Environment, Food and Rural Affairs CommitteeWritten evidence submitted by the Commission for Rural Communities

The Commission for Rural Communities (CRC) is pleased to make a submission to EFRA. The CRC has a statutory remit to act as an adviser, advocate and watchdog to Government over issues of disadvantage in rural communities, and to make recommendations to Ministers. With the expected passage of the Rural Communities Order, the CRC is likely to close at the end of March 2013. Many of its functions have been adopted by Defra’s Rural Communities Policy Unit (RCPU), which was established in April 2011. Since then, RCPU has acted as CRC’s sponsor team, and there has been daily interaction between the two bodies. Discussions have taken place, for example, around the CRC business plan before approval from Ministers, and detailed discussions about individual pieces of CRC work and some aspects of RCPU’s work occur on a regular basis. The Head of RCPU usually attends CRC Board meetings and provides an update to Commissioners of RCPU and wider Defra activities.

This submission takes each of the lines of enquiry in the Inquiry’s call for evidence and provides a CRC response. Conscious of the need to keep the submission to a manageable length we have, additionally, submitted a summary of the content and recommendations of key CRC reports to Government, over our seven-year existence, in an appendix inserted from page 7. This begins with the seminal “Rural Disadvantage” report of 2006, which aimed to examine the full sweep of deprivation issues affecting rural communities. Because of its wide ranging nature it set a broad agenda for the work of the CRC throughout its existence and many of its recommendations still require attention today.

The Approach of the Rural Communities Policy Unit

1. How effective has the RCPU been in engaging with rural communities?

RCPU has established a network of Rural and Farming Networks and a contract with ACRE to gather intelligence from the Rural Community Council networks. These two mechanisms, as well as the engagement RCPU has with the Rural Coalition and its various members, have the potential to constitute a sensible and reasonably comprehensive engagement framework, but CRC is not in a position to comment on how effective they are turning out to be. Some of the RFNs cover quite wide geographical areas (much of the former South West region for example), and do not receive funding, which will limit the extent to which they can speak for the constituencies they represent. Furthermore, whilst CRC acknowledges the importance of RCPU consulting a wide variety of organisations, the views of such organisations are inevitably aligned and accountable to their own particular members/stakeholders. Therefore, there remains a limit to which such organisations can provide an independent, objective perspective to Government.

2. Has the RCPU done enough to ensure the voices of the hardest to reach can be heard?

The RCPU’s business plan does not have a specific focus on tackling social and economic disadvantage in rural areas, which raises questions about the extent to which Government continues to regard this as a priority. This is one of CRC’s core objectives and over time the CRC generated a substantial portfolio of evidence relating to rural disadvantage (see Appendix),beginning with the Rural Disadvantage report of 2006 which set something of an agenda for later workstreams. EFRA may wish to consider whether the outstanding issues from that paper are on the radar of the RCPU at a time when there is a public debate about the need to focus policy on the different life chances of “haves” and “have nots”.

3. How effective has the RCPU been in engaging with other government departments, for example, providing challenge and ensuring policy is “rural proofed”?

RCPU has clearly established strong working relationships with colleagues in a number of Government Departments, and has been able to provide CRC with links to policy specialists on matters such as housing, social care and benefits policy, although links to other policy areas (eg youth unemployment) appear to be less strong. There is some evidence, however, that their ability to influence Government Departments on policy issues may be limited. The CRC has raised questions, repeatedly, about the formula used to allocate funding to Local Authorities in rural areas, and has concerns about the implications for rural areas of the proposed business rate retention approach. This is going to have potentially profound implications for service delivery in rural areas and we question in this context the extent to which the RCPU has found it possible to engage with DCLG about formula used to allocate funding for adult social care. Furthermore, with regard to the creation of Local Enterprise Partnerships, it is the view of some organisations CRC has spoken to that the LEP model introduced by the Government was highly urban-centric. As a result, questions about how city driven economies relate to their rural hinterland, the importance of social and community business (which often operate in rural areas), the connections between different parts of the economy as well as the importance of social capital, are likely to be lower down the LEPs agendas. Whilst the emergence of five Rural Growth Network pilots and Defra’s periodic LEP round table meetings are positive recent developments, some have expressed the view that Defra did not take sufficient interest when LEPs were first being set up, so rural activity was not identified at that stage as a criterion for the approval of a LEP, leaving rural areas left behind.

