Questions 407-476

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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Tuesday 29 January 2013

Members present:

Miss Anne McIntosh (Chair)

George Eustice

Sheryll Murray

Neil Parish

Ms Margaret Ritchie

Dan Rogerson

________________

Examination of Witnesses

Witnesses: Richard Benyon MP, Parliamentary Under-Secretary for Natural Environment, Water and Rural Affairs, Defra, and Sara Eppel, Head, Rural Communities Policy Unit, gave evidence.

Q407 Chair: Good afternoon. Minister, you are most welcome. Would you like to just introduce yourself and your colleague, for the record?

Richard Benyon: I am Richard Benyon; I am the Minister for Natural Environment and Fisheries. I am joined by Sara Eppel, who is Head of the Rural Communities Policy Unit.

Q408 Chair: Thank you very much for participating in what is the conclusion of this stage of our inquiry into rural communities. Minister, how high a priority do you give to rural communities and the work of the Department?

Richard Benyon: A very high priority. It is something that is a very high priority, not just for all the Ministers in Defra and all the ministers who were in Defra prior to the reshuffle, but also the Prime Minister and many other Ministers across the coalition who come from rural communities and feel very passionately about them. The "R" and "A" in Defra are really important to us. Just to say that sounds glib and like political-speak, but by our actions we want to be judged and we want to show that we are making a difference for rural communities, and actually making them feel that they have got a Government and a Department that are on their side.

Q409 Chair: You have one definition for rural areas and the Department for Communities and Local Government have another. Would it not make more sense, if you are the lead Department on rural communities, for there to be one definition for rural areas?

Richard Benyon: It might do, actually. I do not have a fixed view in my mind. I know what I think of as a rural community and I am sure that there have to be measures to satisfy funding streams and others. However, if there are mixed messages coming across from Government, I will certainly look at that. Sara, are you aware of where we are on definitions on rural communities?

Sara Eppel: When we are looking at rural communities, some are more sparse than others. We call those Rural-80 and there is Rural-50, so it is quite a statistical definition. When we are working with the Department for Communities and Local Government, they have absorbed that set of indicators into their sparsity weighting. Although it is not exactly the same, their sparsity weighting is very close to our Rural-50 and Rural-80 work, so we are trying to get them to align.

Q410 Chair: For the benefit of the inquiry, could you just state what your current definition of rurality is?

Sara Eppel: There is a range of layers. Going out from urban, we would have periurban. We would have, as I said, Rural-50 and Rural-80. So, we are going down into details of how sparse and how distant people live-how far the communities survive away from towns. By using those gradations, we can make sure that our statistics and our reporting is as defined as it can be.

Q411 Chair: Would you accept, Minister, that it is probably quite a bit more expensive to deliver public services in rural areas-services like health, with the big cost of the ambulance services, the collecting and disposing of waste and school buses? Do you accept that, first of all?

Richard Benyon: Absolutely, yes. There is plenty of statistical evidence, as we all know, from our constituencies. There is also an issue in terms of service delivery. You can tick many more boxes and you can achieve many more outcomes by getting a service provision around in a town than you can in going around rural villages. The case I always quote-I do not know why it sticks in my mind-is about stroke therapies. You can probably get around half a dozen stroke victims in the same time as you can get around two or possibly even fewer in some very rural areas. So you can understand why service managers want to show that they are treating as many stroke victims as possible. However, in doing so, you are disadvantaging people in those conditions in rural areas. One of the things we are trying to do is to provide, across Government, the necessary measures to ensure that that kind of bias is not happening.

Q412 Chair: However, it is happening, Minister. Certainly, there were three separate figures. If you take one district in my area, they were given three different spending figures. The final figures were released on 17 January in the spending settlement. It means that there are 40 districts that are sparsely populated and deeply rural in the country that are going to be, by their definition, underfunded because of other definitions that are used by the other Department. What discussions do you have with Eric Pickles and other Ministers in the Department for Communities and Local Government to ensure that there is fairness and equality in funding?

Richard Benyon: We have not discussed this at a ministerial level. We had a lot of time with the development of the rural statement. As the new rural policy unit that Sara leads was being set up, I personally went round a great many Departments and spoke to my opposite numbers. My Secretary of State and his predecessor did the same at Cabinet-level on specific issues; I was doing it on a more broad-brush level. Then we deal with specific matters as and when they occur and I have certainly had pretty regular conversations with my opposite numbers in DCLG. We are doing a lot at an official level as well.

Sara Eppel: We have had a lot of interaction with DCLG around the rates review and the local government settlement. We brought in our rural definitions and statistics to ask DCLG to look at the impact, which they have done. Basically, some rural areas are not doing as well as others, but equally some urban areas are not doing well. So, there are some that do not do as well, but there are some that do better. It is therefore very difficult to say it is only rural areas that are not doing so well. There is a balance across all of it and, ultimately, it is for Ministers to decide where that hits.

Q413 Chair: We will come on to discuss this aspect in more detail. It has been put to us that rural proofing is not working nearly as effectively as it did in the past when there was the Commission for Rural Communities. Do you accept that criticism?

Richard Benyon: No, I do not. I think rural proofing is an absolutely vital measure. I come at this from a slightly jaundiced view about how it was done in the past, because I chaired a rural committee on a local strategic partnership. We had lots of paperwork on rural proofing, but I did not feel it was really touching the sides of the problem in terms of the provision of services in that part of rural England. It is something that I have taken very seriously; it is something that my colleagues do. David Heath brings a new impetus to the Department on this because he comes from experience on bringing legislation forward into Parliament, so we are really taking this very seriously. We have got some really good success stories that we are happy to go into. I think we are doing a good job, but it is really something that we are very open to review on. In fact, we are setting up a group that will be led by Lord Cameron that will look at that and make a judgment, and it will have free reign across Government to see how we are doing that.

