Examination of Witnesses
(Questions 280 - 296)
WEDNESDAY 21 OCTOBER 1998
MR JOHN
EDWARDS, MR
MARK PEARCE
AND MR
BRIAN WILSON
280. What experience have the RDC had of assisting
in the process of agricultural adjustment? You have spoken of
the programme linked to the last CAP report.
(Mr Edwards) I think Mark has outlined the programme
that we ran for almost four years.
281. How successful was it?
(Mr Edwards) We believe it was very successful. It
was a policy instrument designed specifically to deal at that
time with what we saw as the impacts of CAP reform. In fact, because
of the devaluation of the green pound at that time agriculture
adjusted very well to the CAP reforms but the programme itself
proved that by operating at a local level, bringing together the
key partners and key players and developing particular initiatives
which are relevant to the local area you can actually make some
quite considerable difference. The programme was independently
evaluated and proven to be successful. That sort of instrument
does work but, again, it looks at the wider rural economy, not
specifically at agriculture. The problems are generated by agricultural
change and therefore job losses and problems through the supply
chain, but how do you then look to adapt the structure of the
local economy to cope with those changes?
(Mr Pearce) Following on from these CEP areas, most
of them were designated as 5b areas, the mechanism and partnership
has been built to draw down 5b funds. The number of value added
projects such as the Marches' initiative are exactly the value
added initiatives we are talking about as ways to generate more
income. There are a number of value added projects that have emerged
from the CEP and 5b processes.
Mr Hayes
282. I want to start by saying that I am very
grateful for all the work that you do in my constituency and also
for your lucid evidence, much of which is familiar to me. Many
of the observations you have made already and in your written
evidence are familiar to me. You specifically mentioned South
Holland as an exception to the rule almost. You say that South
Holland employes a large number of people and that much is true
but I would like you to develop that, and Mr Todd alluded to this,
because there are areas like South Holland where not only are
there a disproportionately high number of people employed in agriculture
but where the other employment, the other main industries, is
very closely agricultural related. The net effect of that is to
produce a very narrow economic base which is vulnerable to downturns
in the agricultural sector. I wonder if you have done much work
on that and how you see us compensating for that in public policy?
What research have you done on that? I will ask my second question
as well. The second part of what I wanted to say relates to something
that has been said by colleagues. It is this definition of rurality.
I have done my own work on this in terms of measuring rurality
as a balance between agricultural employment and sparsity because
the remoteness that you describe is a critical factor in defining
rural deprivation. There is not actually that much public work,
published information, on getting a really accurate definition
of rurality. I have done some work defining parliamentary constituencies
by that mix. I wonder if you could comment on the sparsity factor.
You talked about relative remoteness, you did not actually use
the word sparsity, but the sparsity factor in assessing the impact
of problems and adjusting, if you like, public policy to help
the areas in most need.
(Mr Edwards) Can I ask Brian Wilson just to deal with
that last issue first which is about indicators in areas of local
deprivation, how you actually define and identify rural deprivation,
and I will come back to your previous question about areas which
are heavily dependent on agriculture and therefore vulnerable
to agricultural downturns.
(Mr Wilson) We certainly share the concern that commonly
used indicators of disadvantage used in national resource allocation
systems and that are used to target policies do not pick up very
well the aspects of disadvantage that apply or are more relevant
to rural areas. If I can just take an example. We have particular
concerns about the Department of the Environment, Transport and
the Region's own index of local deprivation which includes indicators,
for example, one on car ownership and that is clearly quite a
good proxy perhaps of incomes in an urban area but in a rural
area it does not work because the car is a necessity for most
people and even one or two of the other indicators like overcrowding,
are really more features, if you like, more characteristic of
urban areas. We certainly have concerns that a number of formulae
and systems—that is one of them and the SSA for local government
finance would be another—are picking up urban disadvantage
much better than they are rural. Also I think they find it easier
in a sense to count urban disadvantage because it tends to be
geographically concentrated, for example on to local authority
housing estates, whereas disadvantage is a bit more scattered
in rural areas so you cannot identify those pockets of disadvantage
quite so clearly. The work we have got in hand at the moment is
to try and develop some better indicators. The suggestion that
we have had from an academic, and which we are planning to take
forward, and we have been discussing this with various partners,
is to develop what we are calling bundles of indicators. It is
a terrible phrase. If I can just give one example. Rural disadvantage
seems to be quite complex and not easily measured by a single
indicator. For example, if you want to measure poor access to
services what you need to do is to find out those areas which
do not have a shop and they do not have a regular bus service
and then the number of people there who do not have access to
a car. If you combine those then you are beginning to get behind
some of the complexity of the issue and measure the real numbers
of people who are disadvantaged. There are actually about seven
or eight bundles that are suggested in the work that Cambridge
University have put to us. That is a piece of work that we hope
to take forward over the next six months to a year and we are
in contact with Government departments about how useful that could
be.
