North East Rural Evidence Base Part 2

Rural Policy Support
One North East
Working Paper 2
July 2009
Contents
1 INTRODUCTION ....................................................................................................................................................................... 1
2 BUSINESS AND ECONOMY ......................................................................................................................................................... 3
3 EMPLOYMENT AND SKILLS ...................................................................................................................................................... 13
4 SOCIAL EXCLUSION AND ACCESS ............................................................................................................................................ 16
5 QUALITY OF LIFE AND PROMOTION ........................................................................................................................................ 21
6 TYPOLOGIES .......................................................................................................................................................................... 24
7 REFLECTIONS ON THE SUITABILITY OF DATA........................................................................................................................... 35
8 RURAL FUTURES NORTH EAST ................................................................................................................................................ 38
9 ANNEX A – CONSULTEES......................................................................................................................................................... 51
10 ANNEX B – BIBLIOGRAPHY....................................................................................................................................................... 53
11 TECHNICAL APPENDIX 1 - PROVIDING AN EVIDENCE BASE FOR THE UPLAND AREAS ................................................................. 56
12 TECHNICAL APPENDIX 2 - METHODOLOGY FOR MULTIVARIATE ANALYSIS................................................................................ 59
13 TECHINCAL APPENDIX 3 – IMPLICATIONS OF USING LSOA GEOGRAPHY FOR ANALYSIS OF BUSINESS GEOGRAPHY ...................... 67
1 INTRODUCTION can be found at Annex B.
1.5 Sections 2 to 5 of this working paper reflect on the Evidence

1.1 This is the second working paper to be produced as part of
Base findings in the light of the consultation process and
the Rural Policy Support research project being undertaken
wider literature review. The sections have the same headings
for One North East. It follows on from Working Paper 1,
as Working Paper 1 for ease of understanding.
which provided an objective Evidence Base for the rural North
East, drawing on a wide range of economic, social and Development of rural typologies
environmental data sets.
1.6 A specific output of this project was the development of rural
1.2 Working Paper 2 develops this research further, building on typologies to help non-specialists understand the differences
the Evidence Base. The remainder of this report is divided and similarities within and between the different rural parts
into four key sections, each of which is explained briefly of the rural region. The methodology, analysis and
below. subsequent findings for this element of the project can be
found in Section 6, with a Technical Appendix at the back of
Further analysis of the evidence base
the report.
1.3 The Evidence Base produced in Working Paper 1 was
deliberately objective and ‘place blind’ in terms of its Reflections on the data
approach to analysis. Following the circulation of the 1.7 In this section, we reflect on issues that have arisen thus far
Evidence Base to rural and other strategic stakeholders in the with the data available to produce the Evidence Base, and also
region, a series of consultations took place to contextualise reflecting comments on the suitability of data made during
the data findings. In all, 31 stakeholders were consulted – the stakeholder consultations. It is hoped that this will help
the majority face-to-face – in order to provide the qualitative future similar research projects.
information to explain, support or refute the findings of
Working Paper 1. A list of the stakeholders can be found at Rural futures
Annex A.
1.8 The paper includes a Futures section. This has been written
1.4 In addition to the stakeholder consultations, a comprehensive by Professor Rob Huggins of the School of Management,
literature review was also undertaken so that wider research Cardiff University and Rob Hindle from the consultancy team.
could be reflected in the project’s findings. A bibliography The paper is a “think piece” rather than the result of full
1
Rural Policy Support – Working Paper 2, July 2009
futures exercise. It has been produced as a response to the
evidence base within input from a peer review panel and is
intended to help inform policy for One North East and have
wider implications for the North East Region..
Technical appendices
1.9 This report also contains three technical appendices:
• The first, written by NERIP, explains the issues around

determining the boundaries of the North East Uplands
according to administrative (i.e. data) geographies. This
relates to the analysis undertaken as part of the Evidence
Base (see Working paper 1)
• The second, written by Paul Cowie at the University of

Newcastle, sets out the statistical methodology used to
determine the typologies
• The third, written by NERIP, highlights a particular ‘health

warning’ with respect to the typologies, that is the use of
business unit data from the Annual Business Enquiry.
2
2 BUSINESS AND ECONOMY manufacturing; it ignores some interesting examples in more
remote rural areas. The following Rural Snapshot gives one
such example in Teesdale.