Q414 Neil Parish: On the local government settlement, the problem is that in any authority that is 80% rural, or even 50%, the cost of delivery of service is much greater. Now we understood that the DCLG was going to actually put money across to rural authorities. Something has been added called "dampening" and that seems to have put the kibosh on the whole lot. Are you making representations to DCLG to try to get this put right?

Richard Benyon: Yes, we are. We are in discussions with DCLG. We recognise the difficulties and, as Sara said, there are some winners in rural areas under the current funding scheme, and there are some losers. There are also some winners in urban areas and there are some urban areas that are not doing so well. It is not a straightforward binary issue but we are certainly working very closely with them to try and find a way forward.

Q415 Neil Parish: Are they listening?

Richard Benyon: Absolutely.

Q416 Ms Ritchie: This is a question about the Welfare Reform Act. The Commission for Rural Communities argues that the bedroom tax will have a disproportionate impact on rural communities. Has Defra pushed for an exemption for rural areas that lack the range of pricing stock this policy requires?

Richard Benyon: We made rural affordable housing one of the priorities that we are working to achieve. We have worked with colleagues to make sure that, for example, exception site housing will still continue in rural areas. We have exempted it from the measures in the Localism Bill whereby developers could go back and renegotiate section 106 arrangements. Rural housing is very much a priority. I do not think we should kid ourselves that exception site housing is going to resolve the shortage of affordable housing. That will come through a renaissance of housebuilding, which is a cross-Government agenda. Of course, it brings into play a lot of other issues, like people not wanting new houses near where they live, but there is a real desire to provide that and a whole range of different measures that can achieve that-for example, developing redundant farm buildings through Homes on the Farm, and there are all these other measures that we want to see across England. There is no silver bullet to it but we want to see more affordable housing in rural areas.

Q417 Sheryll Murray: Can I look at the protections that are applied for the countryside? Specifically, what discussions have you had with other Departments before the Government finalised Clause 8 in the Growth and Infrastructure Bill, which removes the protections from national parks and other designated landscapes?

Richard Benyon: We are very determined that one of the key deliverers of growth in rural areas, and the thing that will unlock the ability of the rural economy to play its part in the recovery of the national economy, is broadband. We want nothing to stand in its way. That said, what we are proposing here is not going to make a dramatic difference to the landscape and, in many cases, no difference to the landscape. We just want to make sure that in our desperate and determined urgency to roll out the high speeds of broadband to some of the most remote communities, we are doing this in a way that is not encumbered by current restrictions. I know this is causing concern to bodies such as the national parks. It is a sunset clause; it has got a five-year limit. I am very happy to go into more detail about our rural broadband rollout, but it is a determination across Government to see this happen as soon as possible, and we do not want planning to be a preventer of that happening.

Q418 Sheryll Murray: Just moving on from that, could you give me an example of the sort of applications that you would want to see go ahead that might have been rejected without this clause in the Bill?

Richard Benyon: I do not know whether they would have been rejected, but they may have been delayed through a process. There still will be a consultative process; it will not go through Sites of Special Scientific Interest and such like. It is about above-line cabling and it is about boxes-that is probably about all. I am guessing here, Sara, that there will be the occasional master antennae.

Sara Eppel: For wireless.

Richard Benyon: For wireless. For the hard to reach, we recognise that there is going to have to be a wireless provision; this may include those.

Q419 Sheryll Murray: Do you think that Clause 8 sets a dangerous precedent, and is that why you have put in the sunset clause?

Richard Benyon: We have put in the sunset clause because this is a one-off project. This is not something that is going to be repeated, unless you have a suggestion of some new technology that we have not thought about. In those circumstances, you might consider doing this again, but I cannot see any need for this after the rollout of this provision, so that is why it has got a five-year sunset provision.

Q420 Ms Ritchie: On the question of rural broadband, Minister, earlier this month Ofcom stated that the speed for a basic internet experience is now 8Mbps to 10Mbps. Are you concerned that in rolling out universal coverage at just 2Mbps to the most rural areas, the Government is funding infrastructure that the regulator already considers inadequate?

Richard Benyon: We are rolling out superfast broadband to the vast majority of rural areas. Some will not receive quite that level of provision, but to the hardesttoreach 10% it may well be that it will be that level. For many of my constituents in not-spots, 2Mbps will be better than none. As other forms of technology, such as satellite and wireless provision, develop, they may get faster speeds. One of the most interesting statistics I heard recently was that households can double their broadband speed now by in-house improvements, which can cost, on average, £50 per household. They can double what they receive today, so one of the messages that we are trying to get out is that, alongside what the Government is spending-which is £530 million this spending review, more on top of that, and doubled, in many cases, by local authority spending-they can also help themselves at a relatively affordable cost.

Sara Eppel: Just to clarify, the 2Mbps is a minimum. In practice, they are expecting it to be 4Mbps, 5Mbps or 6Mbps for most communities.

Q421 Ms Ritchie: Can you reassure the Committee, Minister, that the infrastructure is further proofed, so, for example, should more money become available to meet the EU 2020 target of 30Mbps, we will not have to dig it up and start all over again?

Richard Benyon: I am advised that when you are looking at a cable, what we are using to provide the best broadband in Europe is using a very small part of that cable capacity. Of course, that will vary depending on what access people have. It is going to be an infrastructure that will last well into the future. I cannot say that there will not be other technologies that might be available at a more affordable rate in the future to assist the really hard to reach. That is the challenge that we have at Defra.

Q422 Ms Ritchie: Can you give us a commitment that the £300 million from the BBC, from between 2015 and 2017, will be spent on areas where speeds are the lowest?