Mr Marsden
283. What I am surprised at is that you do not
seem to have mentioned in your figures about indirect agricultural
employment. You have talked about the farm workers, the farmers
themselves and so on, but clearly those figures would rapidly
increase with agricultural suppliers, and in my constituency instead
of talking about five per cent employment we would be talking
about 20 or 30 per cent. Why do you not include those in your
analysis? What is your comment on that?
(Mr Edwards) We do have some figures for indirect
employment. I mentioned, for example, the figures for tourism
where you have got 320,000 directly, or 380,000 if we include
the indirectly employed. There are multipliers for those people
affected by agricultural change. If you lose income levels in
a rural area you affect the machinery suppliers, you affect the
grain suppliers and others as well. There is a wider variety of
employment opportunities indirectly related to agriculture. Yes,
we are aware of those and the impact that has if you have a downturn
in agriculture. I think the CEP, the Countryside Employment Programme,
was a way of trying to address that by saying you need to deal
with the problems off farm as well as the problems on farm.
Mr Todd
284. You have mentioned tourism as one possible
source of diversification. Have you any measurements, firstly,
of how prevalent that is in farming and, secondly, what sort of
money is being generated from it and, thirdly, the seasonality
of that? It is only one example of diversification that is available.
Do you have any impression of whether planning constraints by
local authorities restrict the potential of farmers to develop
other opportunities of employment on their farms? Have you also
explored how to cluster businesses of like intent around farm
activity?
(Mr Edwards) Can I just ask Brian Wilson to deal with
the issue of planning. We have had two lots of research in the
last few years on the impact of planning policies in rural districts.
(Mr Wilson) Although there is broad research looking
at planning and land use development in rural areas, I would say
that potentially, yes, the planning system could restrict diversification.
I suppose the positive aspect is that the planning system tends
to encourage the reuse of existing buildings, so where they exist
clearly they can be used for diversified activities. But, having
said that, certainly there are increasingly restrictions being
put by local planning authorities on the uses to which buildings
can in fact be put. For example, they may impose restrictions
on uses which generate extra traffic.
285. I think it would be useful if you could
provide a written note on the particular context of that because
I notice that is not specifically explored here.
(Mr Wilson) We will do that.
(Mr Edwards) To answer your other question about diversification.
There is no real hard research at the moment on the impact of
diversification on farm business although anecdotal evidence suggests
that most farmers diversify initially into what one would call
near-agricultural business, so they go into contracting, they
go into road haulage. Some will then take that next step of going
into tourism development and, for example, converting buildings
for employment generating uses. There are no real national facts
and figures on earnings and income from diversification but some
early local studies suggest that on farm diversification was of
some limited benefit, it generated some additional income for
the farm holding but did not create large numbers of jobs. We
understand that MAFF are just about to start to collect figures
as part of the agricultural census but they are not yet available.
They are going to look at the impact of diversification on farmers
as well.
Ms Jones
286. I am not sure whether you have to a certain
extent answered this question. We have talked about self-employment
and the levels of self-employment in rural areas. What are the
policy implications in relation to having a large amount of small
firms or self-employed people who may or may not employ one or
two others?