Industry sectors
RURAL SNAPSHOT
Manufacturing occurs on the edge of urban areas...
Local manufacturing supply chains in Teesdale
2.1 Part of the reason for the high rural employment levels found
RW Injection Moulding, based in Middleton-in-Teesdale,
in the North East manufacturing sector – and identified in the
produces high specification plastic components for the
Evidence Base - are due to specific locational issues. Many
medical and pharmaceutical sectors. The company has
manufacturing concerns require a large spatial ‘footprint’ for
developed a strong local purchasing policy, extending its
their operations which cannot be accommodated in an urban
economic impact within the local rural economy.
setting. They therefore tend to cluster around the edges of
conurbations, where space is available and proximity is The firm’s clients include GlaxoSmithKline (GSK), the UK’s
retained to the larger urban customer and labour markets. largest pharmaceutical company, based in Barnard Castle ten
Consultees doubted that large numbers of rural residents miles away. GSK is a significant employer in and around the
benefited from such businesses. market town, employing some 1,000 people directly.
2.2 In reality, such industrial areas would normally be thought of The current economic downturn caused GSK to announce 200
instinctively as urban rather than rural. However, for data redundancies in December 2008, although this number may
analysis purposes, these have had to be classed as ‘rural’. be reduced following an order for 70m swine flu vaccines
This undoubtedly throws up anomalies which need to be from the Government in June 2009.
recognised. This goes beyond just manufacturing, and also
affects how large business parks are categorised. For Forestry – a small but important sector
example, a substantial part of the Team Valley Trading Estate 2.4 Because of its size, and issues with disaggregating
in Gateshead is classified by the ONS as ‘rural’ (see the employment data, the Evidence Base made little reference to
Typologies section). the forestry sector. Yet the sector is an important element of
the northern Northumberland rural economy, and its
...but that is not the whole picture downstream supply chain is also part of the remote rural
2.3 However, this does not explain the full picture of rural manufacturing picture in the remoter rural areas.
3
2.5 The following Rural Snapshot demonstrates the depth of local Retail – a key part of the rural economy and residential offer
supply chains that the Northumberland forestry sector can
2.7 The retail industry was not considered in great detail within
deliver.
the Evidence Base. Although it is a significant rural employer
RURAL SNAPSHOT (the category of Wholesale and Retail Trade accounted for
12.3% of rural employment in 2007), its relatively ‘static’
A forestry sector with strong local supply chains
nature in terms of employment (little change over time)
The forestry sector provides a strong story for the rural North meant that it was not shortlisted for further analysis. In
East. It is successful, pretty much self-contained within the addition, the sector was relatively less important in rural
Region, supports a ‘deep’ local supply chain, attracts areas than in the region as a whole, and compared with rural
investment and delivers strong local economic benefits. England.
At the top of the supply chain is Egger UK, one of Europe’s 2.8 Notwithstanding its employment value, consultees stressed
leading manufacturers of chipboard and related products, the importance of a strong and vibrant retail offer to the
based at a 75 acre site at Hexham. It employs a total of 600 viability and sustainability of the region’s rural settlements.
people (the majority from within the region) and has recently Research undertaken for One North |East on market town
completed a £100m investment at the site. Economic impact retail distinctiveness has identified a range of factors which
analysis has shown that this investment was worth £179m to are thought relevant to delivering a retail experience that is
the local economy. sufficiently unique to attract shoppers and visitors. These
As a result of Egger’s operations, the forestry sector sustains include:
a range of other business, such as sawmills and processors • a market (e.g. farmers market)
that would not be viable without this wider framework. Other
• a good range of independent shops, with readily
spin-offs include the development of expertise and a supply
available local produce
chain in bio-mass heating systems which will support a move
• ease of parking
towards low carbon living and communities.
• historical character of the town, and located in a high
2.6 The forest areas are also a major recreational resource and quality rural setting
form an increasingly important part of the region’s visitor
• events, festivals and shows
economy (for example Hamsterley Forest in County Durham).
