Pragmatix Advisory has been commissioned by the Local Government Association (LGA) to explore the economic challenges facing rural and coastal areas, with a particular focus on deprivation, and outline what steps government can take to strengthen the recovery and resilience of these communities within the current context.
Many residents of English rural and coastal communities benefit from a high quality of life, the characteristics of which cannot be obtained in the cities and suburbs. From the outside, the chocolate box thatched villages, quaint (former) fishing harbours and breath-taking scenery paint an idyllic picture. However, life in the countryside or on the coast has its own often-distinct challenges with its own problematic social and economic consequences.
Some of these outcomes are visible from official statistics, such as: more poor quality housing; higher suicide rates; more drug-related deaths on the coast; weaker rates of educational attainment; an ageing population; and a £102 billion productivity gap.
Others are not so evident in the Government’s data. The use of council averages, for example, masks what can be significant localised differences within council areas –which themselves can cover large and varied geographies. Meanwhile, the choice of metrics deployed in the much-used Index of Multiple Deprivation sometimes fails to reflect the nature of rural and coastal disadvantage.
Their often-small labour and product market catchment areas influence the costs, scale and nature of economic activity that can be competitively undertaken. Rural and coastal locations have a disproportionate share of small businesses –and only certain industries thrive. Employment patterns are impacted: lower rates of unemployment may mask a paucity of full-time, full-year secure jobs.
Often facing smaller market catchments than their urban counterparts, businesses in rural and coastal areas have less potential to operate with economies of scale. High relative fixed costs make the viability of operations tougher, and the returns on investment weaker. This impacts decisions in the public as well as private sectors.
The mix of industries found in rural and coastal communities is limited by the constraints of geography and scale. Although a wide range of businesses can be found in rural and coastal areas, three sectors are often overrepresented: farming, fishing and agri-food; manufacturing (especially food and drink); and tourism. Key rural and coastal sectors pay substantially below the national average. Jobs in the most rural areas are among the lowest paid, and they are in sectors with high rates of zero-hour contracts and casual working. With a quarter of rural workers not earning the living wage, affordability of local housing is an issue for rural workers in local jobs. The full impact of covid on rural and coastal economies is yet to be seen.
To date, job losses have hit urban workers harder than rural and coastal workers. The evidence on the uptake of government emergency business support measures suggests little difference between geographies –but there is no clear data yet on the mid-term solvency of businesses after emergency support measures are lifted. There is a higher proportion of ‘micro’ enterprises, with under ten employees, in rural areas –and small businesses in coastal. Often family-owned and owner-managed, many of these businesses are now vulnerable to failure. Experience of the last recession suggests rural economies can be disproportionately impacted by macroeconomic downturns, and both rural and coastal areas can be slow to recover.
Major changes in the way we live our lives provide an opportunity to reset the economic relationship between different parts of the country, and for rural and coastal communities to make a substantial and long-lasting contribution to the sustainable prosperity of UK plc.
The pandemic has stimulated new ways of thinking, and accelerated behaviour changes in consumers and businesses alike. Three trends that have been stimulated or boosted by covid have the potential to redefine the economic value of rural and coastal locations. The rise of ‘staycations’ has reminded older and introduced new audiences to what the domestic tourism and leisure sectors have to offer. And, lockdown has allowed many to revisit how and where to carry out ‘office’ work. ‘Green values’ reinforce the importance of England’s natural assets and a local food chain. If these trends are nurtured, and the appropriate investment is made in rural and coastal communities to leverage the associated economic opportunities, there is the potential for a substantial levelling up of rural areas’ prosperity and contribution.
On plausible yet indicative assumptions, these three trends could contribute £51 billion per annum to the rural economy by 2030. This represents a growth of over ten per cent on the gross value contributed by the rural economy today. In this context, rural and coastal policy should not be seen purely through the lens of redistribution to reduce inequalities and deprivation. Instead, much the same as urban policy of the past two decades, it should be viewed in terms of investment to deliver sustainable returns to the national economy.
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Our recommendations for Government
Business recovery in 2021
- Ensure businesses survive the pandemic.
- Direct communication and support for micro and nano enterprises.