(Mr Edwards) If the economy is dependent primarily
on fairly small firms, it is a very volatile sector, people move
into and out of it very rapidly so you get quite a high turnover
of businesses. I think again the point I was making earlier on
is that one needs to look in terms of policy delivery, at how
you actually support those businesses in their growth phase. Business
Links for example primarily target businesses employing ten or
more people, although they do make their services widely available.
In a rural community, the majority of businesses employ less than
ten people so you need to tailor policies by Business Links and
others that actually deal with the micro businesses which is a
feature of many rural areas, both in the way that they develop
policies and I think more importantly the way they deliver support
for business as well.
287. How do you evaluate in terms of small business
whether a small business has a potential for growth or, I suppose,
somebody who has decided to set up in self-employment and may
or may not employ a secretary, etc, which has nothing to do with
the rural economy?
(Mr Edwards) I suppose if I could answer that question
I would be playing the Stock Exchange, not working as Chief Executive
of the RDC, but it is a very difficult area to identify the growth
business.
288. Can you just explain to me because obviously
you have figures in terms of identifying what small businesses
are but there is an increasing trend I would assume in rural areas
for people to move out to what is a clearly desirable environment
via IT, if you like, they are running a business which they now
find they can run from home as a consultant in a variety of industries
which may have nothing to do at all with the rural economy and
the only potential for growth for that business would be that
person may take on some administrative/secretarial help, how do
you evaluate those types of businesses in relation to the type
of business which might be a genuine business set up in a rural
area with a direct relationship to the area which has potential
for growth?
(Mr Edwards) To deal with your first point first,
which is about telecommuters, if you like. The greatest growth
in telecommuting has been around the major centres of population,
places like Surrey and Kent, people choosing to work from home
either part-time or full-time rather than commuting to major centres
of population. It is not yet a feature of many more remote rural
areas. In terms of looking at the sorts of businesses, if a business
is established in a Rural Development Area, almost by definition
it is serving the local economy and the regional economy and not
the national economy so it is a business which is very important
to that area. As to trying to define those businesses which have
growth potential, I think those sorts of questions need to be
directed more at Business Links delivery service than at the RDC.
I think what I would say is you need to look at the reason somebody
has established a business and what their ambitions are for that
business. Some people take very clear decisions about what they
want a business to be and a business to do. They may only ever
want it to be a one person business, or they may have real ambition
to develop that into a significant local and then regional player
and if they are in that latter category, it is the way we deliver
support to those businesses to take them through their growth
phases. Taking on their first employees to move from owner management
to team management. Business growth is not a smooth line, it is
a series of incremental steps. It is how you hit the business
at the time that it wants to make that next step change in the
way it is structured and you can only do that by maintaining contact
with that business. It is important that Business Links particularly
have a regular contact with businesses below ten employees in
most rural areas and working with them that they start to try
and develop their businesses.
Chairman: I can see Fiona Jones would like to
pursue this. We have five minutes and three important question
areas.
Ms Jones
289. Can I just make one very brief point. I
think one of the points that has been made, not just in relation
to this question but several others is that the growth in relation
to various areas is around Surrey or around conurbations etc.
Well that is obvious because wherever there is a higher population
area there is obviously going to be a higher growth in any particular
industry. The point I am trying to make is is there a clear definition
of what a one man business, if you like, might be which has got
no connection whatsoever with the local community and a business
which has the potential to give some advantage to the local community?
I do not think it is relevant that one man businesses may or may
not be setting up in Surrey or wherever.
(Mr Edwards) That is an issue both of the reason that
business is established but also, as I said, its location. If
you are in a remoter area by definition you are serving very much
the local economy.
Ms Jones: I would not have thought it was the
definition of the business itself. Clearly somebody who has developed
a business in a commuter related industry is not necessarily going
to employ local people.
Chairman: I am sure this is going to relate
to a conclusion but I want to get through other questions in three
minutes so, I am sorry, I must move on to Diana Organ. I am sorry.
Mrs Organ
290. Can I just ask, obviously we all know about
the depletion of key services in rural parishes where population
is falling and fairly sparse and where also possibly full-time
employment in that immediate locality is scarce. How can these
key services be restored? The second question I would like to
ask is should we think about even doing it where we have minimal
population in very remote areas?