2.9 Anecdotal evidence suggests that retailing in market towns
4
across England has been hit badly by the current economic • Official statistics are also poor at monitoring seasonal
downturn. The closure of ‘anchor’ stores can affect the wider and migrant labour in the agricultural sector, which at
retail economy in smaller towns; the disappearance of times can be a very significant element of overall sector
Woolworths from many high streets appears to have hit them employment. This group of employees can act as
particularly hard. Furthermore, consultees suggested a something of a ‘buffer’ for the industry in lean times:
reduced ‘loyalty’ to local retailers by rural residents, farms can reduce migrant and seasonal workers in the
evidenced by greater use of supermarket delivery services as first instance, which helps to protect the core workforce.
an alternative to shopping locally. But it is a contraction which does not appear in official
statistics.
Agriculture • In addition, employment figures for the sector do not
reflect the very large numbers of agricultural workers or
Employment data can hide the full economic picture business owners that are self-employed, or those
2.10 A range of issues relating to rural – and specifically contract workers whose economic activity levels are
agricultural – employment can make it hard to judge the likely to vary substantially from month to month. Over
health of the rural economy using statistical data alone: the years, farms have reduced their full time workforce
to cut costs, and many rely increasingly on this contract
• Official surveys of employment do not present data on
labour. Contracting is also used by farmers and their
employment in the agricultural sector at a low enough
families as a means of bulking up farm income.
spatial level to support analysis. This gap is particularly
• A strong culture of self-sufficiency means that rural
acute in the Annual Business Inquiry (see the section on
areas tend to demonstrate much lower levels of benefits
data)
claimants. So benefits data may not tell the whole story
about rural unemployment or under-employment.
Limited opportunities for food supply chain development
2.11 The type and quality of land in the North East heavily
influences the nature of its agricultural output. As the
Evidence Base shows, the area of cultivatable land available
5
(6% of the region), and its quality (mostly Grade Three), contributing factor.
restrict the size and value of the North East’s agricultural
output. Susceptibility to external factors
2.12 As a consequence, the North East agricultural sector is 2.15 While not unique to the North East, consultees reflected the
predominantly livestock and Uplands-based. This sector is widely-known fact that the health of the agricultural sector
an important supplier of breeding stock to lowland farms. can be adversely affected by external factors, as witnessed in
Consultees felt that, to date, it has not supported the the Foot and Mouth Disease outbreak of 2001. This is an
development of regional supply chain links, with relatively area where RDA intervention can make a difference, as the
little value added to locally produced red meat products. following Rural Snapshot shows.
Consultees attributed this to a lack of investment in high
RURAL SNAPSHOT
quality slaughtering, processing and finishing facilities in the
North East, and the sometimes long supply chains of Supporting the region’s dairy sector
supermarkets. In June 2009 the national milk co-operative, Dairy Farmers of
2.13 While only a small element of the agricultural sector, the Britain (DFOB), went into receivership and its Blaydon dairy
region has a strong arable sector. This tends to be linked to closed.
larger farms and ‘agri-businesses’. Consultees suggested Using RDPE funding, One North East has helped a County
that any evidence of improved agricultural productivity in the Durham dairy to fill some of the gap left by this closure.
region was probably down to this sub-sector of the industry. £80,000 has helped the dairy to expand capacity by 30%, and
As expected, the location of arable activity matches the areas take on 16 people made redundant at DFOB Blaydon.
of higher quality soils – along the Northumberland coast, in
East Durham and around Darlington. The ‘mixed blessing’ of large rural estates
2.14 More generally, consultees thought that the North East’s food 2.16 Land ownership in the North East is concentrated in fewer
sector was less well-developed compared to other regions, hands than in many regions. Consequently the North East has
leading to fewer opportunities to develop markets for a much greater incidence of tenanted farms – and large rural
regionally distinctive products. The lack of a major local estates – than is usual across England. The Evidence Base
urban market, and distance from higher end markets in showed that 54% of land holdings in Northumberland were
London and the South East was also thought to be a tenanted, compared to 34% across England as a whole.
6
2.17 Consultees had mixed opinions about the consequences of been recognised by One North East through its 2007 work on
this – in terms of benefits and limitations. Some argued that the North East Rural Estates Framework (NEREF). This pilot
tenanted farming limited the businesses opportunities to initiative sought to develop a framework, including a
diversify, first because of the reluctance of some landowners diagnostic toolkit, that would help rural estates to achieve
to accede to diversification requests and, second, because their business ambitions and maximise their contribution to
tenants did not have access to the freehold assets needed to rural regeneration. Central to the project was the
secure the necessary capital funds or loans. At the same development of a new partnership between the estate,
time, consultees recognised that there were progressive community and public sector organisations. The Framework
landowners in the region, and that the number of tenanted is currently being reviewed and refreshed by the partners in
farms available made it possible for new farmers to enter the the project.
sector without needing access to substantial capital funding.