- Financial assistance for new start-ups.
- Strategic promotion, visitor management and capacity support.
- Improved digital and physical connectivity key to unlocking a new economic paradigm.
- Redesigned and expanded public transport network.
- Superfast broadband and 4G coverage.
Homes and built environment
- Provision of sustainable, energy efficient homes for social and genuinely affordable rent.
- Revitalisation of town and village centres.
- Capital infrastructure investment to mitigate impacts of climate change.
- More accessible and affordable further and higher education for young people, adult learners and those needing to retrain.
- Support for businesses designed and delivered to meet the needs of small businesses.
- Shared business space and community networking hubs.
- National grid needs to grow capacity ahead of future demand, and support feed in from renewable energy schemes.
- Scaled up electric vehicle charging network, including provision for visitors as well as resident population.
- Recognition and response from Whitehall to specific challenges of varied communities –sparsity, remoteness and socio-demographics increase the cost of delivering local services.
- Publish statistics reflecting complexity of rural and coastal communities enabling support to be directed towards areas of deprivation.
- Interviews conducted with three individuals in different parts of England between 28-30 June 2021
- Case studies summarise the daily life, experiences and challenges of participants
- Names have been changed. Regions are accurate, but the specific town/village names have not been included.
- Anne-Marie, 65, Tendring
Anne-Marie has lived in her small coastal town for nearly 20 years. Having grown up in London she then lived in Colchester but was pulled to the seaside by the lovely feeling of the place. There’s a really strong community spirit in the town, and a good buzz. She often feels as if she is on holiday, living where she does. The town is home to an active sailing and rowing community. She lives near the harbour, a 15 minute walk from her parents.
She works in a hairdresser’s salon on the high street so has experienced first-hand the disruption caused by Covid to the local community. She was off work for months and only has only recently gone back to work. Some shops have closed over the course of the pandemic but most – along with pubs, cafes and restaurants – are reopening again now.
Her main concern is the high street. The local shops and businesses are very supportive of one another, and since things started reopening there has been a concerted effort to try and reinvigorate the town and get people out again – even though some people are very worried still about Covid. But they are being hampered by the fact that in recent years all the banks have left town (there used to be three banks and a building society) meaning that many people now travel to nearby Colchester or Clacton.
The issue with this is that it makes people less likely to come into the town at all – it takes people out of the town and prevents them shopping at the other places on the high street. She thinks something should have been done to stop all the banks leaving – couldn’t they have shared premises?
Loneliness has also been real problem since the pandemic started. Although there are a mix of ages in the town there are high number of older people, some of whom are still really worried about going out. Clubs and community groups – even informal things like bumping into one another at the GP’s Surgery – has stopped. That said, she feels the buzz is starting to come back to the town and she is still just as fond of the place as she was when she first moved here. The sailing club, in particular, is really active again.
Another issue is transport in and out of the town. On one hand, Anne-Marie is pleased that the buses never stopped during the pandemic, even if there were very few passengers. But more buses are needed, and the times they go at – particularly to and from Clacton – aren’t helpful at all, because by the time you’ve arrived it is almost time to catch the bus back. If they added a few more stops at different times it would be easier for people to visit for the day.
The town can also feel a little cut off – there’s only one road in and out, and if that gets blocked then it can be a real problem. She thinks this could become a real issue in the future. The town is getting more popular and people are starting to move here from bigger places, but without good transport links they might not have the infrastructure to support them.
She thinks the businesses in the high street have had plenty of support – and are helping one another – but she would welcome campaigns to encourage more people to visit as tourists. This could be a real help as visitors would go to the shops and spend money in the restaurants.
- Katie, 21, Shropshire
Katie lives with her parents in a small town in Shropshire, not far from the Welsh border. She recently completed her degree, but had to do the final year from home as a result of Covid disruptions. This was not easy as the course was heavily practical – and Zoom lectures with an unreliable rural internet connection didn’t make things easier.
After the pandemic she wants to go travelling before finding a job in sports therapy and in the meantime is working in the local McDonalds. With few big shops or businesses in her small town, there aren’t many options when it comes to jobs for younger people. When she looks for a sports therapy job she will probably have to leave for one of the nearby big towns or cities, unless she sets up her own business.