Richard Benyon: This is the money from the digitisation-the claw back. We have got a commitment to make sure that we are providing broadband to those areas where there is no market. That is where taxpayers’ money comes in; that is where funds such as this will come in. We recognise that there are 10% of those places that are extremely hard to reach and, frankly, cable is not going to be the solution. We have our Rural Community Broadband Fund, for which we are having expressions of interest now, which is partly funded straight from our Department expenditure limit and partly from the RDPE. That fund is to assist those hardest to reach.

Q423 Ms Ritchie: What increase in the rural economy would you expect from the rollout of broadband?

Richard Benyon: We have got economists who are looking at the benefits and the impacts of all these kinds of work, and Sara may be able to add some facts. Just anecdotally, as I go around the country, I can see the impact; we all can in our constituencies. We can see the change that this brings about, particularly with a change that is arguably having an impact on the high street, in terms of how people shop. Perhaps this Christmas was the first one where that really was brought home to a large degree, as people were buying much more online. You are starting to see the economic potential for business in rural areas.

However, I very much see this as a social policy. This is about social inclusion just as much as it is about jobs and prosperity. For somebody who is out of work, or elderly, or who wants access to information on their benefits, or who wants to shop from home or who wants access to a whole range of services, this is going to be transformational. So, I do not think we should just look at this in terms of the growth potential, although that is absolutely vital at this moment.

Sara Eppel: DCMS is publishing, in February, a literature review, which we have just been doing, on the impact globally-what different countries have experienced from having put broadband into these areas. It is a really interesting read, and adds a lot to the evidence of what broadband has done. I cannot give you a nugget right now, but it will be available very soon.

Richard Benyon: Chair, you might be going to ask me about the mobile infrastructure project-

Q424 Chair: I am tempted to say that you are talking a lot of twaddle here, because the Minister, Ed Vaizey, came before us and did not seem to grasp how slow the speeds are in rural areas. I know my farmers in my area are coming under huge pressure; everything has got to be done online. A lot of small businesses operate from their homes or in small locations in their constituencies. They are not competing like-for-like on speed, so the first issue is speed. You just said in an earlier answer that individual households are having to spend up to £50 each for improvements. Now, this Rural Community Broadband Fund is very generous-it is a £20 million fund-and it is jointly funded by Defra and Broadband Delivery UK, who fund £10 million as well. Apparently, each community that applies has to raise 50% of the money themselves. The question we would like to put to you is to reassure us that there is a level playing field between rural areas and urban areas, because, from where we sit, rural areas are very badly treated as regards broadband.

Richard Benyon: Sorry; I have obviously not been clear. What we are talking about is getting farmers in your area, as well as anybody who lives in rural areas, broadband. They have not had it. Britain has been lagging behind. That is why we set about spending £530 million-in fact, it will be over £1 billion-but they have not got to your farmers yet.

Q425 Chair: Tell me what speed they are going to get up Rosedale, compared to in the centre of York. Are you able to tell me?

Sara Eppel: Yes, I am. From the £530 million Government investment, added to the local authority investment and European investment, which makes £1.2 billion by 2015, 90% of premises will get 24Mbps minimum. They will also get, for those last 10%-

Q426 Chair: Therein lies the problem. It is the 10% that we are not reaching and the 10% are in rural areas. Is the problem with the technology-because BT bring it so far and then you have got to get the mobiles-or is it simply that the speed cannot be so fast in rural areas?

Sara Eppel: Just to clarify, the £530 million is only for rural areas. So, the whole programme is rural.

Q427 Chair: What is the speed in Rosedale, as opposed to the speed in the centre of York?

Sara Eppel: I am afraid I do not know whether Rosedale will be getting superfast broadband, so I cannot directly answer that.

Q428 Chair: There we have it. How many rural areas are going to have superfast broadband by the end of this year?

Sara Eppel: 90% by the end of 2015.

Q429 Chair: That might be York or it might be Manchester or it might be Exeter.

Richard Benyon: All this money is to get broadband to where there is no market for it to reach. BT and others can get a market to provide it to York or Newbury, or anywhere else, and they are doing their rollout, their Race to Infinity and all these other projects, because there is money in it for them. There is, frankly, no money in it for them in other areas; that is why Government has had to intervene and it is a lot of money. I am sorry, but I am not quite sure why you think I am talking twaddle. We are trying to get broadband to farmers in your constituency who have been told to submit their forms online and are having to take it on a memory stick down to the pub; that is crazy. This is an absolute priority for this Government.

Q430 Chair: Can I press you on two things? Do communities have to raise 50% of the money themselves?

Richard Benyon: Most of them, yes.

Q431 Chair: Is that the case in urban areas as well?

Sara Eppel: It is 100% in urban areas. Urban areas, by and large, are receiving it commercially, so the householder will pay for the connection, because BT has enough of a business case to offer it without getting Government money to support that.

Q432 Chair: Farmers Weekly, on 21 May last year, said, "Despite the large number of methods rural people can use for broadband delivery…the grant is only for fibre optic broadband, arguably the most expensive and complicated method for rural areas". Is there any particular reason that you have gone for that method?

Richard Benyon: We think fibre optic is the best way of getting the right speed to households. Of course, it may not be cost-effective within this scheme to run that up a three-mile farm track to a farmhouse, and we will have to find alternative technologies for that. Fibre optic is the technology, globally, for the delivery of broadband. There is no market in it to provide it to small villages like Rosedale, but it will be rolled out using the taxpayers’ money-over £1 billion of it, if you add in all the co-funding-and that is what we are trying to do.

Sara Eppel: Just to add, the European Commission required us to do it with fibre optic, but they have now come back recently and said that we can look at wireless as a transition technology. This is because they recognise that in certain topographies and distance from fibre optic, actually we are going to end up with no increase, or at very basic levels. So they are allowing us to use wireless broadband for some of our really final 10% areas. Those have been integrated into some of the plans for the Rural Community Broadband Fund. For some of them like large national parks, like Northumberland, for example, wireless might be the better solution there, because it is so big and so different.

Q433 Chair: What about North York Moors National Park?