2.21 One’s efforts are reflected in national research into best
2.18 According to one consultee, recent months have seen a practice for rural estates (Forum for the Future, 2006). This
number of estates, or parts thereof, being purchased by also identified the crucial importance of estates working with
private investors looking either to broaden their investment local communities, delivering a clear strategy, and engaging
portfolio in uncertain times (and when land prices are doing with outside stakeholders.
comparatively well), or to sell off elements of the estate, such
as property. This may lead to reduced levels of private rented Enterprise and business characteristics
property in some of the more remote areas of the region.
2.19 Notwithstanding this trend, the region’s estates, while not The full extent of rural enterprise is under-reported
necessarily highly profitable, were considered to be 2.22 Official information on rates of business formation, growth
economically sound in the current financial climate. Credit is and survival comes primarily from information on VAT
still relatively easy to secure, underpinned by the current high registrations. Businesses operating below the VAT threshold
value of agricultural land. Some estates have engaged in are not therefore included. It is easy to dismiss these
innovative commercial developments, such as estate-wide businesses as small and ‘lifestyle’, yet many non-VAT
marketing for tourism purposes, or estate-wide agri- registered businesses are extremely viable, provide important
environment agreements. local services and contribute to the sustainability of rural
2.20 The important role of the region’s rural estates has already communities.
7
2.23 Despite their apparent limitations, businesses in smaller rural enterprise using traditional data sets will not capture the full
communities are important as they provide access to (often extent and nature of the sector.
limited) local employment opportunities. Whilst many of
these businesses have limited capacity for growth, supporting Strong self-sufficiency culture in rural business operations
those with potential offers significant value. Their growth 2.27 Business consultees suggested that there was a strong
provides a career path and route to increased earnings for element of self-sufficiency in rural business operations
local people, provides an imperative to achieve higher skills (especially in the land-based economy) which again might not
and offers an opportunity for “return migration”. be evident from data sources. Examples were given of
2.24 The Evidence Base shows that rural enterprises tend to be marginal farms in the North East where farmers had created
smaller than their urban counterparts, which might suggest new businesses (such as in transportation) to improve their
that more of this business formation activity is indeed overall financial position. The ‘informal’ use of family
happening ‘below the radar’ of the VAT figures. This view is members in running businesses was also considered to be
supported by evidence from consultees working with rural prevalent, and again not necessarily likely to be fully
businesses. They universally characterise the rural economy recognised in official employment data.
as one which contains a substantial amount of activity which
falls below official reporting thresholds. Any data on rural A challenge for traditional business support services
business performance is therefore likely to characterise the 2.28 Consultees believed that the structure and culture of rural
rural economy as being less ‘enterprising’ than is actually the enterprise posed a challenge for traditional methods of
case. business support. The absence of comprehensive business
2.25 Business consultees also suggested that rural business data makes it difficult to target support, while the self-
owners tended to run multiple businesses, forming new sufficiency culture and wariness of official institutions that
businesses in order to continue trading below the VAT consultees perceived in rural areas was thought to make
threshold. They characterised this as a cultural reluctance to effective delivery difficult.
become engaged with official institutions (an issue which is 2.29 Some consultees stressed the importance of locally-based
also relevant to low levels of benefit claims as we shall see intermediaries – known and respected by rural communities –
later), and a desire to remain price competitive. in overcoming these barriers and facilitating access to
2.26 The implication for policymakers is that any analysis of rural mainstream services. Routing business support through
8
local intermediaries and Enterprise Agencies was also for Rural Economy (2006), which demonstrated through
considered to be an effective solution. UTASS was mentioned survey evidence that more than half of rural micro businesses
as a particularly good example (see Rural Snapshot). were owned by in-migrants. The research suggested that
these businesses alone accounted for nearly 10% of the
RURAL SNAPSHOT
region’s rural jobs, and that they tended to be more growth-
A community approach to business support – UTASS oriented than their ‘indigenous’ counterparts.
