How should we share prosperity in rural areas?

Former CCRI director, Professor Nigel Curry discusses the long-standing issue of prosperity in rural areas and how this could be shared in the future.

Since at least the inception of the European Integrated Mediterranean programmes in the early 1970s there has been a clear understanding of (and much research about) the value that endogenous and neo-endogenous development can bring to rural areas. Combining social, cultural, environmental and economic well-being can be more meaningful for many rural areas than simply focussing on economic growth and efficiency: invariably more readily achieved in cities.

These principles can be found in many contemporary social economy strategies, concerned with social, societal and environmental development, and carbon reduction, in pursuit of “the public interest rather than financial return and employing people inclusively, fairly and with dignity” (to use the EU social economy definition).

Locally, policies in the Local Enterprise Partnerships have embraced these precepts. Most rural LEPs have ‘inclusive economy’ policies in their Industrial Strategies: many also have post-carbon and sustainable development aspirations. York and North Yorkshire LEP aims to become the first ‘circular economy’, Cornwall has social enterprise zones, and Cumbria feels that the social economy offers advantages over growth economies because (Industrial Strategy, 2019, page 12): 

Traditional metrics of economic performance, such as GDP or at a regional level GVA, are a poor guide to social and economic welfare. They also do not tell us anything about how the opportunities and benefits of growth are distributed across different spatial areas and social or income groups”.

But there are tensions here in Government rural economic policy. Rural economic performance continues to be measured by Defra through ‘balanced Gross Value Added (GVA)’ productivity, despite calls, at times, from the Treasury and others to use broader well-being measures. The 2021 LEP review, conducted by the Cities and Local Growth Unit (with its ‘urban’ and ‘growth’ focus), is mooted to reemphasise the importance of growth, to remove LEP underpinning capital programmes and to side-line their industrial strategies: the Marches LEP had pencilled in its dissolution for September 2021.

And the House of Lords 2019 review of the rural economy, in extolling the value of a social economy approach to rural development, called for a place-based Rural Strategy as an implementation mechanism. This was roundly rejected by Government. 

Caught up in this is how various post-EU funds should be allocated in rural areas. Should the £4 billion Levelling-up Fund and the £220 million Shared Prosperity Fund (UKSPF), for example, be allocated in rural areas against GVA productivity and growth criteria or some broader notion of well-being in the social economy? The UKSPF is particularly important in the rural context as it is largely to replace European ESIF funding.

Lord Gardiner, whilst Parliamentary Secretary of State for Rural Affairs in 2021, was clear about this. The UKSPF fund is growth funding, and none will be ring fenced for rural areas. The fund provides the opportunity to move away from European models such as LEADER: rural areas, he said, need to increase firm-level productivity in order to drive growth.

But this does not meet with the support of the Rural Farming Networks (RFNs) which were set up by Defra in 2012 to identify and feed back local issues and concerns straight to the heart of Government, in order to make policies more rural-friendly. The RFNs would like MHLG to avoid using GVA as a measure of success in allocating the UKSPF, as this unduly favours more productive (urban) areas. A different set of quality outcomes should be used instead.

The debate rumbles ….