There are some examples where the RCPU has made a tangible difference to Government activities, for example the work it is carrying out with DfT to seek to secure a sustainable future for Wheels to Work Schemes. There are also useful statements in the Open Public Services White Paper about the need to meet the specific needs of rural communities in delivering services. But in general, it is hard to think of examples of policies of other Government Departments being attuned to specific rural interests.

4. Should “rural proofing” be subject to external review? How might this work?

External review has the potential to offer a publicly visible external challenge to Government Departments, and thereby to enhance accountability. There is a 100 year-long history of NDPBs providing an independent rural voice to Government, and this will end with the abolition of the CRC. Published statistics at ward or super output-area level, containing perhaps 5000 or 1500 people, cover large geographical areas in the countryside, whereas in urban areas communities are more concentrated. The effect of that is for the deprivation experienced by small rural communities of perhaps 100 or 200 people not to be picked up in the figures. This has led to a situation where the CRC and its predecessors have been expected to highlight such issues and to challenge Government and other decision-making bodies to take them into account; otherwise, the outcomes (quality of service, access to services) for people in rural areas have tended to be less positive than for urban residents. If the policy function is deemed to exist within Government, the external challenge will be lost. Ministers, perhaps inadvertently, will be in a position where they can take decisions for the greater good of rural areas on the basis of published statistics, but which act to the detriment of the many small pockets of deprivation which exist. The CRC has argued that a small external body, perhaps led by a prominent Rural Adviser, should exist to:

scan the horizon for issues which might affect rural communities disproportionately, and how they are changing;

take external soundings from independent experts (academics, business people, those with a clear understanding of the public sector);

take an overview of the work programmes of all Government Departments, and asking for explanations of how they affect rural communities, and how they relate to each other; and

make publicly-known recommendations to Ministers.

Using the current funding model for the streamlined CRC as a benchmark, such a function could operate for around £350,000 a year—a 14% saving on the CRC’s current delivery budget. That would provide for a focused work programme concentrating on key priorities facing rural communities. Such an advisory body could access external expertise and advice as necessary and, importantly, being external to Government it could enable different perspectives to be brought into the open, including from differing parts of the country. That is harder to replicate within government.

5. The RCPU is the Government’s “centre for rural expertise”. Is it sufficiently resourced to carry out this function?

The RCPU has around 40 staff. They include statisticians and colleagues who commission external evidence from academics and others, and people who run the stakeholder engagement programme described above. In addition, there are colleagues who specialise in specific policy areas such as transport, housing and rural services. This staffing complement is about half the level previously operated by CRC, and will not have direct access to a body of experts such as the CRC’s Commissioners. Consequently, the RCPU is able to cover a more limited range of policy areas than CRC previously, and in less depth. Whilst the RCPU’s current areas of focus are clearly important issues for rural communities, there are a raft of other issues RCPU is not able to address in its day-to-day activities, as well as an absence of the ability to horizon scan, and devote resource to, emerging issues of concern to rural communities. The opportunity clearly exists for such expertise to be “bought in” when necessary, but we question whether that can always be done quickly enough, given the complexities and time required to operate Government procurement procedures. Questions will always be asked about the availability of funding for such contracts, especially at a time of reducing public expenditure, and we therefore contend that there is value in having a small group of experts available in the same way that the CRC is able to draw on the expertise of its Commissioners.

The CRC’s Commissioners have provided internationally-recognised expertise in many areas, such as housing and planning, public health, resource allocation, education and training, the rural economy, and in running rural businesses. They have also been able to use their extensive and influential range of contacts to facilitate policy development by Government, and to enable external challenge to be made. The loss of such expertise, readily available and currently costing less that £500,000 per year, leaves a gulf which will be hard to fill.

Whitehall civil servants tend to work with a range of priorities, some urgent and some important but less urgent. There will always be Parliamentary Questions, responses to ministerial letters, requests for briefing, and requirements to respond to new policy areas at short notice. We know that the proposed Rural Statement has been put back to September 2012 (it was originally intended to be out “before the summer” of 2011), as the rural element of the Government’s growth review has taken precedence. Whilst the growth review is an important priority, this situation is perhaps an indication that the need to take an objective overview of rural needs can be overshadowed by an urgent cross-Government priority. We worry that the importance of understanding and correcting the market failure of disadvantaged rural communities will continue to be recognised but de-prioritised in favour of the need to respond to urgent centrally-driven issues. Being located outside of Government, the CRC has not faced those competing priorities and has therefore been able to consider rural issues in the round, and to advise Government accordingly.

