Uncorrected Evidence 544

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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

(Environment, Food and Rural Affairs Sub-Committee)

on Wednesday 7 May 2008

Members present

Mr Michael Jack, in the Chair

Mr David Drew

Mr James Gray

Patrick Hall

David Lepper

Dan Rogerson

David Taylor

Paddy Tipping

Mr Roger Williams

________________

Memorandum submitted by Centre for Rural Economy, Commission for Rural Communities

Examination of Witnesses

Witness: Professor Neil Ward, Centre for Rural Economy, Newcastle University, gave evidence.

Q1 Chairman: Ladies and gentlemen, can I welcome you to the first evidence session of what I would call our reconfigured and refocused inquiry into the potential of England's rural economy. Can I put on record my apology for those who have been salivating at the thought this inquiry was going to take place anything up to 18 months ago. The reason for us having to postpone and refocus is the fact we had delays on our Rural Payments Agency report, we had some lengthy inquiries on Bovine TB, we had further work arising out of last summer's flooding and matters connected with the foot and mouth outbreak which has somewhat postponed this inquiry; nonetheless, we recognise its importance and hence our refocusing. I would like to express publicly my thanks to those organisations who have been kind enough to re-submit and update their original evidence, some of which goes back to 2006. In particular, if I can thank Professor Neil Ward for helping us in that respect. Professor Ward, a professor at the Centre for Rural Economy at Newcastle University, is an old friend of the Committee and we are delighted you have come back to us. Professor Ward, I gather this may be your last time appearing before us in the context of the Centre for Rural Economy at Newcastle University as you are going to be the Dean of Social Sciences at the University of East Anglia.

Professor Ward: That is correct.

Q2 Chairman: I hate to have to say this but we quite often have people from the University of East Anglia to help us so you might just find yourself back here again. Are you going to maintain your interest in rural work and rural studies?

Professor Ward: Yes, I will. I do not think I will have quite so much time to spend on research but I suspect I will keep an eye on rural affairs.

Chairman: Speaking on behalf of the Committee we wish you well but in the meantime, whilst you still have your hat on as the man who wrote our revised evidence, we are going to now ask you some questions.

Dan Rogerson: Despite the fact that you are about to depart for other things we are very grateful to you for giving evidence to us. I have been going around the parish councils in my constituency, and there are 70 of them, and this inquiry has come up and been mentioned so I know there are a lot of people out there who are very interested to hear what we are going to say and what you have to say.

Chairman: We are not going to get 70 pieces of evidence are we?

Q3 Dan Rogerson: Some of the places like Trevalga, which has about 50 people on the roll, probably will not manage to submit evidence. Nonetheless, all of us have different ideas as to what the rural economy is and how it works. As a representative of the Centre for Rural Economy presumably you have a pretty good idea of what it is so can you tell us what the rural economy is?

Professor Ward: What is the rural economy is an undergraduate essay title. I see the rural economy as actually a political term rather than an empirical economic term. It is not an unproblematic concept either because when people use the term rural economy it often implies a unified, single and rather bounded entity, something that is similar in all rural areas and separate from urban economies, and of course it is not that at all. I am the director of the Centre for Rural Economy and not the Centre for the Rural Economy. We actually see rural economy as an academic enterprise. When the Centre for Rural Economy was set up there was nothing like it anywhere else in the UK. There are a whole host of research centres that specialise in the agricultural industry and agricultural policy, and several centres that look at rural issues generally, community development issues, rural services, the land environment, but rural economy as an enterprise, as a subject of government policy, as an area for intervention, has not been very well represented in terms of academic research nor is it very well represented in the policy constellation as well. We have relatively single issue interest groups involved in rural issues coming from an agricultural industry perspective or an environmental protection perspective, whether it be birds, land or landscape, and there is not actually an interest group that represents rural businesses beyond agriculture. The CLA would be the nearest thing to it but there are not many. Rural economy in that sense is a project to raise the profile of the 95 per cent of economic activity in rural areas that is not necessarily land-based industries. Land-based industry is a part of the rural economy but there are a lot of institutions already looking after that area.

Q4 Dan Rogerson: Given that, you have said there has perhaps been a lack of voice to make the case for further consideration of what is going on in rural areas in terms of their economy. What do you think could be done to improve understanding across governments about what is going on in rural areas?

Professor Ward: Part of the problem, when one is interested in social and economic well being in rural areas as your starting point, is the often prevalent ideas and understanding of what rural life and rural economies are like. It is a matter of myth busting really. One of the common assumptions is there is a thing called the rural economy which is relatively similar in all rural areas and is homogenous. One of the first tasks is an understanding about diversity in rural areas. Rural England, as an entity, is an immensely diverse place in terms of social structures, in terms of land ownership, in terms of the landscape and in terms of economic activity as well and it is about challenging those assumptions about homogeneity and similarity. There is the assumption that rural economies equate to land-based industries when that is quite a small proportion, particularly of jobs. There is also a set of assumptions about rural areas being generally rather affluent places and can cut the statistics to produce that in some ways but the way we collect spacial data often aggregates up the individual lived experience and the experience of individual businesses as well and conceals quite a lot of disadvantage. There is a job to be done in raising the profile and improving the understanding of rural disadvantage whether that be at the household level or very local areas. There is another challenge which is about conveying the economic potential and dynamism of rural economies. There is a tendency in some of the regions of England for rural areas to be a bit of an afterthought when it comes to the economic development of regions. There is a challenge there in seeing rural economies as dynamic and active contributors to economic well being in larger administrative entities like counties and regions.

Q5 Mr Drew: One thing you have not said anything about, and I wonder if you will hear my thesis, is there is much more conflict in rural Britain than is often understood. There are so many different groups who have different perspectives as to why they are living in rural Britain and so it is much more difficult to get consensus and, in many cases, to get progress on fairly straight forward things because of the nature of that differentiated view of what the rural economy or rural society is like. Would you concur with that view or are you going to argue with me?

Professor Ward: I see the countryside as a highly contested place, yes. Part of that is about the deep-rootedness of some of these ideas about what rural areas are for, what the land is for, debates about food production, agri-environment schemes, food versus energy, whether we should be having more development and building more houses. The nature of social change in rural areas generates all sorts of conflict. The question of whether you can get a consensus is a function of how hard one tries. Quite often if you have a brief foray on an issue in a local area you just end up with contest and conflict but with sustained engagement over a period of time it is possible to build common ground and consensus. That is a long progress and a lot of public policy schemes come and go very rapidly so there is not that much opportunity for building common ground and consensus.

Q6 Mr Drew: Do you debate with your colleagues, who look at Europe and the world, the different attitudes? Scale is going to be widely different but you may be able to do some comparisons. Do you look at different outlooks on life with regard to the way in which the rural economy and society is developing compared to urban Britain? In the sense of city regions, which we will be looking at later, is that an attempt to meld the two together?

Professor Ward: We did some work on the geography of social change in rural England over quite a long period, and published in 2003 I think it was. It is quite clear that areas around different sorts of development trajectories and the nature of the social struggles around the future visions for those localities varied from place to place. We looked at Northumberland, Buckinghamshire, and Devon as three case study localities. It was clear that in Buckinghamshire where there had been very sustained in-migration over a long period because of the growth pressures of the South East, we had quite a new kind of rural ideal there where there had been a lot of social change, a lot of newcomers coming in who were very active people and contributing to the debates about how those rural areas should develop. There were lots of new opportunities for farmers to diversify, for example. Lots of the farmers were becoming rural industrial estate managers and converting their buildings. There were all sorts of economic dynamism around rural diversification in Buckinghamshire but a rather settled consensus on a preservationist idea and not too much house building. In Devon there was an intermediate area where you had different agricultural structure, more smaller family farms and incomers not having quite such an impact at that time. There was more vociferous debate about the future visions for Devon. In Northumberland, where you are geographically more remote from the main growth engines of the South of England and prevalence of larger landed estates, there was a different sort of settled rurality; we called it a paternalistic countryside. The land ownership was much more important in providing opportunities or constraints for the future development of land and property in the rural areas. There are quite interesting regional contrasts that can be made which underline this point that rural areas are very different from each other and we do get on quite slippery ground if we start to generalise too much about the rural economy or rural England as an entity.

Q7 Chairman: Can I follow that up and ask what I call a sacrilegious question? You made a good case that the nature of economic activity outwith the areas we can easily identify as urban has changed, in other words if you are stuck in an agricultural model that is very passe. There is a different way that business is done outwith of urban areas. Looking at some of the complexity, I was looking in the Commission for Rural Community State of the Countryside Report for 2006 and there are some incredibly complicated schematics and tables which try to define what we mean by rural. Is it a distinction that has passed its sell-by date in the sense that we identify problem areas in an urban context by talking about the inner cities, and the inner cities would fit very nicely with the description you have just given us as areas which are differentiated from other parts of the urban landscape by the types of social and economic problems that you find there, but that those characteristics and problems vary according to where they are. Therefore, if you say outwith of the obviously urban areas there is another piece of land upon which activity takes place, and a whole raft of problems are thrown up which you have just enunciated, let us look at the locations and not worry about this distinction, is the distinction still valid?

