15 August 2024

Unlocking the economic potential of rural areas: recommendations for new policy approaches

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Greater rural reach

A set of recommendations to modify geographically-targeted initiatives such as Enterprise Zones and Investment Zones to better unlock the economic potential of rural businesses has been produced from research commissioned by the National Innovation Centre for Rural Enterprise (NICRE).

The recommendations demonstrate how Enterprise Zones and Investment Zones could be re-designed to secure greater rural reach in response to the research identifying how they were not perceived as specific economic tools for rural areas.

The study, based on the views of key players in this field, emphasises the need for the sector-based approach of Investment Zones to be considered alongside place-based thinking to enhance economic opportunities. Otherwise, Investment Zones – as currently designed and targeted – will have limited application or scope to deliver economic benefits in rural areas, according to the findings.

Liverpool

Support needed for infrastructure

Simon Pemberton, Professor of Human Geography at Keele University who led the research, said: “There is real potential for policy initiatives such as Enterprise Zones and Investment Zones to support and develop rural enterprise. However, at present, such approaches risk marginalising the needs of rural businesses.

“In line with proposals by the new Government to accelerate the provision of high-quality infrastructure to deliver economic growth, and the devolution of freedoms and flexibilities to local areas, it is necessary to provide further support for addressing obsolete or derelict rural infrastructure, or to develop new infrastructure for supporting rural businesses.

“However, we need a new approach which recognises the diversity of challenges which businesses may face in different rural locations, including issues of accessibility, weaknesses in local property markets and planning complexities associated with balancing environmental and development objectives.”

The research, jointly undertaken with Dr David Beel, Senior Lecturer in Human Geography at Manchester Metropolitan University, sought the views of managers and co-ordinators of Enterprise Zones with a rural footprint across England, as well as those from two different urban combined authorities currently developing Investment Zones.

Dr Beel said: “Whilst a move from Enterprise Zones to Investment Zones has, in effect, involved a shift from spatial development to sectoral development, there are commonalities evident for developing place-based and cross-boundary working to link rural residents with new employment opportunities and to scale up and catalyse investment across a range of rural sites. With the dawn of a new era in British politics, and as plans for a new industrial strategy are developed, this requires renewed discussions between national government and local actors.”

download the report

Recommendations for action

  1. Widen the selection of sectors in future Investment Zones through negotiations between national government and rural local authorities.
  2. Extend the period of business rate relief / retention (and other tax measures) in rural locations.
  3. Provide further support for infrastructure development to kick-start zones.
  4. Secure key 'anchor' businesses to attract others onto rural Enterprise / Investment Zone sites and to help generate place-based clustering.
  5. Give greater consideration to the challenges of planning de-regulation in certain rural contexts and provide associated time-related extensions of benefits.
  6. ‘Scale up’ the configuration of zones in rural locations for rural areas to benefit from future designations.
  7. Use appropriate rural-urban classifications to acknowledge the (rural) place-based context within which designations are operating.
  8. Create and sustain arrangements for pooling of income generated from retained business rates to cross-subsidise rural enterprise development.
  9. Establish flexible arrangements to support enterprise growth for rural SMEs and rural micro-enterprises.
  10. Introduce active travel hubs in order to enhance connectivity and access.

The research was one of seven projects commissioned by NICRE to examine how rural enterprises are adapting to the major challenges affecting the economy.

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