Upper Teesdale Agricultural Support Services Ltd. (UTASS) is a
community organisation designed to support businesses, A ‘nursery’ for the urban economy
primarily in the agricultural sector, in Upper Teesdale. It 2.32 Two consultees suggested that rural areas can play an
helps businesses on a range of issues, such as grant and important role acting as a nursery for the urban economy.
payments applications, and the provision of important Examples were given of small, rural business start-ups,
information (such as grant availability and deadlines, and especially in the media and technology sectors, which had
veterinary matters). grown to a size where they needed to move to an urban
UTASS provides other important social and community roles, setting. This move became necessary because of recruitment
for example providing IT in the community, and running problems and the need for greater proximity to major
drop-in centres for young people. markets.
2.33 Instead of seeing this as a ‘loss’ to the rural economy, the

The enterprise value of internal migration consultees viewed this as a natural development and a role
2.30 Consultees suggested that internal migration was a that should be seen as an important contribution by rural
potentially important source of new enterprise in rural areas. areas to the regional economy.
Research by Stockdale and Findlay in 2004 also showed that
Broadband supply is still an issue
inward migrants into ‘accessible’ rural areas tend to be highly
entrepreneurial. 2.34 In Working Paper 1, an assessment of rural broadband was
made on the basis of data about the take-up of broadband by
2.31 Anecdotal evidence points to migration into the rural North
rural businesses (i.e. demand). However, it is clear from
East from beyond the region, with a proportion of these
regional consultations that there remain supply side
people then going on to start up their own businesses (often
challenges for those wanting to access and use broadband –
from home). This is supported by research from the Centre
9
businesses and individuals – and that demand in rural areas 2.36 While consultees recognised and commended One North East
across the country is already considerable (see Rural for its role in expanding the availability of ADSL1 into rural
Snapshot) areas, there was a concern that, with the development of
ADSL2, higher speeds and richer content demands, rural
RURAL SNAPSHOT
areas would soon begin to fall behind again.
Growing internet demand in rural Britain
2.37 The rural broadband challenge is not unique to the North
As part of the rural proofing of the Digital Britain Interim East. A national commitment to provide universal broadband
Report (see below), the Commission for Rural Communities coverage by 2012 has just been announced by the
researched the usage of the internet by rural residents and Government (Digital Britain 2009). But the commitment is for
businesses. They discovered that internet usage and a guaranteed minimum speed of 2Mbps. This equates to a
bandwidth demands were increasing faster than in urban reasonable level of service for today’s needs (90% of
areas. households already get this connection speed), but not
According to the research, more people in rural areas use the necessarily what will be required for business use in three
internet for transactions and for watching films and years time.
televisions than the country as a whole. These are clearly
linked to issues of service accessibility. Knowledge Intensive Businesses in unexpected areas
The report also suggests that the incidence of home working 2.38 The Evidence Base highlighted an unexpectedly high rate of
is three times greater in rural areas compared to their urban employment in Easington related to Knowledge Intensive
counterparts. This also has implications for the provision of Business Services (KIBS) – unexpected because of the
a quality broadband network. relatively low skills levels among the local population.
Consultations in Durham identified this as being related to
2.35 Consultees noted that broadband penetration of the more the district’s Employment Action Zones, where a number of
remote rural areas of the region was sporadic (sometimes call centre businesses were located.
varying from property to property). Other areas, including
2.39 Consultees also highlighted call centre facilities situated in
some rural towns, had problems with capacity and download
the Wear Valley, suggesting that there were good business
speeds which some consultees considered to be bad enough
reasons for their location in rural areas. These included a
to affect the operations of internet-reliant businesses.
strong work ethic, which has apparently helped to overcome
10
personnel issues such as high ‘churn’ of staff (a common total (the only region where this is happening), and its
problem in the industry) and poor attendance, reducing the reducing levels of productivity.
cost of recruiting and training. The nature of the business
2.41 Re-assessing the data, and taking into account the views of
also reduces the need for good road networks or proximity to
consultees, it would appear that this under-performance is
clients.
predominantly due to two issues. First, the deep-seated
RURAL SNAPSHOT challenges faced by the former industrial and coalfields areas
of the rural North East. Second, the low value economy on
Knowledge intensive engineering in a rural setting
the periphery of the region.