Professor Ward: That is another undergraduate essay title: let us do away with rural as a category. It is a very good question. I have a lot of sympathy with the line of argument that we live in a highly connected world and actually the economic development prospects of rural localities are inseparable from what is happening in regional economies and are often a function of regional settlement structures as well. However, I would want to make a case for keeping the category rural for a couple of reasons: first of all, the importance of land in rural areas to shaping opportunities, and also the population sparsity factor imposing some constraints on service delivery and on economic development is a crucial distinctive feature of the development prospects for rural areas. Population sparsity and the fact there is extensive land use there would be one reason that makes rural qualitatively different in terms of how it develops compared to people that live in urban areas. Secondly, it is useful in the context of a European Union where large proportions of public money go into agricultural policy. There is a reform agenda which is about re-badging agricultural policy as rural development policy so you have to see rural as an international category as well. The OECD puts in a lot of work and analysis on territorial cohesion, not just inequalities in growth prospects between regions but between urban and rural areas. As you have CAP reform, it is a useful way of reforming the CAP to convert it to a rural development policy. If you have done away with your national rural policy and with the category rural and said rural is no different from urban, we do not need to think rural and we do not need to have a rural administrative structure or a rural policy, then you miss out on an opportunity to help steer international or European policy reform from agriculture to rural.

Q8 Chairman: Can I ask you about one of the bullet points in paragraph 1.2 of your evidence where you say: "The failure of the government's rural policy since 2001 is the result of an overly agricultural approach to rural development, the eclipse of rural affairs in Defra and urban-centred approaches to regional development." If the trend in Europe is as you have described, how is it that there has been this eclipse of rural affairs in Defra, bearing in mind it was established as the department not just for the environment and food but specifically rural affairs?

Professor Ward: I have been reading some of the official documentation and submissions to other select committees and I understand now where I talked of marginalisation of rural affairs in Defra and eclipse of rural affairs in Defra the correct terminology is re-prioritisation, but it is essentially the same thing. I see it really as an accident of history more than anything else. This Committee in past inquiries has looked at the establishment of Defra. It was in 2001 with the foot and mouth crisis, a real ongoing issue, which delayed that general election for a while. There were plans in place for a department of rural affairs which was to bring together the rural policy functions of the Department of Environment, Transport and the Regions, as it then was, with MAFF, the Ministry of Agriculture, Fisheries and Food, which had come in for a lot of public criticism not only about its handling of foot and mouth but BSE before then. The plan was for a department of rural affairs with rural affairs being the central and integrating feature of that department. Defra was not what the plan was. Defra involved the bringing in of a much wider range of environmental protection functions from the old DETR into Defra so the central integrating agenda at the core of Defra, which is quite a large ministry with a wide variety of very important responsibilities, has been much more about climate change, environment protection and also reforming and greening agricultural policy. What was originally envisaged as a central pillar, a unifying integrating feature of a government department which was going to be rural affairs, has ended up, quite understandably when you are up against climate change and an animal disease crisis and that sort of quite big agendas, with rural affairs being diminished within the organisation of Defra and within Defra's priorities.

Q9 Mr Williams: People were questioning you about the definition of the rural economy and whether that is important in the sense that the problems facing the rural economy are the same as facing the total of British economy: lack of skills, lack of entrepreneurial activity and difficulty in accessing capital for people who wish to take risks. Is there a lot of difference in the problems between the rural economy and the economy in general?

Professor Ward: There are similarities and differences. If you take out agricultural employment, which is not hugely significant in rural areas, it is a few per cent, but when you look at the sectors that people in rural areas do work in compared to urban there is very little difference: services, retailing, banking, manufacturing and primary industries. Primary industries is distinctive but the proportions working in manufacturing are broadly similar in urban and rural. I made the point that you cannot understand what happens in rural areas separate from what happens in urban and regional economies but I would not want to argue that rural and urban economies are essentially the same thing because there are important distinctive features of economic activity in rural areas: there is a much higher preponderance of very small businesses, micro-businesses, employing ten or fewer people; there are high levels of self-employment; there are actually higher levels of entrepreneurial activity, particularly amongst women, in rural areas and there are much higher levels of home working. Something like 18 per cent of economically active people in rural areas work from home at some point in the working week. There are stronger relationships between the firm and the family often in rural areas, where smaller businesses are family businesses. You cannot understand the way those businesses work in a wholly economistic way without understanding the family priorities about succession to the next generation or changing family labour arrangements or retirement, asset transfer and that kind of thing. There are all sorts of things which make the operation of rural economies quite distinctive. Some new things we do not know that much about and we need to do more work on would be, for example, demographic aging which is more marked in rural areas and is happening earlier in rural areas than in urban areas and more sharply. We are an aging society which is a universal phenomenon across the UK but it is happening sooner and more markedly in rural areas. In the aging society rural areas are in the vanguard and that has quite interesting implications for business activity amongst people aged 55 upwards and it has interesting implications for thinking about the service economy, personal services, hair dressing, those sorts of activities in market towns. It is quite a distinctive demographic pattern emerging in rural areas compared to urban. There are these sorts of things plus the connections with the land-based industries which is distinctive to rural areas.

Q10 Mr Williams: You have already mentioned the fact that agriculture receives quite a large sum of public money but could you say something about the difference between the rural economy and the more urban economy in its dependence upon money coming in through benefits such as pensions and pensions in general? Is the rural economy more driven by those than in the urban area?

Professor Ward: With the demographic aging I am guessing that pensions are going to be more important. There are risks in focusing on just earned income for indicators of economic well being in rural areas. I can only give you anecdotal evidence rather than systematically across the board evidence. Probably the Commission for Rural Communities, who are following me today, will give you more chapter and verse on that. In the aftermath of the foot and mouth 2001 outbreak when we were looking at the economy of Cumbria, it was more than 50 per cent of household income was unearned income in rural Cumbria: pensions, savings and investments. We do have a problem in rural areas of low wage economies, dependance on tourism, seasonal work, agricultural and food processing industries in some areas and that is a distinctive problem particularly in some places. I remember noting more than half of household income was unearned income which is quite something.

Q11 Mr Williams: When you revised your submission and gave a list of key developments since October 2006, you did not elaborate on the significance of the Sub-national Review although Defra did say that the main objective of the Sub-national Review is to provide local authorities and regional developments with new powers to drive local prosperity, economic growth and regeneration and that included the rural areas as well as the urban areas. How important do you think the Sub-national Review is to rural areas?

Professor Ward: It is quite early to say for sure. There is a consultation out on the nuts and bolts of how the thing is implemented but much remains to be resolved about how things are going to work. There is local government re-organisation as well where we have new unitary authorities in some parts of England and there may well be future ways of re-organisation in other parts of England. It is quite difficult to disentangle the significance of local government re-organisation from the vision and proposals of the Sub-national Review. What is clear in the Sub-national Review is there is going to be a radically changed role for regional development agencies having these integrated regional strategies which bring together the regional spatial planning and land use planning with economic development, and that is going to be a big change.

Q12 Chairman: Can I be clear that what we are consulting on at the moment is what is a Sub-national Review and what should the outcomes be and what kind of powers and legislation you require to make those outcomes happen.

Professor Ward: The consultation document came out at the end of March and it is inviting comment on the detailed proposals for implementing the Sub-national Economic Review. For example, there are big questions about the accountability arrangements for RDAs. RDAs are going to have this quite significantly enhanced role. They are going to be effectively regional planning authorities and take on the functions that the old regional assemblies used to carry out. Personally, from a rural economic development perspective, I welcome bringing together regional economic strategies with the regional spatial strategies and bringing those more closely together. There are set questions about the accountability of RDAs. RDAs are essentially appointed quangos at the moment, and to have statutory regional spatial planning functions is quite a significant new string to their bow. There are going to be forums of the council leaders in the regions which are supposed to sign off the integrated strategy, which is going to be a very important document in the region. There are questions of what will happen if the local authority leaders are not prepared to sign off the strategy. Under the RDA current proposal, they will still be able to submit that strategy to the Secretary of State so there are all sorts of accountability questions there. Local authorities are going to be producing these new local economic assessments, which is good and an enhanced role for local authorities in economic development. I see the Sub-national Economic Review as rather usefully raising the profile of economic development in regions and sub-regions which is good. What I would be concerned about from a rural perspective is how the rural proofing is going to take place. How are we going to avoid the risk of regional economic development becoming essentially about the development of cities and essentially city centres where there has been an awful lot of investment and an awful lot of development over recent years? They have become these rather iconic places in the transformation of cities and regions and there is a risk that the rural gets cast as a something that will inevitably benefit from some sort of trickle out benefits from the city regions which I do not think is necessarily always the case.

Q13 Mr Williams: Following the foot and mouth outbreak and the incidence of blue tongue, the Prime Minister initiated two reports: one by Matthew Taylor MP about land use and its role in supporting rural businesses and also in the provision of affordable housing which comes out in July 2008, but also a report from the chairman of the Commission for Rural Communities, Dr Stuart Burgess, where he was asked to report on the way in which the rural economy could be strengthened. In your submission you said there are some wider issues around the machinery of government that are relevant to the rural economy and these reports were unlikely to cover those. Could you perhaps tell us what issues you were referring to?

Professor Ward: I welcome both those exercises and they do signal a renewed interest in rural development and rural economies at the moment partly as a function of the flooding and the foot and mouth problems last summer. I am looking forward to seeing both of those reports and I am sure there will be lots of useful material in them. Matthew Taylor came up to the North East for a visit and I have been involved in some discussions with CRC about the report they are doing for the Prime Minister. It is this question of the re-prioritisation of rural affairs, and rural economies within rural affairs, in Defra which I would be expecting these inquiries to be engaging with and which is the thrust of our evidence to your Committee. As to he question of whether we have the profile right, there has been a profound change in terms of the level of resources, civil service resources, and the departmental architecture handling rural economies and rural socio-economic development, particularly since the Huskins Review and the modernising rural delivery reforms of about 2004. There has been a quite profound shift. If you look at the number of civil servants in Defra in rural policy there are 16 or 17 now and there were many, many more before. The Countryside Agency had a budget of about �100 million or so, the Commission for Rural Communities started off with a budget of about �14 million, down to �10 million and now down to �7.5 million. There are all sorts of examples I could use to illustrate the re-prioritisation of rural affairs and it is quite marked. There are fewer people within the policy system who are looking after this area of public policy and it is partly as a function of there being other very important things to be doing like climate change and animal disease. I do not know if these reports are necessarily going to deal with that big picture, which is changing individual bits and pieces of policy whilst at the same time, in the context of a re-prioritisation, the eclipse of rural affairs.

