Rural Communities

Baroness McIntosh of Pickering Excerpts

Thursday 9th January 2014 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I beg to move,

That this House has considered rural communities.

I am delighted to have secured this debate, and I should like to thank the Backbench Business Committee for giving us this opportunity to debate rural communities. I am honoured to represent what must be one of the most beautiful rural parts of the kingdom, so I feel particularly well placed to speak in the debate today. I should like to take this opportunity to thank all members of the Select Committee, past and present, and its staff for their help in preparing the report. When we started the inquiry, we were joined on the Committee by the hon. Members for Dunfermline and West Fife (Thomas Docherty) and for Brent North (Barry Gardiner), who have now been called to do greater things on the Opposition Front Bench. More recently, the Committee lost my hon. Friend the Member for North Cornwall (Dan Rogerson), who is now the Under-Secretary of State for Environment, Food and Rural Affairs. I am delighted to see him in his place today. We also lost my hon. Friend the Member for Camborne and Redruth (George Eustice) when he became the Under-Secretary of State for Environment, Food and Rural Affairs.

It is true that many in rural communities live in relative comfort and prosperity, particularly in my area, but there are also enormous challenges. There are pockets of rural poverty and isolation, as well as poor public services. Public services cost more to deliver in sparsely populated rural areas, where there is also a high concentration of the elderly population. All those factors represent a challenge to the delivery of public services. The extra cost of providing these services to rural communities is evident across the public sector, yet in 2012-13 rural local authorities received less than half of the per head funding that urban authorities received. If we look at areas such as education, we find that the Government are reducing local authorities’ flexibility to allocate extra funding to small rural schools with higher running costs. We urge the Government to recognise that the current system of calculating local government finance is deeply unfair to rural areas in comparison with their urban counterparts. I congratulate my hon. Friend the Member for North Cornwall, who is now a Minister in the Department and was one of the co-chairs of the Rural Fair Share campaign, whose work I would wish to recognise. The Committee concluded:

“The Government needs to recognise that the current system of calculating the local government finance settlement is unfair to rural areas”

in comparison with urban areas.

I wish to take the opportunity to highlight some areas where that is the case and go on to discuss them in more detail. The cost of heating homes and filling car fuel tanks in rural areas is very high, yet rural public transport is infrequent and, as we know, the bus subsidy is under threat. Off-grid households are currently prevented from accessing the same incentives and finance to improve their properties as are available to on-grid households. I am delighted to see that the Treasury is extending the ability of rural areas such as Thirsk, Malton and Filey to apply for rural fuel duty discount, and obviously we will look to make sure that the EU funding under the state aid rules criteria will apply equally across the board to such rural and sparsely populated areas as mine.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Lady on securing this debate and the Backbench Business Committee on allowing it. She is making an important point, because her community, like mine, has to make an application, which is not straightforward to do, and the criteria are not clear. I welcome the steps the Government have taken in other areas, but surely they should examine this issue, do this detailed work themselves and set the criteria so that rural communities across the United Kingdom can benefit from the rebate on fuel.

[Miss McIntosh]

Indeed. Obviously, the purpose of today’s debate, as the hon. Gentleman is highlighting, is the “Rural Communities” report and the Government response to it. We published our report in July and they responded in October. It is a source of disappointment that the Government are leaving it to rural communities to make their own arrangements; some will be better placed than others to do so.

Let me go back to the report’s highlights. We believe that school funds should revert back to varied lump sum payments going to rural schools according to their need. We also looked at the rolling-out of superfast broadband to rural areas, finding that it should be prioritised to those with the slowest speed. We urge the Department to impress upon BT that it must refocus its priorities. It is pointless giving those who have a fast speed an even faster speed; we believe that we should improve access for communities that have no, or extremely slow, broadband. We also urge BT to indicate which areas will be covered by 2015 under the rural broadband programme, thus allowing the areas that will not be covered to make alternative arrangements.

