Supplementary Memorandum
submitted by the Rural Development Commission (H25)
RURAL ENGLAND—BACKGROUND PAPER ON TRENDS
AND CONDITIONS
SUMMARY
Considerable differences exist in the economic
and social conditions found across rural England, not least between
more accessible and more remote areas. However, a number of overall
issues and trends can be identified:
— population: the rural population
is increasing and 1 in 5 of the national population now lives
in rural areas. It is more elderly than the national population;
— the rural economy: the make-up of
the rural economy—the mix of employment sectors—is
now similar to that for the national economy. There has been considerable
restructuring, with traditional sectors, such as agriculture and
the extraction industries declining, whilst service sectors have
expanded;
— employment: business performance
and employment growth has been good in most rural areas and contributed
significantly to the national economy. However, some rural areas
face considerable economic problems and a disproportionate number
of rural jobs may be considered low quality;
— disadvantage: key aspects of rural
disadvantage, some of which are quite distinct from urban issues,
are poor access to services, low incomes, a lack of quality job
opportunities and a lack of affordable housing;
— access to services: there is a paucity
of local services (such as shops, post offices, schools and doctors)
and, for some, this problem is compounded by a lack of public
transport to services elsewhere. Population groups like the elderly,
women and the young may find this a particular problem. Public
service accessibility is not helped by resource allocation systems
which bend funding away from rural areas.
POPULATION
1. Some 9.3 million people live in rural
England[1]
or 1 in 5 of the population. Of these, 3.1 million live within
Rural Development Areas[2].
2. The age structure of the population living
in rural districts[3]
differs from that in other types of area by having more elderly
people and fewer young adults. 21 per cent of the population in
rural districts is of retirement age, compared with 18 per cent
for England as a whole. Only 20 per cent of the rural district
population is aged 15-29, compared with 23 per cent for England.
3. Since the 1960s the trend has been for
the population of rural areas to increase and at a much faster
rate than in other areas. The increase in the rural population
from 1971 to 1991 was 17 per cent, while the increase nationally
was just 4 per cent. The counties with the fastest percentage
growth during the 1990s have been Cambridgeshire, Berkshire and
Buckinghamshire.
4. Over two-thirds of the population growth
in non-metropolitan areas has been as a result of (net) in-migration,
with the remaining growth due to an increase in the local population
(ie more births than deaths). However, this masks large variations,
from counties like Devon and Dorset where all the population growth
results from in-migration, to some Home Counties where an increasing
local population predominates.
AGRICULTURE
5. Across England 420,000 people were employed
in agriculture in 1996 (including those in full and part-time
employment). Some 1.8 per cent of the national workforce is employed
in agriculture, though this figure is 4.4 per cent in rural districts
and 10 per cent in Rural Development Areas. Agriculture remains
a key employer in some districts: the highest being 16 per cent
of employment in South Holland (Lincolnshire) and in Torridge
(Devon).
6. Some 43 per cent of the agricultural
workforce are farmers and farm directors/partners, with a further
11 per cent being their spouses and 6 per cent other family members.
The remainder comprises salaried managers (2 per cent), regular
hired workers (23 per cent) and seasonal or casual workers (15
per cent).
7. Nevertheless, employment in agriculture
has been in long-term decline and the loss of jobs over the 1986
to 1996 decade alone has been 68,000 or 14 per cent. Almost all
of this loss has been among employees, with very few job losses
among farm owners and their families. A related trend has been
the diversification by many farmers into other activities such
as tourism.
THE WIDER
RURAL ECONOMY
8. The rural economy is diverse and the
mix of employment in services and manufacturing sectors is similar
to that across England as a whole. Figures for rural districts
indicate that the only significant differences are more of the
workforce being employed in agriculture and less in financial
services (see over page).
Table 1
Proportion employed in economic sectors (1991)
| Rural Districts |
England |
| % | % |
| manufacturing | 17 | 18
|
| services (except financial) | 55
| 55 |
| agriculture | 4 | 2
|
| financial services | 11 |
13 |
9. In reaching this position the rural economy has undergone
(and continues to undergo) considerable restructuring, with the
decline of much of its traditional employment base. Figures for
Rural Development Areas show that between 1981 and 1991 the extraction
industry and agriculture sectors shed large numbers of jobs, whilst
distribution, catering, financial services, construction and "other"
(public and caring) services were the main job creators. Indeed,
the job losses in the extraction industry and agricultural sectors
were proportionately greater in Rural Development Areas (50 per
cent and 16 per cent) than in England as a whole (38 per cent
and 12 per cent). However, the number of jobs in manufacturing
stayed broadly level in Rural Development Areas, whilst falling
nationally, and the proportionate increase in service sector jobs
was greater than that nationally.
10. Tourism has become a major employer in many rural
areas. It is estimated that spending by visitors in rural England
was over £10 billion 1994, supporting 320,000 jobs directly
in the tourism and recreation industries, and supporting 380,000
jobs in total (once linkages to other economic sectors are taken
into account).