Q14 Mr Drew: I was interested when you say about the number of people who rely on unearned income. One of the problems with the complexity of the rural economy is that a lot of people come in to live there as a lifestyle decision. They do not come there to work but come there because they want to live in rural Britain. We have seen this on the agricultural side with the growth of hobby farming. It is fascinating in this day and age where we have said the number of farmers is declining but when looking at the numbers farmers are actually increasing. To me they are not real farmers but they are defined as farmers and many of them are drawing single farm payments, which again is bizarre. In the debacle over the 10p tax a number of people contacted me who I would not say had wanted to reduce their income for the sake of it but have actually reduced their income to minimise the amount of tax they were paying. They were using unearned income to give themselves a quality of life but the most important thing was they had the lifestyle they wanted so they were prepared to sacrifice the money they earned for more leisure time in a place they wanted to live. Presumably they had down-sized from a bigger house in the South East and come to the South West. That is quite a difficult thing to then believe you can overcome if you want to engineer a dynamic economy where people are going out there and employing other people and they are really thinking we want rural Britain to create a lot of jobs. I think it is a myth there are not lots of jobs in rural Britain, there are plenty of jobs there. Maybe things are changing more definitively and more rapidly than we think and that is quite problematic in the sense that if people do start feeling the cold then an awful lot of people could find employment very difficult to obtain which could lead to some issues to do with can people really afford to live there and virtually sacrifice what would be, to me, a normal working pattern of life.

Professor Ward: I take the view that people moving into rural areas in England is generally quite a good thing for those rural areas. We have done research in the North of England on rural micro-businesses. We did quite a big survey ten years ago and there were 8,000 or 9,000 rural micro-businesses in the rural North East and we got approaching 2,000 of them to fill in their questionnaires. It was quite interesting that a very significant proportion of those micro-businesses were actually started by people who had moved more than 30 miles to the location where they were running their small business. Incomer business owners were more significantly growth orientated and employed more people. It was a fairly significant proportion of the total workforce in the rural North East. It was basically people employed by what were effectively incomer migrants.

Q15 Mr Drew: Would that be differentiated in the South West where you tend to find people who are older and have done a full-time job and are deliberately reducing that?

Professor Ward: My recollection from the statistics is retirement migration to rural areas only makes up about 10 per cent of the migration.

Q16 Mr Drew: These are not people who are retired.

Professor Ward: People migrating to rural areas in their 40s and 50s and maybe downsizing, quite often moving out from a large company and setting up a consultancy or a small business, is part of the dynamism of the rural economy. I am relaxed about that and I think that is a positive trend.

Q17 Dan Rogerson: I concur with what you are saying about the city regions and the potential for sidelining rural areas. Have you done any work to look at places where there is not a city? I am from Cornwall which has been recognised as a sub-region of the South West and that does not have a city in the way that a city region would understand it. Have you looked at what the possibilities might be for a purely rural sub-regional entity?

Professor Ward: I gave some evidence to what was the ODPM Select Committee about two years ago when they were looking at regional government. They had a specific item on looking at city regions so I am happy to send you that or direct you to it. City regions are this new fad over the last few years but they have cropped up before. In 1914 there was a book on city regions. They cropped up again in the Redcliffe-Maud Commission on local government re-organisation in the 1960s where there was quite a strong contested debate about whether city regions were the way to go for organising local government in England. There was a minority report produced by Derek Senior which engaged in that debate. The main concern was about rural governance so it is worth revisiting the Redcliffe-Maud Commission debates. At the moment there is not a single idea about what city regions are. If it is urban authorities trying to improve cross-boundary working in an area like Tyne and Wear where you have several regional urban authorities and they need to collaborate on transport, that is a good thing but it is where city regions were then trying to grab the most dynamic rural hinterland and saying this is part of our geographical entity as well, but north Northumberland is not so Berwick is left as a free-standing not quite city region. It is through statistical analysis of labour markets producing these ideas of city regions as something larger than the city but still rather bounded entities and the notion of being inside or outside of the city region which I thought was really problematic from a rural development perspective as well as being intellectually rather riddled with holes.

Chairman: It just shows that there is nothing new under the sun.

Q18 David Lepper: Can we come back to Defra's role in rural affairs which you already explored a bit? Tell me if I am simplifying too much what I took you to be saying earlier. Pre the 2001 general election there was a good idea: let us have a department of rural affairs covering everything to do with rural communities, economy and everything else. Then comes foot and mouth and questioning of the role of MAFF, et cetera, and so that new department finds itself accumulating a range of other policy areas for which it has responsibility. The result is we end up with a structure in which rural affairs has a smaller and smaller priority in terms of public service agreements, et cetera, and indeed in terms of staffing. Is that the picture you are giving us?

Professor Ward: Yes, it was an accident of history. The plan was for rural affairs to be the central integrating feature of that new department. There was a plan and I do not really understand quite what happened. Mrs Beckett went into Number 10, there was a conversation, and she came out Secretary of State for Environment Food and Rural Affairs as I understand from reading the press coverage.

Q19 David Lepper: You mentioned some figures and they are very similar to the figures we have had from the NFU about the number of civil servants dealing specifically with rural issues in Defra, which you put at 16 or 17 and the NUF are saying about 17. They compare with that over 50 in mid to late 2007 so there is quite a substantial and sudden drop rather than a gradual marginalisation. Are they right?

Professor Ward: That sounds about right. I have heard figures quoted as higher than 50 in 2001. It depends how you define it but there was quite a significant number of civil servants in the old DETR who came across and there were some elements of rural development connected to farm diversification and the rural development socio-economic schemes of the rural development regulation that were in MAFF so if you put those two together it is a marked pairing back. This is in the context of a marked pairing back across government of civil servants.

Q20 David Lepper: Is it feasible to see that accident of history or not some of those other policy areas that this department now gives greater priority to climate change, the natural environment, are just, among other things, another way of looking at rural affairs?

Professor Ward: It is always tricky when I find myself in this position coming from the perspective of rural socio-economic development, rural economy, and bemoaning the re-prioritization because I do not want to argue that climate change and fighting animal disease is not important things to be doing, but if the comparator is what would the old plan of the Department of Rural Affairs have been like, we do not know what the world would have been like. Environment could have been put with energy or transport. You could think of climate change as a hugely significant challenge for the UK but you could have environment with energy and transport, for example, but it is with land, food and farming and rural affairs. Rural economy, rural affairs, understandably does not fare well in that kind of struggle for what the priorities are. I do not see a lot of evidence that the natural environment, or even the food and farming side of Defra, melds ever so well with that wider more holistic approach to the socio-economic well being of people in rural communities in rural areas.

Q21 David Lepper: I am quoting from your original submission to us here but if we really wanted a department which would become an "effective champion of rural affairs, improve rural proofing in Whitehall and the regions, and more effectively promote the idea of rural economies as sources of economic dynamism" et cetera, we would not start from here any longer.

Professor Ward: That is where there has been a loss in that championing of rural issues across government. If rural affairs is being radically diminished and weakened within Defra then that also weakens its role in gaining leverage and influence in terms of the status of rural affairs across the policy spectrum and it is at the same time that you have a much smaller advocacy and watchdog quango than we he had prior to modernising rural delivery.

Q22 Chairman: Have you seen any formal evidence of Defra auditing the rural proofing of other government departments?

Professor Ward: No, but I have not looked for it so I would not want to say none exists. There is not quite the profile of all of that; it is not something that is prominent.

Q23 Chairman: Do you have any example of a department that has rural proofed any policy? Pick a department, any policy, can you name one? It is not a trick question. I would like to know what it looks like.

Professor Ward: I think rural proofing, at its core, is a good idea but you need sufficient staff and resources to be collecting the material, chasing around, gathering intelligence. Part of rural proofing as well is about making public and visible the issues.

Q24 Chairman: The one thing you do not have is the before and afternoon after effect: we had this idea but we changed it because we had to rural proof it. We ought to ask other departments what they have been doing.

Professor Ward: That would be a good thing to ask.

Q25 Chairman: Let us move to an examination of Defra's Strategic Objective. This Committee has been struck by the inability with the previous public service agreement, when it was focused on productivity, every time we used to ask about it Defra could never measure it and it was a nasty thorn in their side. They now seem to have dropped it to come up with something that I am struggling to understand. Let us start with this term "strong rural communities". How would I define one? How would I know I had arrived in one if I was looking for one and, the inverse, can you tell me what a weak rural community looks like?

Professor Ward: It is my term: strong rural communities. Let me start by saying I welcomed having a PSA target on rural productivity in principle. I thought that was going to be really useful in raising the profile of economic issues in rural areas within the government machine. It is unfortunate that very early in its life it became discredited both within Defra and more widely because of whether it had the right kind of indicators and whether the data was available at the right spacial scales. There was a lot of talk as well about what is the point of having a target as a department if you do not have the levers to deliver policy to achieve that target which I have said in my supplementary memorandum is actually an excuse. PSA4 had a rough time and it was scuppered very early on but to have a performance management framework for government is a good idea, to have public service agreement targets is a good idea, and to have something to do with rural economy was a good idea, but it was scuppered by the technical details. Also it never seemed to have any profile. There was a little bit of analysis that was produced but it was a thing that became discredited and disregarded relatively early on.

