THE COMMISSION FOR RURAL COMMUNITIES

  1.  The Commission for Rural Communities was established in April 2005 and became an independent body on 1 October 2006, following the enactment of the Natural Environment and Rural Communities (NERC) Act.

  2.  The Commission provides independent advice to Government and others and works to ensure that policies reflect the real needs of people living and working in rural England, with a particular focus on tackling disadvantage.

  3.  We have three key functions:

—  Advocate: the voice for rural people, businesses and communities.

—  Adviser: giving objective advice to Government and others.

—  Watchdog: monitoring and reporting on the delivery of policies.

  4.  The Commission is responsible for hearing and capturing the concerns and priorities of rural people and their representatives and communicating these concerns publicly and to Government.

Background to our evidence

  5.  Stuart Burgess, the Chairman of the Commission for Rural Communities and the Government's Rural Advocate, visited Gloucestershire, Worcestershire and Yorkshire in June and July this year. He heard first hand from rural communities and businesses directly affected and spoke with the organisations who are now working with them to help deal with the consequences of the flooding.

Impact of the flooding on rural communities

  6.  The Association of British Insurers has estimated the cost of the floods at £2.5 billion, and they are already handling over 50,000 claims from homes and businesses. A total of 857 schools were affected whilst many businesses and homes suffered significant damage.

  7.  Even now the full impact of the flooding is not known. Yet if there was one, overriding, message heard during our visits it was that the effect of the floods on rural communities—on individuals, businesses, farmers, market towns, and on the rural voluntary and community sector—will continue over many months, and that this extends far beyond the physical damage to homes and property.

Impact on the rural economy

  8.  The flooding caused an immediate and substantive shock to many in the rural economy. We heard of village shops and rural businesses being closed, tourists being turned away at what should have been the height of the season, village halls flooded, summer events cancelled, transport links and business operations who were severely disrupted and contractors who were laid off. In Yorkshire we heard that one contractor had lost £80,000 income in lost work within the first month of the flooding.

  9.  This has led to financial losses—some uninsurable and some uninsured—for a wide range of actors across all sectors of the rural economy and many connected operators in the national economy; from retailers to suppliers, hauliers to service providers. This has created pressing short term problems—such as cash flow difficulties in meeting staff costs and tax demands—coupled with a loss of income, disruption to supply chains and increased costs. These difficulties will undoubtedly be carried on into the medium and longer term as businesses try to deal with the shock caused to their balance sheets and business plans.

  10.  A specific concern of smaller businesses relates to the knock-on impact of insurance companies' replacement policies. Insurance companies tend to bypass local suppliers, using nationally agreed lists of suppliers, rather than allowing people to source locally produced goods, or goods from local shops. This will have a long-term effect on the profitability and viability of local businesses and the knock-on impact through the supply chain may well extend over the next five years, given the lifespan for replacing household goods.

  11.  One other concern is the less quantifiable impact caused by external perceptions of flood disruption and business availability. For example, there is widespread concern that the tourism industry will be hit hard, not just this year in affected areas, but also next year as people plan holidays elsewhere.

Effects on farming and farmers

  12.  The scale of financial loss in the farming community is huge, and cannot be compensated for either through traditional business insurance (growing crops cannot be insured) or offset by charitable donations.

  13.  The facts that the floods occurred in summer—an unusual event—led to large amounts of growing crops and winter feed crops being destroyed. Some crops were under water for over four weeks and waterlogged for longer. Many fields were too waterlogged for machinery to access and many farmers were forced to use ground usually reserved for winter grazing.

  14.  Many farmers are facing severe financial hardship and/or bankruptcy. Some will simply not be able to sustain either the level of losses and increased costs they have incurred or the increased costs they will have to incur in the months ahead. Smaller farms, and those who have had a significant proportion of their land flooded appear particularly vulnerable. Equally, we also heard examples of larger farms, who will experience an extremely difficult year with losses running into tens of thousands of pounds, but who are confident that they will be able to survive.

  15.  We heard fears about the serious knock on implications for farmers, whether flooded or not, who will face increased costs of production, for example increased drying costs, coupled with poorer quality and/or lower yields. Livestock farmers, in particular are likely to face inflated feed prices, on top of already higher prices due to recent cereal price increases.

  16.  There was concern expressed that with winter feed crops destroyed across large areas, winter could see potential animal welfare issues arising. Some farmers were considering selling their suckler herds, as they would not now have their own winter feed supplies, did not see it would be economical to buy in, and/or did not see where they would be able to source feed. Shortages in straw, hay and silage are predicted.

  17.  Our visit also heard a real sense of anger from the farming community who raised questions about the management of water courses and water control, both before and after the floods. Farmers reported being unable to pump water off their fields, due to unnecessarily high water levels in Environment Agency drains. They also reported poor maintenance of these drains had caused water to flood back out onto farming land (which farmers were then unable to pump off).

  18.  Along the River Derwent, water had been deliberately held back to help protect Selby and Hull. Whilst farmers recognised this was necessary, they disputed whether the length of time the water had been held back, and therefore the period the fields were kept underwater—some four weeks, was proportionate.

  19.  Questions were also raised about the relative importance afforded to environmental conservation in the management of water courses before the flooding and in policies during the flooding response. For example, whether limited or no dredging for environmental reasons had reduced the capacity of ditches and dykes for water management. Equally farmers were concerned at their perceived inflexibility of cross compliance measures, where restrictions prevented hay meadows being cut before the floods. We understand that the local drainage board in Yorkshire is considering an independent technical review that will help identify lessons for mitigating the impact of future flooding.