The Department is proceeding to “digital by default” when the next round of the common agricultural policy comes into effect, but we urge the Department to ensure that all rural areas will have fast broadband. We must ensure that the Department is able to provide the outlying farms that are too far from the cabinet and do not have fast broadband with paper copies of things in the interim. Incredibly, when I try to use my mobile phone at home in a rural area, I find that I do not have mobile phone coverage; voice not spots should also urgently be addressed.

[Mr David Heath (Somerton and Frome) (LD)]

My hon. Friend makes a crucial point about the so-called last 10% in rural areas, such as Devon and Somerset, where roll-out has taken place. Unless we achieve 100% accessibility for high-speed broadband, we will do an immense disservice to people in very rural areas. Does she agree that when those areas or properties are identified, the Government should make funds available to ensure such accessibility? We want not a bidding system or matched funding, which is not available in rural areas, but the Government to finish the job.

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[Miss McIntosh]

I welcome my hon. Friend’s intervention, and I will come back and say more on that point.

The Department for Environment, Food and Rural Affairs must address the matter of higher than average house prices and the lack of affordable housing in rural areas. Allowing the rural economy to grow, overcoming barriers to growth and improving rural businesses’ access to finance should be among its top priorities. We ask local enterprise partnerships to address the needs of rural businesses, and we urge the Government to ensure that financial support is offered to the business sector. The business bank, the single local growth fund and other such funds are available to rural businesses. We recognise the needs of rural communities. Currently, deprivation, affordability and provision of public services need to be addressed.

Let me explain why we called for this report. In 2010, the Government abolished the rural watchdog, the Commission for Rural Communities, and replaced it with a beefed-up rural communities policy unit in DEFRA that operates as a centre of rural expertise, supporting and co-ordinating activity within and beyond the Department. It champions rural issues across the Government. We were told that the unit would play an important role in helping all Government Departments ensure that their policies are effectively rural-proofed before decisions are made.

Earlier this year, we commenced an inquiry into rural communities to assess how successful DEFRA and the new unit have been at championing rural issues across Government to achieve their target of fair, practical and affordable outcomes for rural residents, businesses and communities. Our findings led us to conclude that the rural communities policy unit faces a difficult task if it is to meet that ambition. Too often, Government policy has failed to take account of the challenges that exist in providing services to a rural population that is often sparsely distributed and lacks access to basic infrastructure.

I have mentioned the local government settlement and how rural communities pay higher council tax bills per dwelling yet receive less Government grant and have access to fewer public services than their urban counterparts. I will not go over all our conclusions in that regard, but the Government have, in part, recognised their misjudgment by announcing an extra £8.5 million efficiency support payment for one year only for the most rural councils. Some payments are as small as £650. As welcome as any extra funding is, that is clearly not the long-term solution to the problem of rural councils not getting their fair share. Regrettably, the Government rejected our call for the gap in funding between rural and urban councils to be reduced. We must and we will continue to press the case.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I congratulate my hon. Friend on this debate. In Cornwall, the reality is that we have higher than average council tax, lower than average earnings and less money spent per head in the rural areas than in the urban areas. Closing that gap by just 10% a year for the next five years would mean an additional £16 million of income for people in Cornwall. Does she not agree that the Government should push ahead with this idea of getting a fair share for rural areas?

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[Miss McIntosh]

Indeed, and I, as an individual, am part of the rural fair share campaign. The reason for calling this debate is to lend support to that campaign, which goes to the heart of delivering public services in rural areas. I am grateful to my hon. Friend for allowing me to make that point.

Let me turn now to housing, another key part of the report. Parts of rural England are among the most unaffordable places to live in the country. Ryedale, in my area, stands out as the people working there earn less on average than those working in urban areas or in other parts of Thirsk, Malton and Filey. Rural homes are more expensive than urban ones. The average house price in the countryside is equivalent to 6.3 times gross annual average earnings, compared with 4.9 in urban areas. Potential first-time buyers are particularly hard hit by high property prices and are increasingly frozen out of rural areas. If we do not address those problems, the consequences for rural communities will be grave. If young people are priced out of rural areas, we lose the pool of labour for the local economy and the service sector, and demand for services, schools, shops and pubs will also decrease, making their existence less viable. Rather than addressing the problems on the demand side, we urge the Government to do much more to increase the supply of housing in rural areas.