Q26 Chairman: PSAs had a certain currency. When the government came in and wanted to make certain there were objective measures by which the performance of departments could be judged, do you think the fact that we have gone now to a departmental strategic objective is a downgrading of the objectives of the department in the rural context from having a PSA?

Professor Ward: There are two things going on. On the one hand, at the technical level, more thinking has gone into what should be the indicators and how should we measure them and what is the best available data. In one sense, at a technical level, it might well be an improvement but I had to look at up what a departmental strategic objective was first of all. I do not know if you are familiar with the inquiry that the Treasury Select Committee conducted before Christmas, reporting in December, on the Comprehensive Spending Review in general. The Chief Secretary to the Treasury was questioned on departmental strategic objectives and public service agreements. It struck me as quite curious that there were about 100 or so PSA targets and then a commitment to reduce the number of targets. Now there are 30 PSA targets and there are departmental strategic objectives and if you add the PSAs and DSOs together you get roughly what we had before. Broadly about three quarters of the PSA targets have just been re-badged as departmental strategic objectives. When ministers have been questioned they explain that the PSAs are the real cost-cutting priorities. This is about re-prioritisation and so the DSOs are business as usual kind of issues that are the pre-occupation within individual departments. The distinction between a PSA and a DSO is the DSO is internal to a department whereas a PSA is a much more cost-cutting issue.

Q27 Chairman: If I interpreted your reaction at the beginning, the strong rural community we are not quite certain what that is. Life is made more difficult because in the time between when we started out on this work and now Defra have re-defined the definitions in terms of their intermediate outcomes. If I have understood it correctly, the indicators that they wish to use are now somewhat different from where they started out. I have to say I find it quite confusing to understand, first of all, what these measures actually are. Is the data available to enable you to look at the indicators which they have identified, and why did they change their minds from where they started out and where they are now? As an expert in the field, you were a little uncertain as to what this thing called a strong rural community actually looked like.

Professor Ward: There is a lot that was disappointing about the move from the Countryside Agency to the Commission for Rural Communities following modernising rural delivery. Elsewhere I have called it the vandalism of modernising rural delivery. One of the things that I thought was quite a good step forward was that the Commission for Rural Communities was given a very specific brief about tackling rural disadvantage which was quite a sharp focus within rural development. There is disadvantage in terms of access to services, in terms of lower wages and income levels, social exclusion in rural areas, but you can also see disadvantage in terms of dynamic and thriving rural areas having their potential prospects disadvantaged by not featuring as prominently in regional and national thinking as they might. Addressing rural disadvantage I thought was quite a neat way of thinking about socio-economic policy for rural areas, rural affairs policy if you like. I would have thought something on addressing rural disadvantage would have been an improvement on achieving strong rural communities which I see as a little bit Old Mother Hubbard and apple pie. The Ministry of Defence, as I understand it, has a departmental strategic objective which is building for the future so there are vaguer and woolier ones around than strong rural communities. That is what I understand from the Treasury Select Committee.

Q28 Chairman: Indicators on Defra's website on economic growth is supporting rural areas with the lowest levels of performance. They are not focusing on maximising the best but they want to focus on the areas with the lowest level of performance. Two key indicators are work place earnings per worker per hour split by local authority district and employment rate by local authority district. Have they got the capability of recording all of this?

Professor Ward: One of the lessons that I hope will have been learnt from the last PSA target, which was so discredited so early on, was the data was not really available to effectively monitor some of those sub-indicators. There was a whole long list because it was not rural productivity but access to services as well and that had a list of about 13 sub-indicators. It was very complex and some of it just could not be done. There was also an issue of quite noisy data that changed a lot from year to year so you could not monitor progress effectively on an annual basis. I would hope that lesson has been learnt and I am sure there will be data available for some of these otherwise I do not think they would have featured in the indicator.

Q29 Chairman: We then have another intermediate outcome which is the evidence needs of rural people and communities are going to be addressed through what is described as mainstream public policy and delivery. Then it goes on and tells us that the indicator is a basket of local government performance framework indicators on educational attainment, social capital, quality of life, health and social care, employment and economy, housing affordability, crime and anti-social behaviour. That is a huge data set.

Professor Ward: Yes, and there is a lot of this about. Some of these might come from the local authority development frameworks which are being produced because there is quite a long list of indicators.

Q30 Chairman: Who is actually going to do all the work to gather this together and what is the base line for this? It is going to be light years down the road before you can judge if you are making any progress.

Professor Ward: That is something you will have to ask Defra about.

Q31 Chairman: I do not mind that as an answer. The reason I am probing you, as somebody who studies this in great depth is I am getting the impression you think it might be a quite a good idea and I hope they have thought whether the data is there, and I suppose if it is there they might be able to measure it but I cannot give you any specifics about it because that is still not quite in the public domain.

Professor Ward: There are two things to say: firstly, this is in the context of a pairing back of resources for looking at all of this kind of stuff within government so I do worry about the capacity to hold other departments to account and progress the delivery of this objective. One of the criticisms of the last PSA was that Defra did not own the levers to deliver and that criticism could be applied to this as well because Defra does not have the levers to deliver interventions to achieve these outcomes. Exactly that same criticism can be applied to this departmental strategic objective as the old PSA.

Q32 Chairman: Some people have said the data should be at a more micro-level than the local authority area. I am struggling to understand how by local authority area some of this data is going to be collected. It requires a vast bureaucracy to gather it in at a time when the government keeps saying but we are trying to relief people of red tape, form filling and all the rest of it.

Professor Ward: There is a question as well about how progress against this departmental strategic objective will be monitored and whether it will be publicised and what will be the monitoring accountability arrangements because, at the moment, that is unclear to me compared to the old PSA.

Q33 Chairman: I am going to be very naughty and set you an essay question if I may. Given a clean sheet of paper, how would you define a useful indicator to determine whether the rural economy was improving or in need of help? In other words, what would be the Neil Ward indicator of rural success or failure and what would it look like?

Professor Ward: Just the rural economy or rural affairs more generally?

Chairman: You can, like a good student, go a little beyond the nature of the question and get extra points from the Committee. It would be helpful because we could spend a lot of time, and I take the point very much you are making that this is something we need to probe Defra about. The very fact that you are feeling your way into it says quite enough.

Q34 Dan Rogerson: You have really touched upon this already in what you were saying that some may argue the department does not have the means at its disposal to deliver the objectives it has set itself. You have said that could be used as an excuse. Has your view changed on that? Would you agree they do not have the means to do it or do you think perhaps they could if they put the resources to it and that it is an excuse?

Professor Ward: There are two ways to think about this. I look forward to the prospect of writing this essay on what would be an ideal indicator of the success of rural economies. You can see this as a bureaucratic technical data statistical kind of issue or you can see it as the re-prioritisation: what level of priority, what level of the political commitment, is going into rural development and rural affairs. What we are doing here is having a debate about the statistics and the availability of statistics and fine tuning a little indicator which is going to be one of very many for Defra. It is a DSO not a PSA. The PSAs are the big priorities for government, and there are 30 of those. We are fiddling around with this little indicator in the context of, over a six or seven year period, a significant pairing back of the resource going into actually dealing with these issues. It is tragic, in a way, because it comes at a time when we have had a real explosion of data and statistics about rural areas and rural economies. We have the new definition so we can analyse statistics on a geographical basis in a much more sophisticated way now. You have the State of the Countryside Report there and the stuff that the Commission for Rural Communities puts out is fantastic; mapping all sorts of statistics at a national level and all sorts of breakdowns and bar charts that one could only dream about ten years ago. I worked in the Cabinet Office in 1999 reviewing rural policy and one of my jobs was to go through all of the available data and statistics. It is amazing what we can do now with the data analysis but what we often find with rural statistics, and I would not level this at the Commission for Rural Communities, certainly the stuff that has come out of Defra on the rural productivity target is you get lots of graphs and bar charts and maps but there are hardly any words between them. In other words, we are overwhelmed with data and statistics but there is not the intellectual analytical resource to really get to grips with what this information is telling us and diagnosing what the problems are and what can be done to solve them. We are up to here with data and statistics but we do not have the capacity to do the analysis.

Q35 Chairman: With all this new stuff that is defined that they want to collect, how many years would you have to collect it for before you can draw any meaningful conclusions?

Professor Ward: There should be a moratorium on collecting rural statistics. This is rhetoric of evidence-based policy and it is compounded by the availability of bigger and better computers and better mapping software meaning you can map everything. The statistics are fantastic but they should be a means to an end. If you have 17 people in Defra responsible for rural affairs, I have three times as many at the Centre for Rural Economy at Newcastle University. There is not the resource to make sense of it all and to move forward on rural affairs.

David Taylor: We have these powerful machines and this capacious software and the beast must be fed, is that it?

Chairman: It sounds awfully like it.

David Lepper: There is outsourcing coming up here.

Q36 Dan Rogerson: You also said that the government needs to be clear about whether it is better indicators, better levers, to do something about it or a better vision overall. What is your opinion on it?

Professor Ward: I think stuff has happened to rural policy rather than them being on the front foot, a real strategic vision for whether we need rural policy and what it should look like in the context of climate change, CAP reform, in the context of city regions and the international knowledge economy and what have you, also the demographic trends, aging, counter-urbanisation, homeworking, the internet, et cetera. I think modernising rural delivery was about re-organising the institutional architecture very much in the context of cutting it back. The old rural White Paper of 2000 did not have much of a life because it took two years to prepare and then foot and mouth wiped it out within three months. That is where there is a deficit, in vision and strategy and political commitment rather than in data or even rather than in indicators.

