Rural regions 'need stronger economies'

Friday, June 06, 2008

Rural areas could double their economic output by an extra £347bn a year but some villages are at risk of becoming commuter ghettos if something isn’t done, according to Stuart Burgess, the government's rural advocate and chairman of the Commission for Rural Communities.

Burgess said "In my visits to rural areas I am constantly reminded how enterprising rural people are and what diversity of successful firms and resilient communities we have. However, we also know there is scope for significant improvement, and for some communities this will only come from better support."

Burgess found that while rural areas are home to around 30 per cent of England’s businesses (which generated £325bn in 2005), companies outside rural areas had much higher levels of turnover. If medium and large firms in rural areas improved their performance, attracted more investment and were more innovative, they could double what they made, he said, and this would help to cut unemployment and poverty in rural areas, close the gap between rural and urban wages and make rural communities more resilient against future economic and environmental shocks.

He recommended creating a new Rural Finance Forum "to examine and overcome the causes of lower capital investment", a new Rural Innovation Initiative to focus on sparse or remote rural areas, and a new agreement among government, insurance and rural industries to improve the response to shocks such as floods.

Burgess said: "At the heart of any drive for improvements will be better understanding of the scale and performance of rural economies from business and city leaders, economic departments and agencies. This is why I have also recommended that the government convenes a national summit and sponsors a series of regional summits to focus attention and activity of government and its agencies on releasing the potential of rural economies. I now look forward to government ─ nationally, regionally and locally ─ being inspired to seize this compelling opportunity and focus coordinated efforts on the needs of rural entrepreneurs, businesses, employees and residents, not just for the benefit of rural England but the entire nation."