In 2008, the large global shipbuilding company IHC Merwede
acquired Northumberland-based firm The Engineering The rural industrial legacy
Business (TEB). TEB began life in 1997 as a spin-off from
2.42 The North East is alone as an English region in having such
Newcastle University and is well-known for its specialised
an extensive post-industrial problem located in its rural
design, engineering and construction abilities, especially in
areas. Other sub-regions in England have similar issues
the offshore, renewables and defence industries.
(South Yorkshire, North Nottinghamshire), but not to the
With its main sites in Riding Mill and Stocksfield, the company same extent. This would appear to be reflected in the
is firmly located within the rural region and is one of the deprivation figures. As the Evidence Base showed, 31% of the
largest companies in Tynedale. North East’s rural population live in the 30% most deprived
In 2009, the company received the Queen’s Award for localities, compared to the next highest – Yorkshire and the
Enterprise in the Innovation category. Humber – at 10%.
2.43 The data and anecdotal evidence would seem to bear out that
Conclusions these areas are significant underperformers. Declines in GVA
performance have certainly been more acute in County
Re-assessing GVA performance Durham than they have in Northumberland, which matches
the spatial distribution of the former coalfields and industrial
2.40 The Evidence Base suggested that two key areas of GVA
areas. As other elements of the Evidence Base demonstrate,
performance were critical challenges for the rural North East:
these areas have significant problems with deprivation and
its declining GVA contribution as a proportion of the regional
worklessness of a type more akin to urban rather than
11
‘traditional’ rural areas. likely to be of interest to policymakers:
The rural periphery

• recognising the potential value of in-migrants as an
2.44 At the other end of the rural ‘scale’ are parts of the North
important source of growth-focused rural entrepreneurs
East’s rural periphery, and particularly North Northumberland
• viewing the rural economy as a starting point and
and the far western reaches of the Uplands. Here, population
eventual feeder route for some firms which may, in
is much more sparse and the economy appears to be of very
time, need to relocate to the region’s urban areas for
low value in terms of wages and business performance. This
important business reasons
is likely to be related to the greater reliance on lower value
economic activity in sectors such as agriculture and tourism, • accepting the critical importance of quality broadband
which are also highly seasonal. provision to support the potential of increased home
working in rural areas
2.45 While a potentially sizeable undeclared economy may exist in
• promoting the value of the rural work ethic in helping
these areas, it seems likely only to provide a subsistence level
businesses to overcome some common ‘urban’
of income for many, rather than it acting as an ‘informal’
employment issues, such as high staff turnover and
driver of productivity. While agricultural productivity has
reliability
risen over time, this is more likely to have happened as a
result of business advances in the lowlands and among arable
farms.
2.46 These spatial/geographic differentials within the rural North

East are further explored in the typologies section.
Reviewing rural enterprise
2.47 Consultee’ views supported the findings of wider literature

and research in demonstrating that the nature of rural
enterprise is slightly different to that in urban areas, and is
difficult to capture in a ‘formal’ way. However, there are
some broad issues that arise from the research which are
12
3 EMPLOYMENT AND SKILLS • it may suggest that there are (predominantly low wage)
jobs in rural areas which are not attracting the
indigenous workforce
Employment flows
• equally, the issue may be more about the capacity of the
Growing long distance commuting rural labour force to meet the needs of the rural
economy during the seasonal peak demand periods
3.1 The Evidence Base relied on old (Census 2001) information
associated with agriculture and tourism
on commuting patterns. The consultations suggest that long
distance commuting is perhaps even more common today. 3.3 There is not enough information available to make a
Consultees from the Uplands noted that work done to judgement.
support the Northumberland National Park Local
Development Framework highlighted material levels of long Employment patterns
distance out commuting from settlements within the Park.