Chairman: I thank you very much indeed for starting our re-focused inquiry off. I suspect that somewhere in the room is somebody from Defra who will be dutifully taking notes. When they come to brief the minister on what is required, it will be that the Committee spent a long time probing the new objectives of the department but both the committee and the witness were uncertain as to how it was all going to work, where the data was coming from, how long it would be evaluated for and what would this mean for policy. I hope that when the minister gets his note and ultimately comes before us and we get into this he will have some answers. Professor Ward, thank you very much, as always, for your very worthwhile contribution to our affairs. We very much look forward to your further written submissions. Again, may I reiterate our best wishes in your new role and thank you for coming before us.

Dr Stuart Burgess, Chair of CRC and Rural Advocate, Mr Graham Garbutt, Chief Executive, and Mr Roger Turn, Head of Rural Economies, gave evidence.

Q37 Chairman: May I apologise to our next group of witnesses for the delay, both occasioned by voting and, as you will see from our efforts to get into the subject; nonetheless, I am grateful to you for your patience. Can I welcome Dr Stuart Burgess, the Chair of the Commission for Rural Communities and indeed the Rural Advocate; Mr Graham Garbutt, the Chief Executive of the Commission; and Mr Roger Turner, the head of Rural Economies. You have obviously a flavour of some of the work we are doing. It would be quite interesting to have a word or two, Dr Burgess, to start us of. You are an expert adviser to government. Since you came into being what have been the main areas that government have asked you for advice as opposed to the information that you offered them?

Dr Burgess: The government have actually asked for lots of advice. The task of the Rural Advocate and the Chair of the Commission is dovetailed together. The work of the Rural Advocate comes out of my visits around the country drilling right down to local communities and all that grass-root experience which is incredibly valuable and also working as Chair of the Commission for Rural Communities. The government have certainly asked me around the issue of the rural economy in the aftermath of, for example, the flooding and the foot and mouth of last year and around affordable housing which I think is the major issue facing rural communities for the future. I believe if we do not get that right pretty soon then we are going to head for an enormous amount of trouble. Those are two examples. A third example is around farming and the use of land which I think is going to be an enormous challenge to us in the future and how we use what I call in my Rural Advocate's Report, and a phrase I now use, that our land is going to be a very precious commodity with many different demands upon it. They have asked me to further this, especially in terms of setting up a Commission on hill farming or uplands and to try to tease out the enormous problems that particular sector faces. Those are a few illustrations.

Q38 Chairman: You have an open door access to the Prime Minister of the day. Was it as a result of those conversations that these two reports were commissioned?

Dr Burgess: The access that I do have to the Prime Minister is both formal and informal: formal in terms of writing a Rural Advocate's report annually to him and presenting it to him and having a conversation about the major issues, but also more informal contacts wherever possible to meet with him, like at the party conference where I told him I was going up to Cumbria to visit the hill farmers. It was an opportunity for me to directly report. The great opportunity is actually to see that and report back to the Prime Minister directly.

Q39 Chairman: What was the process of commissioning the two pieces of work that we have just been talking about?

Dr Burgess: The Rural Economies Report came from the Prime Minister directly to me in a phone call last August in the aftermath of flooding and the foot and mouth of last year. Obviously I spent a lot of time around in the specific areas, certainly around Gloucestershire, visiting rural businesses in Tewksbury and flooded areas in Evesham and farms in Yorkshire. I did a lot of going out there and getting to know what was actually happening. He directly asked me to do that report on the rural economies.

Q40 Chairman: Rural housing, where did that come from?

Dr Burgess: Rural housing has been going on for a number of years now mainly because I flagged it up as the major issue and indeed fed into the government's report on housing chaired by Elinor Goodman. My evidence was gathered by going around the country and chairing eight regional inquiries in village halls and pubs into affordable housing. I was amazed at the number of people who attended. It is a very emotive issue out there in rural communities.

Q41 Chairman: Give us a flavour of what you have been told so far? If you had to summarise the main areas of concern that you have today, what would they be?

Dr Burgess: The main areas of concern would be certainly around the rural economy because I firmly believe if we are going to talk and define sustainable communities or vibrant communities, whatever phrase we use, then it has to be underpinned and under-girded by a strong rural economy and if we do not get a strong rural economy then the rest may fall apart. Secondly, affordable housing I actually believe underpins a lot of sustainability, if you like to use that word. Although I have particular solutions to affordable housing in terms of mainstream and community land trust, for example, that would be one of my main recommendations around affordable housing. In terms of agriculture and land and farming, that is a major issue. One of the major issues that everybody has to face, governments and opposition alike, is how much emphasis we are going to put on food security, which I actually believe is now very important. We have to unpack what we mean by food security. We cannot be totally self-sufficient but nonetheless I believe we need to be able to provide a lot of food locally grown ourselves and that is a major issue for the future. Going back to what I already said, in terms of the commodity of land that we have and the different demands upon it, one of the major issues is actually how we are going to use that land. How much land are we going to have for affordable housing, how much land for growing food, how much for biofuels - a question mark about biofuels - how much land for the environment, biodiversity and tourism and for the sheer enjoyment of what the countryside is about?

Q42 Chairman: It has a sort of command economy feel about it: the land plan by Burgess. Are you advocating that there should be some more specialist work done on optimisation of land use in addition to the inquiry into the rural economy and rural housing?

Dr Burgess: Forgive me for saying but I do not have the command plan for the use of land. I am here to raise the question, and the big question is around the future plan. It impinges obviously upon the rural economy but I am really after having a debate about it. It is an open‑ended debate because of the many demands upon it and there are going to be many people who take opposing views as to how this land will be used.

Q43 Chairman: As far as your report and the Taylor Report is concerned, indications are that you are supposed to be reporting during the course of this month to the Prime Minister. Are you still on track to do that?

Dr Burgess: Indeed, it is almost on track for next week or the week after. There are just some minor adjustments to be made to it but I certainly hope that it is going to be printed and out this month.

Q44 Chairman: Have you had any indication as to what happens next when you have produced the report?

Dr Burgess: I hope initially to be able to present it personally to the Prime Minister, that is number one. I hope that soon after that there will be an opportunity to talk to the Prime Minister about the particular issues that hopefully I am raising in that report. Finally, I hope that the report could actually be used as a way of stimulating, in no small way, the rural economy. I have great hopes.

Q45 Chairman: Were you given any kind of assurance at the outset that if the government says there are some good ideas in there that they are going to do something with it? There is a difference between, if you like, playing to the audience and saying we will have a report or am I looking for policy solutions. Both in the case of the rural economy and some of the difficulties that it has faced, for all of the reasons you alluded to, and again with Matthew Taylor's Housing Report, that has been one of the most intractable problems. Do you think that we are heading in the direction? Our previous witness said in terms of the priority which Defra were giving to rural affairs, if nothing else, the proxy of the number of people indicates a diminishing response in that department. It is supposed to be in charge of rural policy. You have come along as an author of a very important document on the economy but I would be worried about what is going to happen. If I have some good ideas, is someone going to task Defra to do something about it? Have you had any assurances at all on that?

Dr Burgess: It raises a very interesting question and it also raises the question over my Rural Advocate's Report. If I may use that as an illustration, with the Rural Advocate's Report, even though I came out with a number of recommendations which criss-cross over different government departments, in my letter to the Prime Minister I highlight four or five particular issues such as the Commission on hill farming for example, and expect and hopefully have a letter back, which he did, on the Rural Advocate's Report saying he supported it, he supported its recommendations, and over to me to carry them forward. Over the Rural Economies Report quite honestly I do not think anybody without reading the report can say is this is a good idea or not; it has to be tested out. This is where it comes over to me as the Advocate to have powers of influencing and pushing it and not to say go away, as it were. I actually believe that the Rural Economies Report, when it comes out, will stimulate conversation and I believe we can feed it in across government departments to make a difference. You rightly referred to the number of people in Defra being reduced in terms of rural policy. We would all love a department for rural affairs, for example, and I would love a budget of �100 million, et cetera, but this is not where we are at so we have to find different ways of doing different things and punching above our weight or doing our very best to do that. It is also important, certainly from my work from the Commission's point of view, to actually see that we need to influence not only Defra but also different departments as well. I spend quite a lot of time with my fellow people in the Department of Education, for example, and Health and BERR and Transport and going across the piece, as it were, to try and influence and make sure that rural affairs and rural issues are raised.

Chairman: I am always interested when things are raised about what happens.

Q46 David Lepper: The Commission said, in their submission to us, that they had a particularly close interest and involvement in the topics set out in Defra's departmental strategic objective. You heard our discussion earlier about that particular objective to develop strong rural communities. From what you have said to us already, would I be right in guessing that Defra has specifically asked for your advice, the advice of the Commission, on the development of strong rural communities?

Dr Burgess: Indeed, if I may in a moment bring in my colleagues as well, absolutely, but also with a strong emphasis upon the disadvantaged in rural areas because that is a very important issue not to be missed and that is our strap line about tackling the disadvantaged in rural areas. All of us who have a passion for rural communities and rural people are about making sure that there are strong vibrant communities, whether you call them sustainable or whichever word you use, but absolutely.

Mr Garbutt: It is important to recognise that the DSO has two components that do relate directly to the remit of CRC in the Act that created us so in that sense there is a strong link, a strong congruity, between what Defra is aiming at and what we are tasked to do. At the same time it is important to say that CRC is an NDPB with a degree of independence and Stuart, in particular as Rural Advocate, embodies that independence. It is also the case, therefore, that CRC does set its own corporate plan. We consult Defra as that goes along and, as others have said, we work very actively indeed with other departments as well, not just through Defra but directly. We have quite a broad grasp of the issues and a good relationship with Defra in terms of what they are required to do. We do not see the DSO as constraining on our activities but we do talk closely with them about the corporate plan objectives.