Sara Eppel: Quite likely. I am afraid I do not know the detail of that.

Q434 Sheryll Murray: You have basically answered some of what I was going to ask, because I have got an awful lot of farmers who live up that three-mile track. What I have managed to do for some of mine is to get them on to trials using 4G, or satellite trials, so that they can at least access online and submit their VAT returns and whathaveyou. My question was going to be about using this to reach that extra 10%, and I understood that it will be used as a last resort, but it might take a little bit longer for them to get it. Am I correct in that thinking?

Richard Benyon: The 4G auction is taking place at the moment. One of the ways rural Britain has been left behind is in mobile reception. One of the things we are doing is the mobile infrastructure project, which is going to see the Government financing new masts in areas where the mobile phone companies, frankly, would not consider there being a market for them. That is holding back large areas. The analogy is that it is like a street lamp: the Government is providing the structure and the mobile companies are going to provide the equivalent of the light. With the 4G rollout and with the sale of the 800Mhz spectrum-which is the one that we are really interested in in rural areas because that will go through to those communities-this is a really big moment for all of us who spend most of our time driving around our constituencies trying to have conversations that keep dropping off.

Q435 Sheryll Murray: There is one specific project that I know of that is using the old television analogue mast to provide this to one of the worst areas in my constituency, so you did not need to provide a mast, so to speak. That is one way that perhaps we could utilise the rollout of 4G as well.

Richard Benyon: There is a lot of existing infrastructure, such as water towers and church steeples, although I bet churches would hate for that to be referred to as infrastructure. These all do offer the potential, as platforms, for 4G and certainly for mobile access. We are looking at everything. This is something that I think you will see announced in the very near future.

Q436 Chair: Sara Eppel, you have actually told us something quite important here, which updates what Ed Vaizey said. What we heard during Ed Vaizey’s evidence was that the Rural Community Broadband Fund will only apply to 24Mbps. So, are you now saying that the European Union is allowing you to use the Rural Community Broadband Fund in those areas that can only get 10Mbps to bring them up? That is quite important and contradicts what we heard earlier.

Sara Eppel: Yes, and that is because the Commission only gave that direction really quite recently. I am not even sure we have seen it fully in writing yet. It really is in the last month.

Q437 Chair: So, was it December or perhaps January?

Sara Eppel: I think the first indication was in the middle of December, but we have not had it in writing yet. It does mean that some of the areas where wireless is the obvious solution are more likely to get the funding.

Richard Benyon: Chairman, is Ainderby Steeple in your constituency?

Chair: I think it is probably in William Hague’s.

Richard Benyon: That is where Ed Vaizey switched on the first-

Q438 Chair: I know. Rosedale is mine. On the Rural Community Broadband Fund website, it currently states, "Decisions on a third round will be taken in light of the response to the second round," and "We hope to give an early indication of this." Can you give us an early indication now regarding the timetable for round 3 of the Rural Community Broadband Fund?

Sara Eppel: Yes, we are expecting to go live in the first week of March for round 3.

Q439 Chair: How long will that process last?

Sara Eppel: It will then be open for two to three months to allow communities to develop their proposals. We are then expecting that people will have contracts signed by March 2014 to give them time to get the match funding and work out the procurement process, and so on.

Q440 Chair: Minister, obviously there have been criticisms that the Rural Community Broadband Fund is complex and difficult to access. How do you respond to those criticisms?

Richard Benyon: A lot of people have accessed it successfully, so I am quite convinced that it will all be spent. We have had the frustrations of seeking state aid and all the other things that have been a challenge in the rollout of this project. As far as the rural fund, I would like to hear people’s examples of why they found it complex, because that has not been what has been reported to me by those people seeking to use it.

Q441 Chair: We all know where you are, so I am sure they will now. Is there a strategy to marry up the two processes-the areas covered by the Rural Community Broadband Fund and the areas covered by the wider Broadband Delivery UK, funding the rural broadband programme?

Sara Eppel: Yes, we have got 51 live expressions of interest at the moment, which came through rounds 1 and 2. We work very closely with BDUK on the ground, because each county is rolling out its major rollout. They are mapping their 90% area and their 10% area and, through that process, we are able then to say, "Is that community bid actually in the final 10%, or is it going to be rolled into the county rollout and will it then be in the 90%?" That is the process we are going through at the moment. What we are trying to do is make sure that, if some Rural Community Broadband Fund applicants then find that they get rolled in to the 90%, they then do not lose out. We need to make sure that we are able to say to them, "You came with an expression of interest. You have gone through a whole process. The communities that you were going to have under our funding are now going to be under the main funding, but are there others in the final 10% who you think you would like to add in?" So, we are trying to be flexible about it and trying to make sure that the money is spent where it needs to be spent.

Q442 Chair: How could they possible lose out?

Sara Eppel: If it is rolled into the 90%, it will be funded under the main £530 million rollout. Therefore, the communities that they bid for would not be receiving our money. We might as well let them have our money for their final 10%, so they need to find other communities to attach to the 90%.

Richard Benyon: Can I just clarify something? You said earlier that households are going to have to spend money to improve their own internet; they do not have to. We are just saying that households can speed up a better service for themselves now and that is a choice for them, but we will continue to do this. Also, we are working closely through the rural and farming networks and other means to communicate a way in which this can work better on the ground. MPs can play a big part here in giving leadership on this. Some county councils and unitary authorities are better than others, frankly. The important thing is, for example, having a planning official whose job it is to really assist in the rollout of this scheme as an economic measure, rather than finding planning difficulties-that is one great advantage that we are finding in best practice. Secondly, not messing with the order of the rollouts is another important thing, so saying that we want it to go to that community, rather than that community, when that might not be the best in terms of the speed of laying fibre. It is about working with the provider-usually BT-to make sure it is happening as quickly and efficiently as possible. MPs, councillors and other can give great leadership on this and we are trying to work with as many people as we can to make sure that is happening.

