Select Committee on Environment, Food and Rural Affairs Eleventh Report


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 education—all issues that were raised repeatedly during our inquiry—are 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.

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Prepared 29 October 2008