Displacement of communities/housing and accommodation issues

  20.  The physical rebuilding and repair of buildings and infrastructure will and does inevitably take time. People have been displaced from their communities, potentially for twenty-four or more months while rebuilding and repair work to make their homes viable is undertaken. For example, only now are families able to return to their repaired homes in the village of Sutton under Whitestonecliffe, Hambleton, in Yorkshire after localised flooding in June 2005. The scale of this flooding is likely to cause even longer delays.

  21.  The problems of displacement will be exacerbated in sparse, rural areas by the lack of available, alternative accommodation. Families are finding themselves located away from their villages, away from friends and support networks, often in urban areas such as Hull. It will be important to ensure that people are able to stay in touch with their community, schools and social networks throughout the post-flood period.

Impact on rural services

  22.  There are questions over the capacity of local authorities, particularly smaller rural authorities, to stand the capital costs of repair and rebuild of council property on the scale that will be required. Local authority estates tend not to be insured, with authorities preferring to offset one-off costs against annual insurance premiums.

  23.  We heard of increased strain on local medical services. GPs are already reporting increases in the number of visits from farmers, suffering respiratory problems associated with the standing water, and stress related illnesses. Amongst farmers and the wider community there has been an increased demand for counselling to help deal with the stress associated with the floods.

Supporting ongoing community networks

  24.  Various organisations including, but by no means limited to, the Farming Help Partnership, Rural Community Councils and the churches, are playing an important role offering practical advice and emotional support. Some groups are also offering financial assistance, based on generous public donations, and are seeking sources of match-funding to make this money go further. The ability of such groups to reach out to vulnerable people in remote rural areas is, and will be, an important lifeline.

  25.  At the same time the income of many local voluntary and community groups has been impacted by the floods, many of whom have had to stand losses from cancelled local events and shows, as well as missing an opportunity for vital fundraising.

SUMMARY REFLECTIONS

The need for a long-term response

  26.  Responses to emergencies tend to suffer from rapidly declining rates of public and political attention. Yet our visits highlighted that the crunch period for many rural actors affected will be over the medium term horizon of six to eighteen months. This is often at precisely the time when initial Government responses and public attention are diminishing. It is important that this is built into planning responses now and that the impact of the floods on communities is not forgotten, after the media spotlight has moved on.

The need to recognise the realities of the rural economy

  27.  The Government's response needs to reflect the breadth of the rural economy and the wide number of affected economic actors. This includes many small businesses that are less able to represent their concerns at the national level or through representative bodies for business.

  28.  Interventions targeting rural businesses should think innovatively about helping to overcome short and medium term disruptions that traditional insurance policies are not well designed to cope with, for example cash flow problems. In previous crises this has involved tailored policy interventions such as temporary VAT or tax holidays or interest free loans to a range of rural actors.

  29.  Emergency interventions also need to be careful to avoid several "blind spots" for affected groups in the rural and national economy.

  30.  These include urban-based businesses trading in a rural area (for example providers of marquees for agricultural shows were badly hit during the foot and mouth crisis) or national businesses with important hubs in the affected areas, which may have been hit by transport disruption or a general perception from customers that they are no longer "open for business". Diversified farm businesses also present an administrative challenge in helping address the impact on non-farming business costs (for example farm buildings used as office space or in tourism).

The need for awareness of social justice issues

  31.  Those hit hardest by the floods have often been the weakest actors, who both lack sufficient assets to absorb the costs of the shock and an effective voice to claim Government assistance—for example tenant farmers, small businesses, older people and those in more isolated areas. It is important that response plans actively considers these less visible needs.

The need to look forward in future planning

  32.  Flooding will inevitably occur in future, with the possibility, perhaps the likelihood, that its frequency may increase. It is therefore important that we look to encourage a public debate on water course management—to put it crudely, on decisions about which areas will be sacrificed to save which other areas. This would produce greater transparency and knowledge of these decisions, in order that the implications of such decisions can be better assessed, and mitigating actions put in place, to limit and compensate for the impact of future severe flooding incidents.

WHAT THE COMMISSION FOR RURAL COMMUNITIES WILL BE DOING

  33.  We are in discussion with the Environment Agency about commissioning some research work to quantify the impact of recent floods on farmers, on the wider rural economy and on rural communities as a whole.

  34.  The Chairman of the Commission for Rural Communities will be returning to flood affected areas in the Autumn to hear how communities are coping three months after the floods and whether their concerns are being addressed.

  35.  We will be reporting to the Prime Minister on the impact of recent shocks upon the rural economy and ways in which the rural economy can be strengthened.

Questions for the Committee to take into consideration

  36.  Are weaker actors voices heard and responded to in immediate and post emergency planning?

  37.  What balance of costs and benefits should be used during future flood management and how should the impact on rural businesses be factored into future planning?

  38.  What measures can the Government and other actors implement that help rural businesses over come the short-term impact of flooding?

  39.  To what extent did the flooding response prioritise some sectors over others?

  40.  What are the medium term needs of rural businesses and farmers and are these being adequately addressed in post flood planning?

  41.  How can community links and social networks, particularly from remote rural communities, be preserved during the displacement associated with housing repair and rebuilding?

  42.  Are local voluntary agencies that are responding to the crisis coping, and what additional support would they value?

Commission for Rural Communities

September 2007