Skip to main content

Scale and cost per unit – barriers to Levelling Up rural economies

Scale and cost per unit – barriers to Levelling Up rural economies

2 November 2021

Generating the required numbers

The Briefing Paper A strategic case for equitable recognition of rural economies in Levelling Up policies (Nov 2021) produced by NICRE hits the nail right on the head, writes Andy Dean, chief executive, Community Action Northumberland. The strengths and weaknesses of rural economies are expertly described and supported by unequivocal evidence. Who could possibly argue with that??

For me, the fundamental rural issues focus around scale and cost per unit. Everything to do with rural economies tends to be smaller and very spread out. The cost per unit of delivering any sort of service is nearly always higher.

So many well-intentioned national, regional and other so-called ‘strategic’ programmes follow the numbers. Too often they measure value for money by equating the number of outputs delivered to each £1 invested. Not helpful when you can’t get the numbers to a sufficient scale to generate economies of scale.

Take the Community Renewal Fund for example. A minimum bid threshold of £500,000 is completely unhelpful. Of course, demonstrating the innate entrepreneurial spirit which exists in most rural areas, many of us have found ways around this by compiling a range of activities into single proposals but it would be so much easier if the issues of scale and cost per unit were properly recognised at the outset.

Let’s not forget that lots of small numbers added together make a big number! All of us rural bods recognise this, but we need economic programmes and policies to follow suit and not make it more difficult for rural economic opportunities to be realised.

Reoccurring issues

It sometimes feels like we are arguing the same points time and time again – because we are.

I recently found a survey of 16 rural communities in Northumberland carried out in 1968. The issues identified were so similar to what we see today it was a bit scary.

There are a few particularly significant challenges/opportunities for rural economies today which I would highlight:

  • There is a dearth of affordable housing and a change in community dynamic in many places. Some of our recent Housing Need Surveys have effectively demonstrated that the need which once existed has been forced to move away. Should we not be more concerned about the inability of many areas to provide homes for the key workers on which they depend?
  • Lots of older people are stuck in larger properties than they need because the market can’t provide the accommodation they are looking for locally – and they wouldn’t qualify for affordable homes due to the equity they possess. I am sure that collectively we can be much more creative in solving this conundrum and release existing properties for more families to utilise (avoiding more second homes, of course).
  • The energy challenge/opportunity! There is massive renewable energy generation capacity in rural areas but the micro installations which would fit seamlessly into lots of rural communities are often uneconomic. We need to find ways to agglomerate such opportunities in a way that is not needed as much in urban areas. Watch this space for some exciting proposals in Northumberland!

Find out more about NICRE