6. Is the RCPU transparent and open?

The Head of RCPU has usually attended CRC Board meetings and has answered questions freely and in good humour. However, CRC has not always been given access to draft policy documentation when it has asked for it (for example relating to the Rural Statement or the Rural Economies Growth Review), normally being told that the civil servants were not happy to circulate something that was at a relatively early stage, even to a trusted external body which it wholly funds. Even at a late stage, five days before the intended launch date in July 2012, RCPU was not prepared to let CRC have sight of, or know the launch date for, the Rural Statement.

It is clearly going to be even more difficult for RCPU to discuss the development of policy with other external bodies without there being concerns about leaks, which could lead to suggestions that decisions have been taken by Ministers without proper consultation.

7. How should the effectiveness of the RCPU be measured?

A starting point might be for EFRA to consider what the RCPU has delivered to date, 18 months since it was launched and more than two years since the abolition of the CRC was initiated. The CRC believes that having independent scrutiny of Government policy relating to rural communities is essential. Without that, the possibility exists for issues of deprivation, affecting many small pockets of rurality and which do not show up in deprivation statistics covering large geographical areas, to be overlooked. Our answer to point “4”, above, makes the case for a small external body to monitor such issues and to make recommendations to Government. An alternative approach could be for a standing parliamentary committee to be established, with an on-going scrutiny role.

8. Is there still a role for an independent Rural Advocate?

As suggested in our response to “4”, above, we believe that there continues to be a role for an independent Rural Adviser.

Rural Grants and Funding

9. How effective will the measures announced in the Rural Economy Growth Review be in stimulating sustainable growth in the rural economy?

The CRC has welcomed the Government’s commitment to the rural economy, as identified in the Rural Economies Growth Review, and the specific measures it comprises. There are two issues arising from that package that we would like to raise:

The Rural Growth Network (RGN) pilots launched in the growth review are promising, but funding is limited to five pilot areas. The CRC would be keen to know if further RGNs are planned, and whether funding for these will be made available. The key to their success, as well as the benefits that will be brought to the individual areas themselves, will be in how other rural areas can build on and utilise the work carried out in the five areas. It is crucial that Government puts proper measures in place to ensure this materialises.

There is a general emphasis on funding being allocated to organisations submitting good quality bids. This applies to the RGNs, and also to the broadband package announced with the growth review. We are concerned that this could lead to a situation where areas of high need do not receive funding allocations, whilst those with a better bid or those with a more established organisational infrastructure, but a lower degree of need, do not. Concerns have also been expressed by some unsuccessful applicants that a great deal of time and effort went into a process that was ultimately fruitless. At a time of scarce resources, organisations need to be making the most of their time.

10. What other measures might the Government have used?

To help all areas to achieve their full economic potential, adjustments may be needed to mainstream policies and programmes to meet rural needs, and the needs of industrial sectors which are most prominent in rural areas.

The introduction of Local Enterprise Partnerships (LEPs) and funding streams such as the Regional Growth Fund, are a case in point. It is important that some safeguards are in place to ensure that their focus, and funding, is of benefit to all parts of the country, including rural areas.

CRC is currently looking into this issue. We hope RCPU will take on board, and act on any outputs from this piece of work.

Rural businesses have to operate within a context of multiple tiers of local government and other public agencies, some of whom are distant from and unfamiliar with rural communities and businesses.

The funding provided through the Rural Economies Growth Review to support women-led enterprises is to be welcomed, and we think there is a good case for considering similar support to rural young people, who face specific barriers to employment, education and training.

In a climate where the Government is encouraging the formation of social enterprises to take on delivery of services in local communities, consideration should be given to supporting those who might be considering pursuing this in rural areas.

11. How will uncertainty over the content and timetable for reform of Pillar II of CAP impact on the rural economy?

There is still a tendency for policy-makers to regard agriculture as separate from other aspects of the rural economy, when in fact they are strongly linked—often operating within the same company, or from linked premises. Transferring priority from Pillar 1 to Pillar 2 will disadvantage the agricultural sector, whilst not necessarily improving the rural economy more generally, because those inter-linkages may not be addressed. The uncertainty over the content of the reform, and any delays in the introduction of the new programme, will only serve to defer potential improvements to the rural economy.