We recommended that small rural communities should be exempt from the bedroom tax. In my area, there is a chronic shortage of one and two-bedroom homes. Until such time as we can rehouse those who wish to downsize, allowing larger families to move into larger properties, housing will remain a problem. Sadly, the Government rejected that recommendation. In their response, they suggested that those affected by the bedroom tax should simply work more hours to make up the shortfall or should move into the private sector. When I visited the food bank in my area, run by the local church, volunteers and the Trussell Trust, I found the story of one lady who volunteers there very affecting: she wants to work more hours for her employer, but the work is simply not there.

Regrettably, there are also planning issues—the elephant in the room that no one wants to mention. Whenever a planning authority in a nice area makes a proposal for social housing or smaller units, people always write to their MP—I do not think I am an exception in this regard—to say, “I know just the place for that development: at the other end of the village from where I live.” Until we can get over that barrier, we will have a smaller stock of social homes. The bedroom tax means that tenants are expected to move greater distances, away from friends, family and schools. We must have a policy that allows key workers to live in the areas where they perform a vital role. When the Minister sums up, will he explain what input his Department had into that policy from a different Department, and why he believes that it is suitable for rural communities that lack the variety and volume of social housing stock on which the policy depends?

Let me turn in more detail to rural broadband. It is crucial to rural businesses, allowing economic growth in rural areas and allowing rural businesses to compete with their urban counterparts. I have mentioned digital by default, and we must ensure that any new computer system the Government bring into effect is fit for purpose before it is introduced and that it reaches every farm on which the Department is relying to fill in a digital form. Rural communities and their businesses, schools and households have fallen behind their urban counterparts on broadband access. The roll-out of superfast broadband to 90% of rural areas will, I am sorry to say, be delivered late and it is unclear when the target to which we all aspire of universal access to basic broadband will be achieved.

It seems that some communities, including some in Thirsk, Malton and Filey—the Minister is living very dangerously there—might have to wait up to three years before they see any benefit. That is unacceptable, particularly as the Government are making ever more services digital by default, as I have mentioned. A recent and notable example is the new CAP deal, which will come into force in January 2015.

[Mark Tami (Alyn and Deeside) (Lab)]

Does the hon. Lady agree that even in areas where it is claimed that there is decent broadband coverage, the reality on the ground is that there are so many not spots that many individual houses and farms still cannot get access?

[Miss McIntosh]

I am grateful to the hon. Gentleman, whose experience reinforces the point I am trying to make. We must ensure that universal access is prioritised over increasing speeds for those who already have an adequate service. Will the Minister therefore tell us the date by which all rural homes will have access to 2 megabit basic broadband?

The roll-out of broadband is being funded largely from the public purse, yet many constituents cannot find out whether they will benefit from improved broadband. The Committee insists that communities are told whether they will be covered by rural broadband so that they can seek alternative means if they are not. Some local authorities are now publishing projected coverage maps, but many are not.

The Government have committed to spending £300 million that they are receiving from the BBC on rural broadband. Some rural communities might be hoping that even if they are not included in the initial roll-out, they might benefit from additional funding. We need clarity, which is sadly lacking. Will the Minister therefore tell us how rural communities can find out whether they will benefit from extra funding?

With regard to rural communities going it alone, one source of funding might have been the rural community broadband fund, but last week disturbing reports suggested that it will be wound down in March and that much of the available funding will be returned to Brussels. It aimed to deliver £20 million in funding and to connect 70,000 homes, but so far—I hope that the Minister can correct me—only three projects have been approved, claiming less than £1 million in total, and they will connect just 2,500 homes. A member of the public behind a proposed broadband scheme in Dorset said last week that although funding existed, officials had made it impossible to spend and that therefore the rural community broadband fund was dead. Another member of the public said:

“The officials running it got so tied up in their own process it was impossible to deliver. This has happened because of the incompetence and ineptitude in central government.”