Q443 Chair: North Yorkshire could not be doing more, as a county council, as I am sure you are aware. How many not-spots do you think will be left by the end of this year when there is meant to be the 90% magic figure of coverage.

Sara Eppel: It is 2015.

Richard Benyon: 2015. There will still be not-spots. The not-spot in which I live will still be there by the end of this year, but hopefully not by the end of next year.

Q444 Sheryll Murray: Minister, you have answered part of this question, but if you could just restate what you have told us. Clearly, the Minister for Science stated that satellite broadband is "an essential means to deliver faster internet access for rural communities". We know now that the European Commission have changed the rules on using satellite broadband. Could you tell me if you know how many schemes you have got in the pipeline?

Richard Benyon: I met with satellite providers and I am sure it is a technology that can work. We know it works already in certain parts of the world, including here. Quite how much, at this stage, of that final hardesttoreach element will be delivered by satellite or wireless, which is another important provider, I cannot say. Have we assessed yet, Sara?

Sara Eppel: I do not think anybody has bid in the Rural Community Broadband Fund rounds 1 and 2 to provide satellite. There are probably communities who can only get satellite and therefore they may come in under round 3. The other thing to remember about satellite is that it is fine for doing email and it is fine for going online, but it is not good for gaming and it is not good for anything that does not need a delay, because there is a delay between where you are on the ground and the satellite. That actually can be quite a major problem for certain types of businesses, for example. It could play a really important part for those very, very remote communities, but it would not be our preferred choice if, actually, there is a chance of fibre optic and wireless doing the job better.

Q445 Sheryll Murray: Is it fair for the Government to insist on digital by default policies for people who have no access to broadband?

Richard Benyon: That has been one of the absurdities of recent years and, frankly, one of the reasons that has really pushed us into spending this vast sum of taxpayers’ money. As I was saying to the Chair, Government was asking farmers, for example, to deliver their forms online but very often they did not have the means to do that and that is why we are doing this. In other areas of service provision, digital by default is right, because it goes with the grain of human nature, it is cheaper and it is going to be just how we are. There is still a role in rural proofing, as well as in other areas, to keep reminding people that not everybody has access or has the skills to use Government services digitally. We have to remember that, for quite some years, there will be the requirement to remember that there is a cadre of people who cannot.

Q446 Chair: The CLA mentioned that if they have not got broadband and they cannot submit their tax return, they have been told by Her Majesty’s Revenue and Customs that they should use a third party. As you know, Minister, that will push up the costs hugely. Is that fair?

Richard Benyon: No, that is why we are rolling out broadband-because it is not fair and it has not been fair for too many years. That is why we are spending hundreds of millions-

Chair: It will still be three years before it is in place.

Richard Benyon: We have only been in Government for less than three years. I hope you feel that this is an absolute priority for us. Frankly, we inherited something that was not fair and we are trying to make it fair. I do not know how I can say it any more clearly.

Q447 Dan Rogerson: I would just like to refer to satellite solutions. There are issues around speed but more important to me are the issues around costs to the end user. There is a standard tariff with the sorts of technologies that we would understand, whether they be wireless or fibre-opticbased. However, schemes that I have seen that are satellite-based are more expensive and, also, there are much tighter limits on data, because it is a more expensive method. Given that there is a Government subsidy going in to making sure that it reaches everywhere, has the Government put any consideration into making sure that there are standard tariffs across the technologies-a small amount of crosssubsidy to have a standard service-or are we saying that if you are on satellite that is tough, and you are going to have to pay more and get a poorer service in terms of the amount of data?

Sara Eppel: Because we have not yet got the satellite offer in the publicly-funded programme, the short answer is: no, we have not developed upon how we deal with that in terms of cost. It is something that we need to look at.

Q448 Dan Rogerson: I would welcome it if you did, because there could be problems in saying to people, "This is your solution. That will work for you," and they find themselves disadvantaged.

Richard Benyon: There is a wider point related to that, which is, of course, that a lot of community broadband schemes-we want to encourage them; there are fantastic examples and we have all got them in our area-can be expensive. You do not want to stifle that ingenuity and that community spirit, yet you do not want to leave people with a more expensive solution than they would otherwise have got if they had waited. It is just making sure they have got all the facts available and then giving them the support they need, if they continue to want to roll these out.

Q449 Dan Rogerson: I am just particularly concerned when we are using public money that there is a fairly standard level, if not in speed then in terms of cost and access to data.

Richard Benyon: It is a very good point. I am not sure we have got a solution for that yet.

Q450 Sheryll Murray: Talking about the mobile infrastructure project, the Chancellor announced at the Conservative Party conference in 2011 £150 million for investment in this. Is there an underspend in that at the moment?

Richard Benyon: It has not been signed off as we speak. I think it is going to be signed off-

Sara Eppel: Tomorrow.

Richard Benyon: Tomorrow; there you are. I had a meeting with the chief executive of Vodafone UK on Friday for an update on this. It is going to happen. It is going to be targeted at those areas where it is most needed and the market could not otherwise provide. It will provide up to 60,000 premises across the UK to compete with the not-spots. It will address the total not-spots along the initial 10 key road routes that suffer from the worst coverage. This is going to start to make a big difference in terms of the economic activity, as well.

Q451 Sheryll Murray: Moving on to rural transport, how is Defra taking forward issues raised in the 2012 Community Transport Association State of the Sector report?

Richard Benyon: I meet with Norman Baker and make sure we are joined up at a ministerial level. There are a number of areas of funding on which DfT, for obvious reasons, take the lead, but Sara’s team works very closely with his officials to make sure it is being rolled out successfully. Where they have worked, and perhaps pumppriming took place in the past, we want to find innovative ways for that funding to continue. There is very close working. One thing that springs to mind is Wheels to Work, which, for the unemployed in rural communities, has been an absolute lifeline. It is about trying to find new solutions to make sure that that good idea continues. Sara, can you think of more examples?