Home working links to the agricultural sector
Evidence of reverse commuting
3.4 In an urban context, home working is often characterised as
3.2 Anecdotal evidence from stakeholders appears to reinforce being linked to the service sector (desk-based and related to
the hypothesis in Working Paper 1 that rural-urban white collar jobs), such as business or personal services, or
commuting is not all one way. Employment opportunities in perhaps arts and crafts. However, consultees noted that, in a
some of the lower value industries, such as the hospitality rural setting, some of those ‘working from home’ will be
sector, were thought to be attracting workers from within the engaged in land based industries.
region’s urban areas. This clearly complicates the
3.5 Notwithstanding this issue, consultees thought it highly likely
understanding of rural (and urban) economic performance
that the numbers of service-oriented (white collar) rural
and begs further questions:
home workers would have increased substantially since the
• while rural areas may still be net exporters of employees 2001 Census (the source for the Evidence Base) especially in
to the urban centres, this masks another story (albeit areas with access to high speed broadband - the provision of
probably smaller in volume) about the urban good broadband access was considered to be highly valuable,
contribution to rural business performance if not essential to such home workers.
13
RURAL SNAPSHOT County Durham, FE provision away from the major urban
areas can be found in Consett (Derwentside College) and
A home-based creative industry in Northumberland
Bishop Auckland (Bishop Auckland College). A virtual college
Unison Colour manufacture hand-made art materials from a has been set up to reach parts of western Northumberland
barn adjacent to the owner’s residence in Tarset, which sits in (see Rural Snapshot)
the Northumberland National Park.
3.8 The region’s universities are concentrated in the major
The company produces half a million sticks of soft artist’s conurbations. This leaves very large areas of the rural region
pastels a year, selling across the UK, Europe and North – especially to the west – without easy access to FE or HE
America. provision. According to Defra’s rural district classification
system, the City of Durham is considered ‘rural’, and it has
Education and skills its own university. However, through the consultations it
became clear that regional stakeholders viewed this as an
Some rural schools are struggling with enrolment anomaly in the classification, rather than seeing Durham as
3.6 A number of consultees thought that the impact of an ageing some sort of ‘rural’ university.
population was already being felt by rural primary schools. RURAL SNAPSHOT
Some, it was suggested, were struggling to fill places and
Virtual Learning in Tynedale
their long term future was uncertain. This is one of many
issues linked to the planning system, which is discussed later The Tynedale Virtual College is an initiative designed to bring
in this report. additional vocational learning opportunities to rural parts of
western Northumberland. Part-funded by One North East,
Lack of HE/FE provision in rural areas the college is able to provide courses in Haydon Bridge,
Hexham, Prudhoe and Ponteland using local schools as
3.7 Information from HEFCE’s regional profile of 2007 highlights
bases. It also works with colleges and work-based learning
the lack of Higher and Further education provision within the
providers.
region’s rural areas. Northumberland has only one FE college
(Northumberland College) based in Ashington, with
Attitudes to higher end skills
associated centres in Alnwick, Berwick, Blyth, Ponteland and
Prudhoe. The college also has a mobile learning centre. In 3.9 One consultee from the business sector considered that rural
14
businesses struggled to recruit high quality people from the Its importance and its associated challenges (particularly
local workforce to fill senior positions within the public and around sustainability) are key parts of the Futures work,
private sector. They considered that training and which is considered in Section 6.
qualifications were not sufficiently highly valued, and that
there was a lack of developmental opportunities within rural Rural education
businesses. 3.13 The level at which education and skills data are available
means that the rural picture on qualification performance is
Conclusion quite generalised (district level data only), and the findings
with it.
The sustainability of economic flows
3.14 Nevertheless, it is clear that the sparsity of rural areas places
3.10 The economic flows between urban and rural areas in the significant challenges on the supply and delivery of learning,
North East – and especially people – are of paramount from primary schools with dwindling attendance through to
importance in understanding the full economic contribution FE and HE where larger numbers of learners are required to
of the rural region. Many rural residents rely on the urban break even. Technological advances are clearly an option
areas for employment opportunities, although the evidence here - another good reason for quality rural broadband
would suggest that this is not one way traffic. provision.
3.11 The implications of this large scale, daily movement of
people to work are considerable. Long distance commuting
has environmental implications, while increasing home
working – more common in rural areas – may provide a more
sustainable alternative. More widely, there may be knock-on
effects for those rural towns where ‘local’ residents are
squeezed out of the housing market because of the long
term increase in prices caused by an influx of relatively
wealthy in-migrants.
3.12 While consultees had mixed views of whether the issue of

rural-urban commuting was a ‘problem’, it is clearly a reality.