Q47 David Lepper: Is there any particular advice the Commission has given Defra in particular on that DSO?

Mr Garbutt: Not specifically on the DSO; it is a continuous process. The PSA/DSO process was one conducted largely within the Civil Service and presented to us. Given its breadth and flexibility, frankly I would not have wanted to spend a lot of time discussing it because it is more important that we get on with managing CRC given our clear focus, fairly tight remit and limited resources.

Q48 Chairman: Could I ask a little question because Professor Reid mentioned in his evidence this voluminous and fascinating document, the State of the Countryside 2006. I was not thumbing through it but I came across, towards the end, a series of challenges and some little vignettes about solutions to the conclusions from this vast amount of work. If I had gone to all the trouble of producing all of that, do you think it really was the best possible response from government that they then ask you to produce another report on the well being of the rural economy and get somebody else to analyse the rural affordable housing issue which you have done in volumes in this document? You seem to have done all the work already.

Dr Burgess: We have done a quite a lot of work and I applaud the work we have done. I suppose it was out of our remit to actually say who does what but, on the other hand, we produced some excellent work on affordable housing which we fed into the government's committee which built upon the work that we did there. The Rural Economies work builds upon what we have already done in The State of the Countryside Report so far. There is a sense in which there is a stepping stone process.

Mr Garbutt: One of the things we have tried to do in moving on from the culture of the Countryside Agency and with the new smaller more focused organisation is to get a better balance between analysis, which largely is what those reports are about, and practice which is uncovering finding best practice and getting it into the delivery bodies and advocacy. Those three concepts, analysis, practice and advocacy, are at the heart of the kind of organisation we are trying to create at the moment. In a sense the analysis bit, as Neil said earlier, is something we have large volumes of data about but the challenge is to get it into practice as policy.

Q49 Chairman: When you look through it, to the intelligent reader, and I am sure government officials are very intelligent, it highlights some of the challenges that are there. You would have thought that people would not have needed more work to be done. Because they are policy makers, they would have said here is this tremendous analysis and it shows strengths, weaknesses and challenges right across every aspect of the rural economy, a fantastic piece of analysis, what have we to do is try and move on to what we are going to probe you about now, the question of achieving the new government objective of a strong rural economy. We seem to go from one report to the next without very much policy action.

Mr Garbutt: With respect, you may be assuming that Stuart's report on the economies is more analysis.

Q50 Chairman: No, I am saying there is plenty of it here.

Mr Garbutt: We are trying to move on to the notions of getting very good practice and advocacy out into action rather than conducting more analysis. That is the point of the report.

Q51 Dan Rogerson: I ought to say it is very nice to see you not surrounded by crustaceans. It was very nice to have you visit the National Lobster Hatchery at Padstow with the minister who is speaking elsewhere. On this aspect of the definition of what the department is trying to do for rural communities and with rural communities so that it can monitor whether it is achieving its own objectives, do you think it will be helpful for the department to have done what the RDA say, which is to give a definition of what is a strong rural community is so we know what it is we are trying to achieve?

Dr Burgess: If I may say, it is very hard to define what we mean by a strong rural community. I have had the opportunity and the great privilege of travelling extensively around England and extensively around rural communities. Although I can go into some communities and reflect and say there are many signs there of this being a very strong community, for example Blisland down in Redruth not terribly far from where we met, is an indicator to me of what a strong community could be about. It has 600 people and is being put together by some objective, won mainly by the local people raising �60,000 themselves for example, and they have this particular building in which there is a shop, a post office, a cafe with internet connections and there is a doctor's surgery. There is a sense in which that, if you stand back, could be interpreted as an amazingly strong rural community and the life and the energy that is there is absolutely fantastic but that is not replicated in every place as we know. Although I am very committed to developing strong rural communities there is long way to go.

Mr Garbutt: If the question is would we benefit from Defra working on that definition, it has to be a cross-government definition. A lot of the issues we have spoken about already, in relation to housing and transport, and obviously the economies fall outside the strict definition of what Defra is. As we have said, our interpretation necessarily comes from one which looks across all of the requirements of communities so it would not necessarily be the one that Defra itself would embody. Certainly our work on trying to think about how communities for the future can have a strong sense of what an English rural community in the 21st century is, so not one founded too much in nostalgia but thinking consciously about the opportunities for the future, thinking about a broader context, that is very important as are the issues around the economy, around transport, around services, around leadership and issues around governance which you have touched on already.

Q52 Dan Rogerson: If we are to assess whether an objective has been met, then do we need to tie it down a little bit? Incidentally, Blisland is near Bodmin not near Redruth, which is in my constituency. As you are travelling around the country I imagine it blurs into one. In terms of what the vision of what a strong rural community is in England, or indeed in Cornwall, it would be useful to have some form of definition so that we all know what we are doing. Even how we measured that strength might vary from place to place, what it looks like from place to place, if it is going to be an objective. Are you saying it should not be the objective because it is impossible to measure?

Mr Garbutt: You have answered the question. It needs to vary from place to place and we need to use the mechanisms within the Sub-national Review, which we have heard about, to allow devolution, subsidiarity if you like, in local definitions of what a particular strong rural community might be. I have worked for a long time in urban policy and I tend to draw comparisons to what has happened with our regional cities over the last twenty years and there is a sense in which they manage to separate themselves from nostalgia from the Victorian big city, big municipal government, to something which was a pretty concrete vision of what an English regional city now is. There is a case for having a debate, not to produce a blue print, a common format, but to encourage people to think about what is a strong forward looking rural community in the 21st century. We are still held back a little by a perspective on rural communities which is bit nostalgic and does not address that challenge.

Q53 Chairman: Defra tried to explain it to us and it reads like an estate agent's set of words. It says "A strong rural community are places where people want to live and work now and in the future." I think that covers the entire world really. Then they go on to try and explain this by saying they "meet the diverse needs of existing and future residents and are sensitive to their environment and contribute to a high quality of life." Then it tells us these strong communities are "created by the people who live in them and it is reinforced by diversity and the extent to which all members share a sense of place." If I was selling a house and I put this is what it is like to live here in Little Chordley-cum-Hardley I think I might find that a mouth-watering definition. The problem is Defra have tried to define this, in terms of their indicators, in economy terms, gross value added and then a great melge of other indicators. It does not quite chime with the nice words that are used. My specific question is in terms of the revised new indicators are the quotations they look for measurable and have they chosen the right definitions to actually say whether place A or place B are strong?

Dr Burgess: Can I make a general point and then I will pass over to Graham who will be a little more specific. What you have read out is fine painting an ideal picture. All of us could say from an idealist point of view what is a sustainable rural community. I gave the example of Blisland to be one. Rural communities are diverse and are changing all the time and we need to take that on board. For example, if you go to Grewelthorpe in Yorkshire it is surrounded by stunning countryside but the village itself has the mark, as you go through it, as you walk about it, of being very disadvantaged and very poor. If you go to the market town of Boston, which before the migration of Polish people was a bit of sleepy market town, you could say in some ways that was a vibrant community fulfilling many of the things that you have just read out which Defra quoted. You can go there now and because it has a large Polish population, with Polish pubs, shops, et cetera, and migrant workers bringing in enormous value to the rural economy, certainly in Lincolnshire which would collapse without them I think, you could also define that as a very strong rural community and very vibrant but it is in a different way. I would say rural communities are very diverse and are changing all the time.

Mr Turner: To come back to your question, do the indicators, as it were, lead you to the conclusion that if the direction is positive that you achieve strong rural communities, I would be more comfortable in answering that it leads to an ability to achieve the intermediate outcome first and that the intermediate outcome has two different components. As most of government economic policy is focused upon achieving economic growth, and as most of the ways of measuring economic growth and the drivers of economic growth depend upon an ability to use this at times awful indicator of gross value added and gross value added per worker, the ability of rural areas and rural representatives to be able to show, as Professor Ward said, that the contribution rural are making to that national and regional economy is strong or healthy, or whatever, depends upon having that ability to measure it in those terms. GVA is important in a way not necessarily for achieving or defining strong rural communities per se but to show that rural is making a contribution to the wider economy at different spatial levels. Unfortunately rural economies have been disadvantaged for many years because we have not been able to measure it using those measures. The ability of an individual place to say we are growing faster, we are making a bigger contribution than some of the areas you are targeting in the city regions, we have not been able to make it in those terms and we have had to use other ways of describing it. In itself, however, that does not lead to an understanding that you have achieved economic health and certainly it does not, in itself, describe what you need to do in order to achieve better economic performance or economic well being; it simply gives an ability for some, at a national and regional level, to put the rural economies' output in the same terms as the major cities can do and say: we are not marginal, it is not always negative, it is actually making that strong contribution to something else. It only becomes meaningful relative to that objective if you can then say so what makes that economic growth, that economic health, different in different areas and what would you do to intervene to boost the areas that are poorly performing. It gives a first stage that we have not had. It does not lead you to the ability to say, therefore, we are likely to have achieved strong rural communities.

Q54 Chairman: I go back to the question I set Professor Ward for his homework and I set the same one to you. Would you have recommended to government a different definition to determine the achievement of this strong rural community objective than what they have identified?