Sara Eppel: The Community Transport Association report highlighted lots of best practice, and there is some amazing and very impressive voluntary action in communities to provide a kind of bus service. What we were trying to do was really highlight those, so other areas could just copy, and DfT funding went in to supporting that. It was really trying to draw up some of the best practice.

Q452 Sheryll Murray: I was quite surprised to hear, when we spoke to another witness, that Cornwall was one of the few local authorities that did not invest any money in community transport schemes. Clearly, there are other schemes that they would be using, like Wheels to Work, yes?

Sara Eppel: As far as I am aware. They all have access to the funding. It is their choice if they choose to bid for some funding to support their schemes, but maybe they have not done already.

Richard Benyon: The idea that this can be driven by too great an extent by Whitehall is of the past. I know that we have all seen buses driving around rural areas filled with nothing but air, and a more bespoke, demand-led service is what most people want. That is why there is some really interesting work coming out of local authorities, some local communities and some social enterprises. It is about drawing best practice together and making sure that, where there is Government funding, it is used really effectively to promote that. I think DfT are being very canny about how they are taking this forward.

Q453 George Eustice: I wanted to ask about the rural growth networks. I know you have had five pilots running in the last year or so. I just wondered what lessons you have learned from those pilots, whether there is anything you would change and whether you intend, now, to roll this out more widely.

Richard Benyon: I would love to roll this out more widely. It is quite a lot of money. It was delivered as part of the rural economy growth review. We had a lot of expressions of interest, but we were very clear about what we wanted to achieve. We wanted a fairly quick turnaround and to create lots of jobs; it is 3,000 jobs, we think. It is about looking at the untapped resources that exist in certain areas. For example, we identified women as being a huge possibility, if they were given the right support to set up and start a business. We found some money from across Government to assist us with that. One rural growth network in Wiltshire identified the military family-people leaving the military or their wives or spouses-where there is a huge wealth of experience and ability. Providing some training and the premises that they need and the digital connection, and all the other things that come with it, is going to be a fantastic support for that area.

Q454 George Eustice: Is funding the limiting factor then? I know there was £165 million, originally.

Richard Benyon: Yes. All Ministers would like to see more of this right across the country. Yes, funding is a limiting factor. We also want to make sure that we are learning as these do get up and running, and the drawdown underfunding is underway and that it is really good value for money and it is delivering jobs. There may be the chance of further networks in the future, building on the best practice.

Sara Eppel: We have started the evaluation of the pilots. We were running it at the time that they are rolling out. It is early days. I could not say that we have got key insights at this stage. Just to clarify, it is only £15 million for the rural growth networks; the remainder of the £165 million is covering the rural economy grant, training schemes, tourism, money and broadband. So, it was a bigger package.

Q455 George Eustice: Some of the evidence that we had from Cumbria Council was that although they said it was good once they got the Section 31 grant, before that it was quite a bureaucratic process and quite time-consuming. Is that a fair criticism?

Sara Eppel: We gave each rural growth network six months to develop a business plan because, initially, it was a fairly sketchy outline of what they had planned. They had to get match funding. They had to develop a full business plan that met all the requirements. We also provided them with £50,000 to help them employ somebody to do that, if they did not have in-house capacity. We tried to make it as easy as possible. Some of the money is coming from the Rural Development Programme for England-not the bulk of it, but some elements-and that is European money, and it does have more of the checks and balances, unfortunately, of the European programme, so it can make it a little bit complicated. In many ways, handing over the money was quick and easy under Section 31 of the Local Government Act. Lord Heseltine actually commented that we used it and that was good, because it does give them the money and it does not attach strings to it. Clearly, they have got a business plan now and they are looking to deliver on it, which we are really pleased about.

Richard Benyon: I would not want the Committee to think that that is the only show in town. In addition to that, there is the broadband, the Farm and Forestry Improvement Scheme, rural economy grant scheme and the tourism money we have managed to finance through the growth review, which is really important. There has also been work on skills and knowledge transfer. All of these together, in a time of financial constraint, are starting to make a difference in the rural economy.

Q456 Chair: We are going to discuss this in a moment, but these funds that are from the Rural Development Programme for England. There is obviously potentially a transitional period between those that are currently-LEADER programmes, for example-in areas like Filey. Will the Government make up the shortfall in the interim if the budgets and the CAP reforms are delayed? What will happen?

Richard Benyon: There have been conversations about this, as you can imagine. I am assuming that the existing one will be rolled over for a period of time. We would have to do that because there are so many ongoing schemes that are legally binding and signed off. That would have to be the transitional arrangement you are talking about.

Sara Eppel: We have to have transitional regulations, which have not yet been written. We believe they are going to be a continuation of the current arrangements. In terms of your specific question about LEADER, we have actually just written out to the LEADER groups to say that we are giving them basic funding so they can hold on to capacity-a member of staff, for example. This means that they can continue to close the current programme and to develop the next programme. It is also so that we can evaluate the effectiveness of the arrangements at the moment with them, because we need to review how well they have all performed over the past seven years.

Q457 Chair: Is that purely RDPE money? Is it not Government money?

Sara Eppel: That is in the Rural Development Programme for England money, yes.

Q458 Neil Parish: It is about pumppriming money, really. It is estimated that the community groups are bringing forward a community Right to Buy scheme, estimated at about £40,000. What is Defra doing to support the local rural communities that want to take advantage of measures such as the Community Right to Build, Bid and Challenge the developing neighbourhood plans, but may lack the wherewithal to do it. Some parish councils are a reasonable size. Some only meet every couple of months. Some may have only a part-time clerk. How do we help those when they still could do with housing?

