The Rural Advocate's June 2008 report to the Prime
Minister estimated the untapped potential from rural businesses
to be between £236 billion and £347 billion per annum.
The Department for Environment, Food and Rural Affairs (Defra)
was reluctant to say whether it agreed with these figures, or
to give its own assessment, citing the challenge posed by the
number of variables involved. However, if the Rural Advocate's
estimate is of the right magnitude, tackling the factors that
inhibit the growth of businesses in rural areas could make a substantial
difference to the performance of England's economy as a whole.
We believe that, despite the difficulties, Defra should produce
its own estimate to assist it in making a case for the resources
to address the factors inhibiting the growth of the rural economy.
These factors tend to be small scale and specific
to a location. The rural economy is a complicated concept, but
the problems affecting rural businesses can often be simply articulated.
They are practical problems, requiring practical solutions. The
differences between running a business in a market town and a
smaller rural community seem to us at least as significant as
the differences between running a business in a market town and
a city. Unfortunately, we found little to convince us that Defra's
present approach to the rural economy will deliver the tailored
solutions that rural businesses need.
In particular, we doubt whether Defra's new Departmental
Strategic Objective (DSO), "Strong Rural Communities",
will enable it to identify and address all the basic issues that
communities themselves believe are inhibiting economic growth.
The DSO is split into two intermediate outcomes: the first focuses
on ensuring that the needs of rural people are met through mainstream
policy and the second on supporting economic growth in rural areas
with the lowest levels of performance. Each intermediate outcome
is broken down into a number of indicators that are intended to
enable Defra to assess its success in achieving "Strong Rural
Communities". Our concerns relate both to the intermediate
outcomes and the indicators.
Defra should focus on achieving economic growth across
rural areas as a whole, rather than concentrating solely on areas
with the lowest level of performance. We are surprised that transport,
communications, planning and further educationall issues
that were raised repeatedly during our inquiryare not included
in the mainstreaming indicators for the DSO. We are also concerned
that the level of data that Defra is using means that it is rarely
possible to distinguish between different types and sizes of rural
community. Defra should consult the Commission for Rural Communities
on whether the indicators represent the best possible way of identifying
the problems being experienced in rural areas. The delivery of
the DSO will depend heavily on other Departments, Regional Development
Agencies and local authorities. We suggest that Defra produce
a delivery plan setting out what assistance its needs from these
bodies, how it will communicate those needs to them and what feedback
it will seek.
Defra's policies must recognise the diversity of
both the problems and the possibilities in rural communities.
Realising the potential of the rural economy means translating
the "big picture approach" into policy solutions that
have the flexibility to deal with small-scale challenges.