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RESEARCH SHOWS PLANNING BIGGEST BARRIER FOR RURAL BUSINESSES

New research published by the Country Land and Business Association (CLA) shows rural businesses across England and Wales are currently investing more than £13 billion a year, with the potential for further rises in the future. Those in the South East are among the largest investors – accounting for £2.2 billion of the total.

The South East has also seen a 68% increase in investment by rural landowning businesses since 2012. However, the CLA’s new Rural Business 2030 report reveals that planning issues are the biggest barrier to future investment for landowning rural businesses in the South East. 64% listed planning concerns as the key factor most likely to prevent future investments – this compares to 49% nationally.

This is a major challenge for the South East, where commercial and residential properties are more popular investments for rural landowners than in any other region. The research shows 16% in the South East said the highest proportion of their income came from commercial property – compared to 8% nationally.

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Farming remains the greatest generator of income for more than half of all landowning rural businesses across the country.

Despite concerns about planning, 56% of South East landowning rural businesses say they are considering making future investments in residential properties and 52% in commercial properties.

CLA South East Regional Director, Robin Edwards comments:

“We have been calling on Government to finish the job of reforming the planning system for some time. This survey has highlighted the extent to which rural businesses in the South East are investing in commercial and residential properties and if this is to continue, they need a better planning system, certainty on tax issues and better access to broadband in the countryside.”

The CLA, which represents landowners, farmers and rural businesses, says the report provides an important insight into the entrepreneurial energy of rural landowning businesses. It also paints an optimistic picture about the future with more than 80% planning to make investments for business resilience and growth.

However, the organisation warns that if Government fails to include the countryside in future political thinking, then the economic uncertainties fuelled by Brexit and volatile agricultural prices will severely harm the prospects of these vital investments being made across the rural economy.

Projections included in the report estimate that in a strong economy and with good levels of business confidence, rural business investment in England and Wales could grow to £16 billion by 2020. However, an unfavourable economic policy environment could see investment drop by more than 80%.

Robin Edwards adds:

“For too long, Government policy has allowed a focus on business support and infrastructure spending in our towns and cities to undermine the focus needed on promoting growth and investment in our countryside. Never has it been more important to address this imbalance than today as the rural economy prepares for the potentially seismic changes of Brexit. The Government’s new Industrial Strategy and the 25 year plan for food and farming are the opportunity to address this imbalance and they must be taken.”

In addition to planning challenges, the research reveals barriers to future investment for rural businesses also include concerns about loss of support for agricultural policy, changes in legislation, economic uncertainty, anticipated return on investment, regulations and up front costs.

Robin Edwards added:

“The report shows that many landowning rural business owners in the South East are custodians of long-established family enterprises – 87% of the businesses have been in the family for more than 20 years. There are great opportunities for these family businesses to boost the rural economy in the years ahead, particularly through new business ventures such as becoming suppliers of better high speed broadband and renewable electricity or heating systems. Rural businesses are up for the challenge, but they face an uphill struggle if Government doesn’t start doing more to champion this type of rural investment.

“Our report is full of ideas to support and encourage growth in the countryside, and we will be promoting these to Government in the weeks and months ahead.”

More than 400 rural business owners and politicians, including Defra Secretary of State Andrea Leadsom, attended the launch of the report at the CLA’s Rural Business Conference in London.

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