Richard Benyon: These are measures that are the chief responsibility of other Departments, but we work really closely to make sure that they are as effective as possible. The Community Right to Buy and those sort of community assets are incredibly important; they can really be a great engine for community cohesion where people come together and buy a pub or a village shop. I come across areas of breathtaking ingenuity by rural communities where this is happening. Your question is about trying to make sure it is as easy as possible for these communities to do that. Neighbourhood planning is a different one and it is quite expensive at this stage. Sara might be able to give more details about what we are doing with DCLG colleagues to make sure that the Localism Act is effective.

Sara Eppel: We already support the Rural Community Action Network, the network of 38 rural community councils, and ACRE, which is the managing body of that, has a great deal of expertise on neighbourhood planning. Certainly, their expertise is something that has provided support to those councils that are willing and interested to pursue it, so they are using the knowledge and the know-how to make these new arrangements for the planning. The other thing is that Communities and Local Government is doing a Pathfinder project, trying to evaluate how they are working and really to examine, in a lot of different types of areas, how they work in practice.

Q459 Neil Parish: You could have a village of, say, 2,000 to 3,000 houses and the parish levies a rate on those houses. Quite a reasonably-sized parish council knows to fund a full-time clerk and do these types of projects. If you have got a village that has perhaps 100 or 200 houses, it still might need a little scheme for six houses or 10 houses for the local workers, because there are no affordable properties. It is how we help them with a little bit of money just to get the scheme off the ground, and that is what I am particularly interested in.

Richard Benyon: Capacity-building is something that has to happen at a local level. Local authorities buying in to the whole localism agenda and making sure that there is a political imperative at that level is a great way forward. As a little example, I will give one of the things that I found most frustrating in the past. There was huge enthusiasm in a village for a parish plan, or community plan as they are now called. As part of that, there would be a design statement saying, "If we are going to have more houses, we want them to look like this. We want them to be in keeping with the character of the village and have these kinds of features." After a few challenges from a few developers, their status as supplementary planning guidance was removed. Now they have much more important status. In fact, local community, with the right support and capacitybuilding through organisations like the community councils, through good local leadership and through the local authorities, can make this a reality. People want to get involved then because they can actually make a difference in their local community, and that is why localism has to be made to work.

Q460 George Eustice: I just want to make a related point that also overlaps with DCLG to a degree, and that is the Home on the Farm proposals, which were around in the early days of Government; I know the Planning Minister made some announcements last week saying that they wanted to loosen that up. Could you just clarify: to what extent is that going to be something the Government is chivvying local authorities to do, or to what extent will it be centrally-prescribed?

Richard Benyon: It is an opportunity for new housing in an existing footprint, which resolves a great many difficulties when housing happens in or around the countryside. Home on the Farm is an opportunity, but it needs to be seen in the context of business use for redundant farm buildings as well. We all can see in our heads examples in our constituencies of farmyards where there are more people working now than there were ever working at the height of agricultural employment in the 19th century. That is exciting and some of them are in agricultural or rural-related industries and some of them are in creative industries and others. It is in that context that we want to see housing work. I just want to give our colleagues in DCLG as much support as they need to make sure that this happens and that it is not stifled locally. It can be a great help for a farming business to develop buildings that are no longer suitable for agricultural activity.

Q461 Ms Ritchie: Minister, what changes do you expect to be made to Axis 4 of the Rural Development PE as part of the CAP reform process? What are you doing to ensure there is not a loss of engagement, particularly in terms of the local action groups, during the hiatus that accompanies new funding periods?

Richard Benyon: LEADER will continue under the new RDPE. It is one of the few things that we are pretty certain about. We think it will continue to be 5% of the Rural Development Programme. "5% of what?" is the big question we are all asking ourselves as the moment, but we want to make sure that it is still an effective way of unlocking potential in rural communities for business use. I am a great fan of LEADER and there are some wonderful examples of LEADER groups. We do sometimes over-analyse, when we audit, what we are doing; okay, it is public money and there are legal requirements around European money, but also we can continue to work really hard to make it easier for people to apply. The good news is it is going ahead under the future programme and we have just got to make it relevant.

Q462 Chair: Did you say there was match funding?

Richard Benyon: Match funding for LEADER? LEADER is the European funding in total, is it not?

Sara Eppel: It is European funding. What I mentioned earlier was just a transition funding for 2014, because the programme ends in 2013 and the next one starts in 2015, so potentially there is a year gap, which for a LEADER group would be fairly catastrophic; you could lose all that capacity and knowledge and ability to bid. Therefore, we are providing some funding to make sure that they can keep some of the staff in each of those local action groups.

Q463 Chair: Are you aware that we have lost the organiser for the most successful, apparently-the North Yorkshire Moors, Coast and Hills LEADER programme?

Sara Eppel: I heard, and it is very disappointing.

Q464 Chair: Were you asked if there was any money in any pot?

Sara Eppel: Where we asked in advance, no, but the LEADER groups had always said it would be an issue, and we have written as soon as we could, which I think was last week. Hopefully that will reassure other LEADER groups that there will be some base funding.

Q465 Neil Parish: Bluntly, what criteria do you use to judge the effectiveness of the Rural Communities Policy Unit?

Richard Benyon: It might help the Committee if I just explain the rationale of why we set it up, and then I hope you will judge that it has been the resounding success that I feel it has been. We wanted rural policy to be close to Ministers. We all came from rural backgrounds and rural constituencies, and we wanted to drive policy from within the Department. We felt that, by setting up a unit that drew in some of the expertise from the Commission for Rural Communities and expertise from elsewhere, within Defra and without, we could set up something that was going to be very effective in driving forward our policies on such things as rural proofing, broadband and others. It has been a really good experience for Ministers to be able to call on expertise, not just in service provision and delivery, but for economists and statisticians elsewhere to be able to say, "This is not working. We have got to do something to make it better for this activity or that activity in rural communities." Whatever happens in the future, this kind of policy advice for Ministers-keeping it close and within the Department-is going to be the future.