11. Many rural counties have low per capita levels of
Gross Domestic Product (GDP). The lowest GDP levels in England
are found on the Isle of Wight (68 per cent of the national average)
and Cornwall (73 per cent), while other (mainly peripheral) rural
counties also have low GDP.
RURAL FIRMS
12. In 1994 there were 426,000 (VAT-registered) firms
in rural districts or one third of the national total. This high
rural figure partly reflects the small average size of rural firms.
A study for the (then) Department of the Environment showed that
41 per cent of rural employment was in firms with no more than
10 employees, compared with 31 per cent in urban areas. Conversely,
there are fewer large firms—a recent RDC study found that
only 1.4 per cent of rural firms had 100 or more employees (compared
with 2.2 nationally). This has meant that private sector involvement
in regeneration tends to be more difficult to achieve in rural
areas.
13. Rural firms have performed relatively well, thereby
contributing significantly to the national economy. Research looking
at manufacturing firms in remote rural areas found that, over
the 1991-95 period, they increased their employment by 17 per
cent, most increased turnover (despite the early 1990s recession),
the great majority made a profit in every year and only 13 per
cent of them went out of business. There appear to be some differences
in the performance of firms located in more accessible rural areas
and those in more remote rural areas, though the research evidence
is sometimes contradictory. However, it seems that remoter rural
firms can be less innovative, placing less emphasis on hi-tech
products and production processes, and they experience greater
constraints on growth (eg a shortage of skilled labour, including
managers). Research also shows notable differences in market orientation,
with remoter rural firms specialising more in products that meet
recent consumer trends and for which demand could be more volatile.
EMPLOYMENT AND
UNEMPLOYMENT
14. In rural districts there are 6.7 million people in
employment, 82 per cent of the working age population. This is
an increase of almost 250,000 (3.8 per cent) over the 1992-98
period, well above the 0.9 per cent increase recorded nationally.
15. However, the figures indicate that a relatively high
proportion of rural jobs may be unsecure or poorly paid. High
levels of self employment are a feature of rural areas, probably
reflecting the importance of agriculture and small firms, and
the lack of local job opportunities, as much as entrepreneurialism.
In rural districts 15 per cent of all employment is self-employment,
compared with 12 per cent nationally, and in some Rural Development
Areas roughly 25 per cent are self-employed (eg Cornwall, Devon,
North Yorks, Herefordshire). Part-time employment is also slightly
more prevalent in rural districts, accounting for over 26 per
cent of rural employment. The seasonable nature of employment
is a significant factor in many rural areas, especially where
tourism and agriculture are strong. The unemployment rate in Rural
Development Areas fluctuates by about 1 per cent over the year
around the national rate, as a result.
16. Headline unemployment rates for rural areas are generally
below the national rate. Latest (1998) figures, using the international
unemployment definition, show that the rural rate for rural districts
is 4.2 per cent, compared with a national figure of 6.1 per cent.
However, this masks considerable variation within rural areas.
The claimant count unemployment rate, which gives lower figures,
shows that individual Rural Development Areas had rates as high
as 8.3 per cent (Redcar and Cleveland), 7.9 per cent (Doncaster),
7.1 per cent (Isle of Wight) and 7.0 per cent (Cornwall). (It
is not possible to calculate rates on the international definition
for these areas.) In addition, research has shown that Rural Development
Areas contain disproportionately large numbers of people who do
not get recorded by the unemployment data, but who might be considered
as "hidden unemployed".
17. It is often thought that long distance commuting
is a feature of rural areas. There is only limited evidence available.
One study in the Cotswolds found that 61 per cent of firms' employees
travelled less than five miles to work and 92 per cent less than
15 miles, while research on larger rural firms found that most
of their workforce was local and long-distance commuting was unusual.
The RDC has further work in-hand to shed more light on this.
INCOMES
18. Earnings in the most rural counties are well below
the national average, as the figures show below:
Table 2 COUNTIES WITH LOWEST AVERAGE WEEKLY EARNINGS
(1997)
| Male | Female
|
| £ | £
|
| Cornwall | 315 | 241
|
| Northumberland | 332 | 266
|
| Isle of Wight | 341 | no data
|
| Shropshire | 349 | 239
|
| Lincolnshire | 351 | 254
|
| ENGLAND | 414 | 301
|
19. Research published in 1994 by the RDC showed that
significant numbers of rural households had incomes below 140
per cent of the Income Support level—(a frequently used
measure of low incomes). In nine out of 12 rural case study areas
over 20 per cent of the households fell into this category. In
one area—rural Nottinghamshire—the figure was 39 per
cent of households.
RURAL SERVICES
20. Many rural people are without easy access to essential
services. Figures from the Commission's latest Survey of Rural
Services show:
Table 3 PROPORTION OF RURAL PARISHES WITHOUT KEY
SERVICES (1997)
| no permanent shop | 42% |
| no post office | 43% |
| no GP surgery | 83% |
| no school | 49% |
| no Job Centre | 99% |
21. The lack of local services is often compounded by
the paucity of bus services in rural areas. The 1997 Survey of
Rural Services found that 75 per cent of parishes had no daily
bus service and this was a marked deterioration since the 1991.