Mr Turner: We, firstly, did recommend at the very outset of the PSA, the PSA4, that this indicator should be available in order, as I say, to give the rural economies and their representatives on the same economic map as other parts of our economy. We were disappointed it took so long but pleased it has now got there. As I indicated earlier, in terms of achieving economic growth, if that is the primacy of the economic part of strong rural communities, it has to go further. It has to, in our view, not only embrace individually those indicators that were on the DSO before they were changed, but even further than that there has to be a set of other immediate indicators not only focusing on the wealth creation side, which is what GVA and output measures of that type do, but to focus upon some of the wider dimensions of the economy that the local authorities, the sub-regional partnerships, the bodies like ourselves, quietly rightly focus on and which do not always feature in economic strategies and economic growth projections. Things we have been talking about, such as affordability of housing, it is not a wealth creator in itself but it does limit the ability to sustain certain types of economic activity or to retain your young people in the community for example.

Q55 Chairman: I find that a very coherent explanation. We have recorded what you have said now but, bearing in mind there may be other quality of life issues as well that ought to go in there, perhaps I could ask you to consider if you had the clean piece of paper and were able to set down the objectives of what this thing called the strong rural community would look like what would your version of it be? We would find that extremely interesting to have a look at and learn from your experience. It does strike me that you are, as an organisation, a great collector of data and, therefore, you will have a good feel for the data and what are the messages that could inform an appropriate indicator to define what this thing called the strong rural economy is. One of the things I mentioned with our previous witness was the focus, in these immediate outcomes, on the poorer performing areas. Is that the right focus, bearing in mind that says we are going to look at the worst performers and we are going to focus neither the worst nor the best but we are not going to try and find ways of maximise the best? Have the government got the right focus?

Mr Garbutt: Firstly, and this is a bureaucratic answer, it is the definition in the Act under which we were created that we should focus on areas facing economy under-performance. It was the will of parliament that we should give that impetus to our own work. You will find that our forthcoming work does look at rural economies more across the piece in terms of issues around investment, innovation, leadership, et cetera. That is what I was referring to earlier and we are not at liberty to discuss all of that with you. We are not confining ourselves to under-performance although it is a core part of our remit.

Q56 Chairman: When you say you are not at liberty to discuss that with us, can you be more specific about what work you are doing, where is it going and where is the boundary between what you can discuss and what you cannot?

Mr Garbutt: I was specifically referring to Stuart's report to the Prime Minister which is how we strengthen rural economies in the light of the crisis from last year.

Q57 Chairman: If the timescales follow, we can have it.

Dr Burgess: Absolutely, as soon as possible. Even though in the Act, as Graham has rightly said, there is a particular focus on the economically lagging areas and the under-performing areas, we have to see the rural economy as a whole. Having said that, there are particular ways in which we should help. It is about people, in the end, and people are very important behind all this. For example, in many of the coastal areas around Licolnshire, Mapplethorpe for example, and around the Yorkshire coast like Bridlington and Hornsea, like the Cumbrian coastline, there are great pockets of under-performing and young people with low aspirations. There is a real sense in which I believe, as a general economy, we have to applaud what is going on in the stronger performing areas but also try, certainly for those young people with low aspirations, to actually give them some hope in some of these areas. We have come up with particular solutions in that way.

Q58 Chairman: Can I ask you a question which arose out of some of the earlier discussion? Do you envisage a situation, going back to the Defra estate agent-type definition, where you would see a strengthening rural economy actually attracting people from urban England to actually work in rural England? The flows that we discussed earlier were very much about people going to live in a nice pleasant rural environment but still working in an urban environment. David Drew's line of questioning touched on that. How do we stem the tide of people who want to leave the rural economy because there do not seem to be the opportunities to detain them and the question of the affordable housing and there is nowhere for them to live? If you were wholly successful you might see people saying look at all this interesting economic activity out there, I am moving because that is the right place to work.

Dr Burgess: There is a lot of diversity going on. The facts and figures we have unearthed over the last three years, on average 70,000 to 80,000 people are migrating from urban areas into rural areas and that is net migration. Obviously many young people are moving from rural areas to urban areas for lifestyle choices, university, higher education, and so on, but the net migration is between 70,000 and 80,000 people. They fall into to age categories, obviously the people who want to go and retire there but also a number of people between the ages of 35 and 50. When I asked them why they have actually moved from an urban area into a rural area they say for quality of life issues. Their perception is that the schools are better in rural areas, that there is low crime, et cetera. The whole thing becomes even more diverse because my experience really has been for 20-odd years rooted in Yorkshire. The A1M has been opened up so there are many people who have two different life styles. They work in Leeds and Bradford to which they can commute very easily yet they live in some beautiful rural areas around Rippon. On the other hand, there are many people who have set up rural businesses, and especially women, who are really pioneering in many ways what the rural economy and rural businesses can achieve in the future. It is dependent upon good quality broadband being available and one of my recommendations to the Prime Minister in the Rural Advocate's Report is to make sure that broadband is accessible throughout England, which it is not at moment, not only accessible but good quality and then we must think about the second generation of broadband if you like. The rural economy is actually dependent upon new technology being developed in a strong way.

Q59 Chairman: The inquiry we have is talking about the potential of the rural economy. Have you ever done a back-of-the-envelope calculation to say we are where we are, here is the GDP we have got from what we think is the rural economy, if we cranked it up so that the worst were achieving what the best were achieving, if we said the bottom 25 per cent of rural economic zones we could crank them up to be somewhere near the average, or whatever definition you chose, what is the difference between where we are and where we could be?

Dr Burgess: I think Roger will have the actual figure to give you but I have come to the conclusion that there is a lot of unfulfilled potential out there in the rural economy.

Mr Garbutt: We cannot give you the figure. It is in the report to the Prime Minister.

Q60 Chairman: Can you tell us where we are now?

Mr Turner: This is not based on GVA because until extremely recently there were no figures available for GVA that could cut in a rural urban way. This is based upon the revenue earned by the businesses in rural England that are registered for VAT and PAYE which is not the whole story but a good proxy, and that is between �304 billion a year and if you include some of the larger market towns it could take you up to over �400 billion a year. That is on basis of regularly recorded and registered data that has been put together using the rural urban definition to take it to the lowest level, villages and hamlets, sorted out from the rural towns.

Q61 Chairman: Even a one per cent change could be very significant for the economy as a whole.

Dr Burgess: Absolutely.

Mr Turner: We think the figures of a potential we have worked through are eye watering. The benefit again, if I may go back to one of the benefits of this GVA, is it is that type of analysis of what is the gap in output that is regularly used to secure both political buy-in and resources to some of the big initiatives we have seen. For example, the Northern Way, how do we rebalance the north economy with the south, has been able to use GVA and there is an output gap of �30 billion between what you would expect, if it was not the north, and what it is actually currently delivering. The ability of rural economies to secure that same buy-in depends upon this type of material being available.

Q62 Chairman: To use the famous Paretean criteria which says you get an increase in economic benefit or welfare if one person is made better off and nobody is made worse off, do you think that is achievable in terms of developing the rural economy but not to the detriment of the urban economy?

Mr Turner: We do not, in many ways, see it as an either or. As Professor Ward said, there are so many linkages and it is important that those at different levels who plan the interventions and resourcing of our rural economies understand those linkages and the drivers of that growth before they then decide how best to do so. Certainly the potential that we estimate is not based upon what will be taken from an urban area but it will be an additional growth that we could hope for within the national economy. Coming back to an earlier point you made, rather than just focusing on those areas that are poorly performing we can also identify better those areas that are making a more substantial contribution and why they are doing so already. If we can focus on those and say so how can we expand and transfer that, which I believe our work and this type of analysis starts to give us the ability to do, then we can truly say this leads to an expansion of the economy in different dimensions because you have spotted the winners and because you have focused on achieving more of the high growth business activity and employment forms, et cetera, within rural economy. Coming back to the point you just made, it is not just on the wealth creation but it has to be in a way that we can recognise how the benefits to all of us who live and work and visit rural economies can be done. That is why we feel that economic growth per se should not be the end focus of either strong rural communities or the economic part of it, the economic well being, so that beneficiaries and the consumers' intervention is as important as the new businesses started or the business performance of those who are already there.

Q63 Mr Drew: The reason I disappeared was to go and hear a presentation on the postal review where they were trying to explain what they were up to and why they were doing it. At one level this has a huge ramification. You could say the universal service obligation cannot do it in the market economy to which we in the rural world would cry foul and say we do contribute an awful lot and you cannot just take away our camouflage as needing the sort of things we get through the universal service obligation. In this disaggregated world we now live in where everyone is saying we know the cost of everything even if we do not know the value as well as we should, this is a tense area. You could see the true marketeers arguing, and this was not what they are saying, we have to re-define the universal services obligation. These arguments are there all the time and they are pretty tense arguments and you have not got the easiest agenda to argue apart from what I have just heard. You could say what we contribute is that, and that would stun a lot of people in urban Britain but it is whether they believe you. The proof is in the eating.

Mr Garbutt: This is fascinating stuff as you indicate. You touched on the issue of city regions earlier and there is an issue about how rural hinterlands or quite separate rural areas relate to those and what their economic relationship is. Sometimes it is very scant. There are very vibrant rural economies that do not actually relate to their cities at all and simply jump internationally, nationally or whatever. We are working very hard to try and get a better grip on that issue. We are with the Northern Way people in Newcastle tomorrow specifically to develop that kind of argument. What we are saying is that there is no hard evidence that we are aware of - you may be and we are looking at this - that there are very strong benefits of large agglomerations. It follows that your question is it likely that we will be arguing for the development of stronger rural communities as economies and not precluding the possibility of people going to them must necessarily be part of the answer of what a strong community is. Part of the answer to your question is, whether it is post offices or poly-clinics or however they emerge from the debate - and we are working very hard on that - or the closure of schools, or rural transport, et cetera, if we are serious about having sustainable rural economies and sustainable communities then we have to acknowledge a different approach to land-use planning which may produce a different pattern of development in the longer term, especially if you look at transport technology over the next 50 years, which is the kind of timescale on which we build communities. There is a possibility that we may say, as a country, that actually the presumption that agglomeration is the answer to all questions is flawed, that it does not necessarily address what people want to do, it does not produce sustainability in terms of the pattern of post office services or others and we need to look more radically at that. Clearly that is a very difficult political decision because it does tend to go against the post-War assumption since 1947 and the Town and Country Planning Act of containment of development of rural England. It is a debate that is probably unavoidable and clearly we want to be part of that and help to get the best outcome.

