The UK Chancellor of the Exchequer Jeremy Hunt delivered his first budget announcement for 2023 known informally as the “spring budget” statement. With big wins for some northern and industrial authorities and different devolved administrations, but there were many areas sadly lacking including the rural parts of the UK.

Like all other budgets previously the UK government is again looking at urban areas for the growth following the pandemic and the Brexit vote of 2016, including new so-called “investment zones” for specific unitary regions in the country including Teesside, Manchester and Merseyside.

There was however a massive hole in the budget with an entire lack of references in the speech to rural areas apart from the nod and a wink for Whitehaven being rejuvenated with more nuclear as he spearheads a programme of “micro reactors” which will be part of the push to divest from fossil fuels.

Further, nuclear is also now re-designated as a green technology, meaning it can access much sought after funding streams which was previously denied to it because it was not seen as a renewable energy.

DEFRA funding shrinking

In the budget the Department of Food and Rural Affairs (DEFRA) will see its funding decrease to 4.4bn in the 2023-24 estimated budget stream, while the Department for Levelling Up, Housing and Communities will see its budget increase year on year over the next two years.

The government says it is “spreading the opportunity everywhere” in its statement again with only passing reference for rural communities as shown here;

“Opportunity is spread unequally across the UK. The government is committed to challenging and reversing that unfairness by ensuring the benefits of economic development are felt by people everywhere, whether in towns, cities, rural or coastal areas.”

Further the department for levelling up also seeks to create new “investment zones” in 12 urban areas of the country—not rural areas—and doesn’t seek to change their stance on how rural areas look to steer their way through the ongoing downturn in their economic output following the departure from the EU’s CAP system.

“The government is launching the refocused Investment Zones programme to catalyse 12 high-potential knowledge-intensive growth clusters across the UK, including 4 across Scotland, Wales and Northern Ireland. Each cluster will drive the growth of at least one of our key future sectors – green industries, digital technologies, life sciences, creative industries and advanced manufacturing – bringing investment into areas which have underperformed economically.”

Hunt’s 2023 budget also seems to completely ignore Cumbria which is currently being split into two combined authorities (north/south), meanwhile Northumberland on the East coast is set to receive £16.4mn for “regeneration projects.”

Commenting on the Chancellor’s Budget statement, Daniel Rad, Director of FERN, said:

As we have written before rural areas are often overlooked by Westminster governments and rural and farming communities are given short thrift in the wider thinking on devolution and economic empowerment. Rural homes are statistically more like to be not as well insulated as their urban counterparts and rural dwellers are likely to not earn as much as their urban counterparts.

A wider emphasis on creating a department for rural communities and innovation splintered off from the current vertical structure would do more for economic growth of their areas along with further devolution to regional councils who know their situations and can spend resources more wisely.

Further, enabling the Web3 revolution for rural areas and train locals on the benefits of rural stewardship through economic generative models would serve their interests better and bring more people off benefits if they are able to create their livelihoods.

Further the previously announced, Rural England Prosperity Fund (REPF) may fall short in meeting the needs of rural innovators due to its top-down approach. The government’s priorities and investment criteria may not necessarily align with the needs and aspirations of rural entrepreneurs and innovators. The rigid definition of what constitutes a rural area, the emphasis on capital funding for physical assets, and the focus on environmental considerations may limit the scope of projects that can receive funding. The lack of flexibility and autonomy in decision-making could deter some rural innovators from seeking funding and pursuing their ideas. Thus, a more bottom-up approach that involves rural communities and businesses in the design and implementation of the fund could better support their needs and foster innovation in rural areas.

What is the Rural England Prosperity Fund (REPF)?

The REPF supports the aims of the government’s Levelling Up White Paper and Future Farming Programme. It will fund capital projects for small businesses and community infrastructure in order to improve productivity and strengthen the rural economy and rural communities.

The REPF is integrated into the UKSPF – which promotes productivity and prosperity in places that need it most – and supports activities that address the particular challenges rural areas face, including lower productivity rates, poorer connectivity and poorer access to key services.

The REPF objectives sit within the UKSPF investment priorities for supporting local business and community and place and will provide capital funding to:

  • support new and existing rural businesses to develop new products and facilities that will be of wider benefit to the local economy. This includes farm businesses looking to diversify income streams; and
  • support new and improved community infrastructure, providing essential community services and assets for local people and businesses to benefit the local economy.

What will the REPF be able to fund?

The REPF will provide capital funding to support lasting assets such as a building or equipment.

Funding will be available for business or community purposes but cannot be used to fund domestic property improvements or buy private vehicles. Revenue costs such as running costs, salaries or promotional activities are not eligible for this fund.

Projects must be located or delivered in a rural area, which for the purpose of this fund are defined as:

  • towns, villages, and hamlets with populations below 10,000 and the wider countryside
  • market or ‘hub towns’ with populations of up to 30,000 that serve their surrounding rural areas as centres of employment and in providing services.

Projects will also need to consider how any award of funding will contribute to net zero and nature recovery objectives. These include:

  • the UK’s commitment to cut greenhouse gas emissions to net zero by 2050;
  • wider environmental considerations, such as resilience to natural hazards; and
  • the 25 Year Environment Plan commitments.