Information about a wider range of services is provided at Annex
A.
22. Parishes with the smallest populations are most likely
to be without services. For example, 59 per cent of parishes with
under 1,000 people have no permanent shop, yet this figure was
one per cent for parishes with 3,000 to 10,000 people. However,
the more populous parishes experienced the most marked decline
(1991-97) in services such as buses, banks and police stations.
There were also some notable geographic variations, with key services
being least available in Cheshire, Shropshire, Dorset, (former)
Hereford and Worcester, Lincolnshire and North Yorkshire.
23. Inevitably, therefore, car ownership is higher in
rural areas, though almost 20 per cent of rural households are
nevertheless without a car. Rural people make roughly the same
number of journeys as people in other areas, but they travel 1.8
times as many miles and more of their journeys are made by car
(69 per cent of them, compared with 59 per cent nationally).
24. The paucity of local services is of particular concern
to groups such as the elderly, women and young people, groups
who may be unable to drive or lack access to a car. For example,
the lack of childcare facilities—93 per cent of rural parishes
have no public nursery and 86 per cent no private nursery—is
likely to constrain women's employment options.
HOUSING AND
HOUSEHOLDS
25. There are nearly 4 million dwellings in rural areas,
which is 20 per cent of the national dwelling stock. Approaching
5 per cent of the stock in 1996 had been built since 1991.
26. The pattern of housing tenure in rural areas differs
substantially from that nationally, with relatively little social
housing and more which is owner-occupied.
Table 4
Proportion of housing by tenure (1995)
| Rural | England
|
| % | %
|
| owner-occupied | 73 | 67
|
| private rented | 12 | 10
|
| local authority | 13 | 19
|
| housing association | 2 |
4 |
27. The acute shortage of affordable housing is a key
issue in rural areas, resulting both from the lack of social housing
and the high demand for housing. There is competition for market
housing, not only from more affluent locals, but also from in-migrants,
second home owners and (in some areas) for holiday lets. Research
found that in a significant number of rural districts as many
as 40 per cent of new households could not afford to buy a home.
In some cases local people find themselves pushed out of the area
in search of more affordable housing elsewhere. It was estimated
that 80,000 additional affordable homes were needed in rural areas
between 1990 and 1995, yet only 13,000 were built (mostly funded
by the Housing Corporation's Rural Housing Programme). Similarly,
research in 1992-93 showed that over 16,100 rural households were
accepted as homeless that year—12 per cent of the national
total.
28. The DETR's (1992-based) household projections showed
that 4.4 million extra households were expected to be formed from
1991 to 2016. Subsequent research for the RDC estimated that approaching
30 per cent of these would be formed in rural districts. The fastest
rates of projected growth are for counties to the north and west
of London, particularly Cambridgeshire, Buckinghamshire and Wiltshire.
Away from the south coast, the growth in numbers of households
in rural areas results, in almost equal measures, from changes
amongst the existing rural population and from in-migration.
29. However, the condition of rural housing tends to
be better than elsewhere, with 5 per cent of it defined as unfit
for habitation and 10 per cent as in poor condition (compared
with 8 per cent and 15 per cent respectively in urban areas).
RESOURCE ALLOCATION
30. The Standard Spending Assessment (SSA) formula is
used to allocate resources which fund local authority services
and there are similar funding formulae for other public service
areas. SSAs take account of the relative need for and cost of
providing services in different local authority areas, so that
each local authority should be able to provide similar service
levels to its residents. SSAs are lowest for shire areas. 1997-98
SSAs per head were £670 in shire areas, £717 in unitary
authorities, £778 in metropolitan areas, £832 in outer
London and £1,160 in inner London. Various research now suggests
that these differences in SSA levels are greater than can be justified.
For example, a report for the RDC concluded that the SSA formula
works to the disadvantage of rural areas, because it uses indicators
of economic and social need which measure (essentially) urban
issues, it fails to measure rural aspects of need and it takes
little account of the extra cost of delivering services in sparsely
populated areas. These extra costs result largely from additional
travel costs and time to deliver services and from the need for
smaller service centres (eg schools) without the economies of
scale. Research has also shown that, as a result, people living
in rural areas receive significantly fewer local authority services
than their urban counterparts.
31. Similar points can be made about the methods used
to distribute other public resources, such as health authority
funding, funds for social housing and the Index of Local Deprivation
used to help target the Single Regeneration Budget.
25 September 1998
1
Where possible data has been used that matches the RDC's working
definition of "rural areas" ie all settlements in England
with a population under 10,000, so including those living in open
countryside, in villages and in small country towns. Back
2
Rural Development Areas are those rural areas with the largest
concentration of economic and social disadvantage, where the RDC's
regeneration activities are targeted. Back
3
In some cases data are only readily available down to a local
authority district level. In such cases the phrase "rural
districts" is used, which refers to data for the 149 most
rural English districts.
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