Q64 Mr Drew: The problem for those of us who argue strongly for the retention of rural services, in a sense, is you could see this as self-defeating because as you expand broadband and make urban services more widely available in rural settings you could say we need less of those services. That is quite a difficult debate as we see exemplified by the post office debate.

Mr Garbutt: Health even more so. That is a debate we are all getting into it very actively.

Dr Burgess: The question illustrates the enormous change that is going on not only in urban areas but in rural areas. Secondly, the challenge is to try to come out with creative solutions to some of the problems around post offices and rural schools. There is an opportunity there to actually come out with some creativity around some of these issues. I have been amazed since I have travelled around how entrepreneurial some people are in rural areas. A good example in Cambridgeshire is in a medical centre where some of the work they are doing is pushing out the boundaries of medical provision in a rural community using technology to its great advantage and those are some of the drivers for the future.

Q65 David Taylor: I do not want to have a battle about statistics but in the CRC's memorandum, third page, 2.1, talking about the sales revenue being between �300 billion and getting on for �600 billion, I find that an astonishingly high figure. The jobs figure is about right, between 15 and 20 per cent, which is often the quoted figure for people who live in rural areas which is not the same, but for those 15 or so per cent of jobs to be producing �600 billion, almost half of UK GDP, sounds to me to be pretty unlikely. There is a sote voce addendum, if I can add those two together, in that you said, almost quietly, if you add in the larger market towns but if you add those in you are really not, by definition, still dealing with a rural area, are you, in the most urbanised densely populated large country in Europe? I do not think the official statistics are picking that up. They are exaggerating the role of rural areas, I fear, and your statistics are flawed.

Mr Turner: I am obviously happy to explain the analysis of the statistic if it helps but I think the critical points you are making revolve around two things: one is how do we define rural, and this is a particularly important one where we are trying to capture either economy is wealth or growth or change; and, secondly, is this an appropriate size of contribution from rural areas to the national or regional economies. The first one simply I have to answer by saying there is a cross-government definition of rural and that truly would not allow us to take account of some places that are above 10,000 population but clearly acting as the service centre for a substantially rural hinterland and have had both an industrial structure and still expect a flow of people and goods that reflect the fact it is a market town for a rural area would not include those in the bottom figure.

Q66 David Taylor: Weatherby, not in my own constituency, probably has a population over 10,000. Is that the kind of place you had in mind servicing the rural area though technically urban?

Mr Turner: Technically it is urban by the government's definition but because of the breadth of that type of town Defra have adopted for many years a local authority-based classification that acknowledges there some places like that, which is probably the only sizable town in the local authority and every other part of the local authority is rural at the most small spatial level and, therefore, it is mostly rural, 80 per cent of the population. That is where we get to the top end of those figures I talked about. At the absolute, if you curtail everything that is urban, i.e. 10,000 population above, as government define it, we are still talking about a revenue for the business base in those areas that is of that �300 billion to �325 billion a year.

David Taylor: It is punching more than its weight of population.

Q67 Dan Rogerson: I would like to turn to the very reassuring process, to those of us who live in rural areas, of rural proofing and how successful that is in terms of policy. As an MP of a rural area, my experience has been of services being withdrawn all over the place in terms of not only the public sector but also the private sector. Lloyd's TSB said as the last bank in town they would not close but now they have decided to close so all the people who switched to them, especially small businesses, have lost. The wonderful policy that was allowed to go through at European level about bus journeys, anything over 30 miles everyone has to stop and get off the bus and all the rest of it, right down to the poly-clinics you were referring to, City Academies being the way forward for education, a whole range of things. It may be that it is just policy as a whole which is failing and urban MPs are very unhappy too but it seems to me the process of rural proofing does not seem to be going on to a convincing level. What do you think Defra are managing to achieve, as it is something they have set themselves to be champions for rural areas in their sister departments? How well do you think they are performing in that role as opposed to what you are doing as an advocate for rural affairs? How well do you think Defra is doing?

Dr Burgess: To start off, as a general point, rural proofing is an incredibly difficult concept. We have to say to ourselves what do you actually mean by rural proofing. Secondly, even though it is a third strand having a watchdog role of the Commission's work it is, in my submission, probably the most difficult strand that we actually tried to tackle. We produce a report every year around rural proofing, as you know, and over this last report we have really said there are some areas which are responding very well to rural proofing, for example working with Jim Knight in rural schools because he has an understanding, with his background, of what rural proofing is. It is almost second nature to him to actually begin to think, at least I hope it is. There are other areas where it is extremely difficult to actually make sure that government departments are rural proofed. It is not only government departments, it is actually the RDAs because they have a responsibility under local authorities, and is that is where it becomes difficult.

Mr Garbutt: The poly-clinics issue is an interesting one. Poly-clinic is shorthand for what is a political issue. We have been very actively engaged in that and submitted very large dossiers into the Department of Health and met with ministers, and so on, and from CRC's point of view we feel we have had an impact. I know your question was about Defra and I am not dodging it but if allow me some flexibility I can answer it better.

Q68 Dan Rogerson: The example you have given us is of Jim Knight who has had a Defra background as well as being a rural MP and switched into another department. That is good but we will have to wait and see how the transport side of education policy, with extending compulsory education, goes on and opportunities for apprenticeships and that sort of thing. Where is the recognition? In another area, all departments are supposed to have green ministers who are doing all sorts of things in environmental screening what the department is doing. Is there a case for saying all the departments ought to have a minister who has responsibility for rural affairs?

Mr Garbutt: That is an interesting idea, just as there are now regional ministers and there is a case for asking those regional ministers to get involved in the rural dimension. That is something that personally I would think would be a good idea. You could do it through ministerial responsibility. What we are interested in doing, if I can answer it from a CRC standpoint, is making sure that the different strands of policy are sensitive to rural needs. When I mention health, we met with both ministers and officials. There is now a rural steering group as a subset of the Darzi Review of the NHS which I sit on. Our answer would be that we do work with individual departments at CRC and we do influence them in different ways. To answer the question you put to Neil Ward earlier, CLG is an area where one would say they have conducted some serious rural proofing, for example on some of the new governance arrangements they are introducing, and they have serious about that. They are working with us on a review of rural proofing at the moment so some of it is going on. The review we did last year of rural proofing indicated that one of the areas of greatest success was the government regional officers. As Stuart has already indicated, I think our view would be that is fertile ground for rural proofing for the future in the sense that the integrated regional strategies which you discussed with Neil earlier are about everything that goes on within individual regions across departments brigaded through the RDAs with a delegation structure to local authorities and it is possible to rural proof the whole of that exercise. We are talking to the rural affairs forums about their role potentially in rural proofing the regional strategies, and Defra does already fund the rural community councils to work on rural proofing local area agreements. Within all of that architecture, as you describe it elsewhere, there are points of intervention which both have potential but some of which are already effective.

Q69 Dan Rogerson: Bearing in mind what we heard earlier are on about the capacity in the department to do things, it seems to me that any rural proofing that is going on, to whatever degree of effect, is through associated agencies and bodies around the department and not at all being driven from within the department.

Mr Garbutt: The department has an interest, it talks to us about it, but I cannot honestly personally answer how they spend their time in this regard.

Dr Burgess: I would say that in many ways in theory they are very committed to it but in practice it becomes far more difficult to make sure that it is actually happening and being committed.

Q70 Dan Rogerson: They have set it as part of what they set out to do.

Dr Burgess: All I am flagging up is it is not an easy area; it is our most difficult area. Sweden, Norway, Finland and Germany think we are light years ahead of them and they are looking to us to help them to embed rural proofing but we, I would say, have a long way to go.

Q71 Mr Drew: Is one of the problems with rural proofing that there is an assumption that you will always defend what there is already almost to the absurd? If you have a school with one pupil, that is seen to be vital to that village and more sustainable because otherwise that pupil will have to be moved to some other school miles away, yet, in a sense, from the urban context that is what really gets their goat. If you see a school failing in a city and you could put those resources that have been spent on that one pupil into that school, it is a no-brainer, is it not? That is part the problem with rural proofing: there is almost an assumption you have start from the position of defence and improvement where you would never do that in an urban setting where you would say it is ludicrous, we should have shut that institution years ago.

Mr Garbutt: There are some aspects of rural service delivery which are intrinsically more expensive because of the distance factor, but you are absolutely right that per capita costs, for example, of primary school children can be higher in rural areas than urban. There is a political trade-off to be made about what you think is the right thing to do as politicians. I do not think it is for us to answer that.

Dr Burgess: You have obviously given a very extreme example. I think that in this country most governments, and I am being totally independent here, on the whole tend to be urban focused and I think rural proofing is about trying to make sure that a government, or governments, with urban focus really take the rural issues and rural communities, and therefore rural people, seriously in all they are trying to do.

Chairman: Thank you very much for a stimulating input to our first session on our re-focused inquiry. Thank you for your written evidence and also for the many publications you have been kind enough to send us. We have given you one or two indications of where we would like some further thought in writing and we look forward to receiving that. Thank you again for your patience and forbearance. The evidence session has been very worthwhile.