The need exists and the funding exists, so how has DEFRA managed to make such a mess of administering the rural community broadband fund that much-needed financial support might be returned to the European Union unspent? I hope that my hon. Friend the Minister will tell me that that is not the case, because that would be serious and regrettable.

I will briefly mention schools. There are concerns about school transport, the extent to which the pupil premium reaches rural areas and falling school rolls, which is partly the result of the lack of affordable housing, which I mentioned earlier. The problem with rural funding is not limited to the finance settlement. The Government are reducing local authorities’ flexibility to allocate extra funding to schools with higher running costs, a move that will affect smaller rural schools in particular. The Government are demanding that all primary schools receive the same level of lump sum funding, regardless of size, location or other circumstances. That also applies to middle and secondary schools. The recent Ofsted report on the achievement of the poorest children in education states:

“The areas where the most disadvantaged children are being let down by the education system in 2013 are no longer deprived inner city areas, instead the focus has shifted to deprived coastal towns and rural, less populous regions of the country”.

I hope that the Minister will use his good offices to liaise with his opposite number in the Department for Education to correct that situation. Will he today explain the benefits that will be gained by removing local authorities’ ability to target funding where it is most needed, and whether his Department was consulted on that?

I commend all the conclusions that I have not been able to cover, particularly those that look more closely at housing, the rural economy, community rights and transport; I briefly mentioned the bus subsidy. I commend the entire report and our recommendations to the House and to the Minister. Again, I thank the Backbench Business Committee for the opportunity for this debate.

I look forward to my hon. Friend the Minister summing up what steps his Department is taking to ensure that pockets of rural deprivation that might otherwise be overlooked in the official statistics are recognised across Government. I urge him to state what is being done to redress the balance between rural and urban spending and to ensure that we eliminate these pockets of rural deprivation. We look forward to receiving the review that the Government have ordered to be conducted by the noble Lord Cameron of Dillington. We are told in the Government’s response that the findings will be included in DEFRA’s annual report and accounts.

I leave the Minister with this question: is not the whole subject of rural communities worthy of an annual statement or update in its own right, giving the Department the opportunity to report to this place on exactly how rural policy is being co-ordinated through the rural communities policy unit?

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[Miss McIntosh]

I thank everybody who has participated for their positive and constructive contributions to this excellent debate, which has demonstrated that this matter is not just to do with DEFRA but relates to all the tentacles of Government—it is multi-agency and multi-departmental.

I very much enjoyed the beauty contest as to who has the best constituency, but no one has yet come close to Thirsk and Malton. I fell into a trap at one point, so to save any grief in any quarters, let me say that of course I meant to refer to the spare room subsidy in the context of the importance of affordable housing.

I welcomed the contributions on the sheer cost of living and the fact that rural communities are under-represented and underfunded. The examples given show that we look to rural communities to give the sort of help we need, but we expect the Government to remove some of the barriers. I referred briefly to the fact that off-grid energy households have to be able to access the same incentives and finance to improve their properties and reduce their heating bills as those on-grid.

No one can doubt after today’s debate the importance of rural growth, and in particular broadband, to farming and other rural businesses. We would have liked the Government to keep to 9% modulation—I will just throw that into the mix—but 12% is still less than 15%.

We now have a better understanding of what it is like for those of us who live in and represent rural communities and a better idea of how best to meet the challenges. I hope we can persuade the Government and the Backbench Business Committee to hold an annual debate to give the Department the say each year as to how we are bringing rural communities to the heart of Government, and that policy formation, whichever Department is responsible for a particular policy, will reflect the needs of rural communities.

Question put and agreed to.

Resolved,

That this House has considered rural communities.