Q466 Neil Parish: I know the last Agricultural Minister, Jim Paice, set up a farming network group-

Richard Benyon: Him and me.

Q467 Neil Parish: Including you, sorry; I beg your pardon. This is actually feeding in to the Rural Communities Policy Unit, is it?

Richard Benyon: Yes. The Rural Communities Policy Unit oversees that new initiative. That came out of an experience Jim very strongly felt in the past, the old-I cannot remember what they were called. They were very much agriculture-based.

Sara Eppel: It was Don Curry’s commission.

Richard Benyon: Yes. These groups went out and about in the country and Ministers formally met them. We wanted to extend it beyond agriculture and make sure that it was across the rural economy. We have now got it right across England and it is a two-way communication tool. Not only is it for us to make ourselves accountable to them when we go around the country, but it is also for us to say, "We are thinking of doing this; what do you think?" It is also for them to say, "This is working," or "That is not, and we suggest you make these changes." It is a really open and unbureaucratic system of communication.

Q468 Neil Parish: That I very much welcome because it is about making sure that these networks are able to actually feed in and you are actually listening; otherwise you get caught in the bureaucracy.

Richard Benyon: They are all really intelligent and informed people. What I am absolutely conscious of is if this became a bit of rural wash, they would walk. It has to be a really effective communication system where they feel they are getting something out of it and we as Ministers feel we are, as well. Just to take the example of your area and the floods, not only do we have the communication we have through the usual channels of local authorities and local MPs, but we also have the rural farming network saying, "We have got some serious problems in this particular area and you should be aware of it". It has been invaluable.

Q469 Dan Rogerson: In this room, we are all very much aware that there is poverty in rural areas and there is social deprivation and people living in difficult circumstances. Do you think that the unit should have a specific policy focussed on reducing rural social deprivation?

Richard Benyon: I made it very clear right from the start that that is something that is one of the two key parallel streams that guided the creation of this unit. On the one hand, we accept that if you are elderly, sick, out of work, mentally ill or just on a low income and you live in rural areas, the problems you face are exacerbated by rurality. Therefore, we want to make sure that service delivery for those people focuses, like a laser beam, on the problems that they face. Parallel to that is all the growth stuff that we have been talking about, but an absolutely fundamental part of what we are talking about is making sure that there is a much more equal delivery of services to the most needy in rural areas.

Q470 Dan Rogerson: Another area that has been raised with us by other witnesses is this issue around small schools and the future for those under changes to the funding formula in education. What work have the policy unit undertaken in ensuring a rural proofing of that funding formula that the Department for Education has been working on?

Richard Benyon: There has been work at a ministerial level and there has been work through the RCPU.

Sara Eppel: It is one of the challenges, I have to be honest, and I do not think we are at the end of the roads with it. There is a lot more to do. Ministers have talked to each other, and we have talked to the officials. There is much more work to be done.

Q471 Dan Rogerson: That work is ongoing? You have not conceded defeat on this.

Sara Eppel: Yes

Richard Benyon: It certainly is.

Q472 Dan Rogerson: Excellent; that is good to know. In terms of carrying out the work more generally on rural proofing, of which that is an example, when will the toolkit be published so that we know all the other Departments are aware of how they will be held to account?

Richard Benyon: I have it here. This is the abbreviated version. This is just a guide for officials in different Departments about how to approach it. There is a lot that is ongoing in terms of active rural proofing of policy areas, service provision and the Health and Social Care Bill-all of these other areas of Government. Then assistance is provided; Sara can give you some examples of how we are providing people actually out on the frontline about how they can deliver particular areas of Government policy.

Sara Eppel: Yes. In terms of the tools that you mentioned, as the Minister says, this is the little takeout, as it were, for people-officials probably-to take away from the workshops that we are about to run with them. We actually had some scheduled for this week that we have had to move, because the Departments have had clashes. We are also developing a web tool, so that we have different levels of information that people can access through different routes. We have already done the localgovernment-level toolkits with the Local Government Association, and we have done a health toolkit with the Department of Health and doctors and commissioning bodies. What we would like to do is, basically, bring those together so that there is a cluster of different toolkits, depending on the profession, because there are some specifics where people like to see some examples of practice.

Q473 Dan Rogerson: So it exists, but you have not had workshops yet. Does that mean it is not with people yet, or will they have been sent copies?

Sara Eppel: It is not with them yet. The workshops are really to test it: do we need to refine it? Are there other questions they have got that we have not covered?

Q474 Dan Rogerson: So a draft is in existence, but there is work to be done to actually roll that out across Government?

Sara Eppel: Yes.

Richard Benyon: We are happy to leave it with you.

Q475 Chair: We had a report published in February 2011 that we think was very well received on uplands. In the Department’s response, the Department promised to give regular rural statements. Have we had one yet?

Richard Benyon: We tied in a lot of the uplands statement into our rural statement, which was a cohesive, and I hope coherent, drawing together of a number of different strands. Since then, a number of different things have happened in relation to uplands areas. We want to make sure that we take forward what was said in that-that as many farmer as possible, for example, are accessing uplands Environmental Stewardship and Agri-Environment schemes and that we are providing the service provision that we were talking about. In terms of a regular update, what assurances can we give the Committee?

Sara Eppel: It is not my policy area, so we would have to write to you on that one.

Q476 Dan Rogerson: It would just be interesting to know when we might get a rural policy statement and what you, Minister, would like to see in it.

Richard Benyon: As I say, we published the rural statement in September of last year, which took forward and explained where we were on many of the uplands issues. This is the definitive focus on what we are all about.

Chair: We thank you most warmly for being so generous with your time and participating in our inquiry, Sara Eppel, and you, Minister. Thank you very much indeed.

Prepared 8th February 2013