Many are puzzled by the apparent tension between the Government’s commitment to localism, and the introduction of much less local flexibility around the criteria used to allocate RDPE funding—a dilution of local input. In the light of concerns that this changing structure has caused significant delays to the distribution of RDPE, EFRA may wish to consider whether these changing procedures will lead to an under-utilisation of available funds within the current programme.

Government Policy

12. The Government is preparing a Rural Policy Statement. What should be in it?

13. Ministers’ stated rural priorities are housing, broadband, services, transport and fuel. Are these the correct priorities for the Government to focus on?

14. If not, what others should the Government prioritise?

Questions 12, 13 and 14 are taken collectively. The appendix to this submission gives details of some of the CRC’s key reports and findings, and the recommendations made, with some comments about the extent to which they have been implemented. The EFRA Committee are invited to consider that many of these recommendations remain relevant and that there is scope for the RCPU to continue to monitor and influence their implementation, subject to constraints of capacity.

The Rural Statement needs to be a clear, open and transparent summary of the Government’s priorities for rural areas, and should include emphasis on how those priorities will be delivered. It was initially intended to be launched “before the summer” of 2011; the subsequent delay suggests tensions across Government, perhaps in terms of the willingness of different Government Departments to be open about the extent to which their policies and programmes are “rural proofed”.

Broadly, the CRC endorses the Government’s rural priorities, but adds three further specific areas to consider:

The interests of young people in rural areas continue to need to be promoted. The numbers of young people not in employment, education or training have risen faster in rural areas than in urban areas since the recession began in 2008, and rural young people continue to re-locate to urban areas. The CRC calls on the Government to ensure that young people in rural areas have fair and helpful access to education, employment and training.

The allocation of resources by Government for the provision of services in rural areas appears to be lower than to urban areas, even though the cost of service delivery is higher because of reduced economies of scale and the distances involved. The CRC calls on the Government to review this issue and, progressively, reduce and remove this imbalance.

The Secondary Legislation Scrutiny Committee in the House of Lords recently called on the Government to indicate in the Rural Statement how it would ensure that independent scrutiny of rural policy would continue. The CRC endorses this recommendation.

15. Do the measures announced in DEFRA’s Uplands Review do enough to support sustainable hill farming?

CRC welcomes:

The introduction of an RDPE Uplands theme, whereby Axes 1 and 3 will support improvements to farmers’ competitiveness, skills, professionalism and ability to diversify.

Steps being taken by Defra to facilitate good practice in ensuring the succession of upland farms, including measures to make farming an attractive, rewarding and dynamic career prospect, through an agriskills strategy, supporting productivity growth via RDPE, and deregulation.

The planned comprehensive evaluation of the Upland Entry Level Scheme (due to take place towards the end of RDPE), taking place with a view to ensuring funding is available within RDPE to allow all SDA farmers to enter the ELS.

Steps being taken by Defra to ensure that Natural England works actively with hill farmers, land managers and other stakeholders in the uplands to explore how they can best work in partnership to deliver the multiple benefits these areas can provide.

However:

Defra stated when its Uplands Policy Statement was published at the beginning of 2011 that it would be followed by an implementation plan, and that it would be clear who would be responsible for that implementation. EFRA could question whether such an implementation plan exists, and the degree of progress.

Whilst Defra will ensure CAP reform post-2013 supports both the competitiveness of hill farms and makes adequate payment to secure the provision of public goods from the uplands, there was no mention of new funding mechanisms in the Defra Uplands Policy Statement.

Defra rejected CRC’s recommendation that it should broaden its concept of “income foregone” to include the full costs of the farmer staying in business, in line with some other EU countries. Although Defra is exploring the scope to include “additional costs” in the calculation of “income forgone”, disappointingly they see little scope for satisfying WTO rules on this.

There was no reference anywhere in Defra’s Policy Statement to the contribution of upland communities to public benefits.

Defra did not respond to CRC’s recommendation for a more integrated approach to all research and development in the uplands, which would encourage greater knowledge transfer across relevant research projects, pool scarce resource and address the R&D deficit in relation to ensuring the sustainability of the uplands. However, independent steps have been taken by groups outside of government to establish a centre of expertise/excellence for the uplands, which will include promoting further and higher education, apprenticeships, training, livestock improvement and land management programmes, business support and knowledge transfer for the upland sector. It should also be acknowledged that work is underway by Defra to establish the utility and effectiveness of demonstration farms, and any role for Government.

We would be pleased to have the opportunity to discuss this submission with the Committee.

September 2012