Katie has lived in her town her entire life, and she loves the strong community feel to it. In normal times, there’s a lot of local events, festivals and markets and the area has a lot of sports clubs and arts and crafts projects. But the pandemic has hit the area hard. Some businesses, including a bank and two pubs, haven’t reopened, and many of the local independent stores are struggling. They’re down to just one bank and one post office for the whole town now.
The local area has always had a big sports culture, with local hockey, cricket, football and rugby clubs. These are run by volunteers and have to be financially self-sufficient – so coping over the past year has been hard. For some it has been too tough, with the local swimming pool closing permanently during lockdown and the youth club in urgent need of improvement. The biggest issue in the town is the closure of one of the area’s two GPs surgeries. This has meant the other one has had to take on 4,000 extra patients and is creaking under the strain.
It feels like the local area is changing a lot too. There are a lot of ‘for sale’ signs on houses, which makes Katie worry that the area might lose some of the community spirit if there’s too much change. There’s a lot of housebuilding going on too. Katie welcomes this, but is a bit worried that the town won’t be able to cope with more people if the local services – like the GPs surgery – aren’t sorted out.
Katie would like to see more support for small local businesses and also more encouragement for tourism in the area. The town has great heritage, with a canal that used to run right through the centre, and is still popular with walkers and ramblers. But she doesn’t think people in government think about towns like hers – and she’s never heard of ‘levelling up’.
She’s encouraged by what the town is doing for itself, though. Towards the end of last year a big volunteer group was formed and, out of frustration with the local council, started fixing a few things in the local area, like cutting back hedgerows and digging paths through the woodland. They’ve got so much local support that in the recent elections they won some seats on the council. She hopes that this might lead eventually to more funding for some of the local sports and arts clubs that make the town what it is.
- Gary, 47, Cornwall
Gary grew up in Birmingham but has lived in the same small town in West Cornwall for 30 years. He and his partner both work three jobs to get by, and live with their 10 year old daughter in a small bungalow.
Gary loves where he lives. It’s always been a lovely place, both rural and coastal, with a great community feel to it. He worked as a lifeboat volunteer for years and saw first hand how the community can work together. But in recent times life has become a lot more challenging. Part of this is because the cost of living has gone up so much. There are more and more second home owners, both in his town and the wider county, which has both pushed up house prices and diluted the community feel of the place – as many of them are only around for a few weeks of the year. He also thinks a lot of the second home owners don’t have the right level of respect for the local area – there’s lots of parking on the road, where there shouldn’t be, and leaving the bins out when it’s not collection day. The rising cost of living has also meant there are a lot of job shortages – it’s too expensive for some people to live here.
Gary thinks that while Cornwall has a lovely image outside the county, when you scratch the surface you see a lot of deprivation. There are some big social problems in his area which he thinks would surprise people, like drug and alcohol dependency, long term unemployment and crime, including people trafficking. He gets frustrated when he hears about plans to ‘level up’ because he knows that all the money will just go to bigger towns like Redruth and Camborne, not rural areas like his. He thinks a good example of this is the recent G7 meeting, which saw a lot of investment in the roads (which are generally awful) but only around St Ives and Carbis Bay.
The last year, with Covid, has only added to these challenges. When the first lockdown started, there was a huge impact, with a lot of people scared to go out and the roads and streets completely quiet. Even though Cornwall had very few cases, the county was hit hard because tourism stopped completely. The worst impact came during the second wave. In much of the autumn, Cornwall was in Tier 1, and Gary thinks most people were being very sensible and keeping their distance. But being allowed to mingle at Christmas helped cases to spike, and by mid-January the hospital was full.
Since the lockdown lifted, the area has been completed swamped with visitors and the second home owners – this spring has been the complete opposite of 2020. Gary thinks people have been desperate to get away, particularly from the cities. Gary welcomes tourism to some extent but the pandemic has exacerbated the seasonality and intensity of it.
In the future, Gary would like to see new rules for second home owners, especially around council tax and their contributions to the local economy. He also wants Cornwall to spread its tourism around a bit more – be an all-year destination rather than just a place to go in the summer.