Growing the rural economy

Many residents of English rural and coastal communities benefit from a high quality of life, the characteristics of which cannot be obtained in the cities and suburbs.

However, life in the countryside or on the coast has its own, often distinct challenges, according to an LGA-commissioned report produced by Pragmatix Advisory.

Some of these are visible in official statistics: more poor-quality housing; higher suicide rates; more drug-related deaths on the coast; weaker rates of educational attainment; an ageing population; and a £102 billion productivity gap.

The geographical characteristics of rural and coastal locations – such as low population densities, sparsity, remoteness and peripherality – also present social and economic challenges.

Their often small labour and product market catchment areas influence the costs, scale and nature of economic activity that can be competitively undertaken. 

Rural and coastal locations have a disproportionate share of small businesses – and only certain industries thrive, with farming, fishing and agri-food, manufacturing (especially food and drink), and tourism over-represented. 

Lower rates of unemployment may mask a paucity of full-time, full-year secure jobs. With a quarter of rural workers not earning the living wage, affordability of local housing is an issue for local workers. 

However, the pandemic has stimulated new ways of thinking, and accelerated behaviour changes in consumers and businesses alike. Three trends have the potential to redefine the economic value of rural and coastal locations. 

The rise of ‘staycations’ has reminded older audiences of, and introduced new audiences to, what the domestic tourism and leisure sectors have to offer. 

Lockdown has also allowed many to revisit how and where to carry out ‘office’ work, while ‘green values’ reinforce the importance of England’s natural assets and a local food chain. 

If these trends are nurtured, and the appropriate investment is made in rural and coastal communities to leverage the associated economic opportunities, there is the potential for a substantial levelling up of rural areas’ prosperity.

These three trends could plausibly contribute £51 billion a year to the rural economy by 2030, representing growth of more than 10 per cent on the gross value contributed by the rural economy today. 

In this context, rural and coastal policy should not be seen purely through the lens of redistribution to reduce inequalities and deprivation. Instead, much the same as urban policy, it should be viewed in terms of investment to deliver sustainable returns to the national economy.


Rural recognition, recovery, resilience and revitalisation’ and its recommendations to government can be read in full on our website.

For related information, please read Pandemic ‘could boost’ rural and coastal areas


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Investing in small businesses