(Mr Edwards) I think it is very difficult. One cannot
really see an easy way to stem major social and economic changes.
These are lifestyle decisions that people are making about where
they live, what they do and how, for example, where they shop.
Local services are important to the most disadvantaged groups
in rural areas—the elderly, the young and those on low incomes—and
particularly if you cannot afford to run a car. About 20 per cent
of rural households do not have a car and if you do not have a
car and you do not have public transport you are isolated, by
definition, and find it difficult to access services. There is
help: tax and planning policies can help. The recent help for
village shops, for example, will certainly help to stem the decline
in village shops and creating linkages between village shops and
some of the major retail chains might help. Also you need to look
at the way people gain access to services, public transport, community
transport. Innovation in the way services are delivered. More
joint provision. Looking at the way, for example, that school
buses run, looking at the way that health care is delivered and
the sorts of services that are available there. Post buses. So
you look at combinations of services as well. We have to be I
think—it is an awful word—more innovative in the way
that we look at the provision and delivery and access to services
in a rural context. It is going to be very, very difficult to
turn around 30 or 40 years of change in the way those services
are being delivered, the way people gain access to those services
is most important.
291. We should do it?
(Mr Edwards) Yes.
Chairman: I want to get on to Mr George's questions,
very briefly, I am afraid.
Mr George
292. I now want to come on to the European Commission's
proposals for rural development and the regulation, particularly
Article 31. You have already commented on the issue of, what I
consider to be, the cultural suburbanisation of rural areas: as
the "sons of the soil" leave so the "computer anoraks"
come in from the suburbs — just to paint a rather dramatic
picture. First of all, do you really interpret Article 31 as an
opportunity to redress the balance for the rural population or
simply as a means of shoring up the economy in some other way?
(Mr Edwards) I do not feel able to answer the latter
question but certainly the inclusion of Article 31, as it were
bringing into the CAP measures some of the activities previously
supported under Objective 5b, is welcome but certainly in an England
context the way that it is supporting the rural economy needs
to be interpreted as widely as possible and not be something that
is restricted entirely to agriculture or to farmers. We need to
have a mechanism which is clarified and available to non-farm
businesses and non-farm projects in a way. So, yes, there is an
opportunity through Article 31 to reuse resources for Europe in
a much more expansive and innovative way that supports the needs
of England's rural areas so, yes, we would support that.
293. How realistic do you think your proposals
are particularly as you are proposing in your first memorandum
to include extra activities under Article 31, given the fact that
the purpose of the Commission and of the Union is to secure the
economic regeneration of failing rural economies and also that
MAFF will be responsible for administering that in Britain? How
much do you think that your very laudable concerns about bus services
and affordable housing and so on can achieve the necessary requirements
for outputs and outturns which I know the RDC is very interested
in in terms of economic development in terms of either securing
or safeguarding jobs?
(Mr Edwards) Again, I do not think I can answer the
question of how successful we believe we will be in persuading
the Commission as it looks at amending CAP reform to take account
of those needs but certainly if one looks at the economy of England's
rural areas, whether it be in the accessible or remoter rural
areas, it is characterised by a variety of businesses and if the
measure is designed to regenerate rural areas then it needs to
address those wider issues and not only to focus on farms or agricultural
businesses, otherwise I think by definition it will not be successful.
Chairman
294. This is a subject I would like to spend
another hour on but we are running out of time and we have to
draw things to a conclusion here. There are issues that have arisen
during this session and there are questions we wanted to ask which
we have not. If we may, we will put those to you in writing and
ask for yet a third memorandum. We really have appreciated the
way you have shared your researches and your thinking with us
and we are very grateful to you. Next time you come before us
you will be part of the Countryside Commission, I suspect!
(Mr Edwards) No, we will not be part of the Countryside
Commission. We will be part of a new agency formed from the Countryside
Commission and the Rural Development Agency.
Chairman: That is an encouraging response.
Mrs Organ
295. What will it be called?
(Mr Edwards) We have put suggestions to Ministers
but we have not had a response yet.
296. What was your suggestion?
(Mr Edwards) We will have to wait for what Ministers
have to say before we answer that one!
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