15
4 SOCIAL EXCLUSION AND ACCESS in the value of investment portfolios over the past year will
have knock-on effects for the disposable income of
pensioners, and possibly on the economies in which they
Population and migration
spend their money. Given the relative proportion of older
Ageing rural population – threat and opportunity people in some rural areas, and the size of some rural
economies, this impact could be significant.
4.1 Anecdotal evidence from consultees has reinforced the
findings from the Evidence Base of an ageing rural RURAL SNAPSHOT
population, a position exacerbated by inward migration of Planning and service delivery issues for an older population
older people, and outward migration of the young.
Recent research by the Centre for Rural Economy (2008) has
4.2 Consultees were keen to stress that this demographic trend investigated the likely impact of an ageing population on the
was unstoppable, and consequently that policy makers North East. It found, for example, that one third of Berwick-
needed to consider how best to make use of an older upon-Tweed’s population is expected to be retired by 2011.
population as a social and economic resource. Seaside communities and areas with high numbers of holiday
4.3 From a Third Sector and Local Authority perspective, homes appear to be most popular among older and retired
consultees noted that an ageing population would people.
undoubtedly have an impact on demand for services and the This has implications for planning and service delivery.
capacity of providers to meet growing health and social care Planning, because of the need to balance the demographic
needs (see Rural Snapshot). make-up of communities in order to make them sustainable.
4.4 At the same time, older people were viewed as being key Service delivery, because the research suggests that delivery
drivers of social enterprise and community activity. Older of rural health and social care services appears to be over-
people also had the potential to be important economic reliant on the Third Sector, and future service capacity may
actors in rural areas, as consumers, entrepreneurs and be a challenge.
employees.
Young rural residents leave – some return
4.5 Although it is not possible to quantify, the impact of the
current recession has been quite considerable for pensioners 4.6 The Evidence Base did not say much about the position of
generally, and those close to pension age. The dramatic fall young people within the rural region. Proportions of younger
16
people tend to be smaller in rural areas, but this said little bringing aspiration, resources (intellectual capital, skills) and
about trends. There was a widespread view from consultees opportunities to the rural communities of the North East.
that youth flight was an issue for the rural North East. On
4.10 Migrant entrepreneurship is a particular element of this rural
balance, consultees felt that the flight of young people from
demographic picture. For business owners relocating to the
their rural communities to urban areas was predominantly
North East from other parts of the country, the lower cost of
driven by access to employment opportunities rather than a
living can help to solve cash flow problems.
lack of affordable housing.
4.7 Young people with higher level qualifications were also Economic activity and worklessness
thought to be more likely to move to urban areas. Wider
research suggests that this is common. A move away from Differences between ‘agrarian’ and ‘industrial’ rural
rural areas to go to university is often difficult to reverse for
4.11 In the context of economic activity, consultees identified
young people. The leisure and employment opportunities
geographical differences, especially between the ‘agrarian’
afforded by the urban location of many HE institutions means
areas (the Uplands, the west of County Durham, the north
that it is hard to go back. However, this leaves the less well-
and west of Northumberland) and the ‘industrial’ areas
educated young people in the rural areas where employment
(former coalfields and industrial towns on the coast above
opportunities may already be harder to come by.
North Tyneside, and throughout central and eastern County
4.8 Anecdotal evidence suggests that some people do return to Durham). In the more industrial areas, patterns of
their rural ‘roots’ at the point where they have secure worklessness and deprivation tend to be similar to those
employment and a family. From a broader perspective, found in urban areas. However, the character changes in
consultees thought it healthy that young people should leave agrarian, remote and more sparsely populated areas.
their rural settlements, but should be encouraged to return
with new ideas and perspectives to inject into what are Self-supporting employment patterns
sometimes quite inward-looking rural communities. 4.12 Consultees stressed the self-reliant and sometimes insular
nature of the region’s rural communities, especially those
An important role for inward migration
living in the sparser and more remote settlements. This
4.9 As with returning young people, consultees broadly regarded culture of self-sufficiency was considered to drive an
the regional trends on inward migration as important in intolerance of unemployment, with four main results:
17
• an ‘aversion’ to signing on, meaning that claimant rates RURAL SNAPSHOT
may not provide a full picture of rural worklessness
Understanding rural worklessness
• people taking multiple, low value jobs to get by,
Northumberland’s Removing Barriers to Work Partnership
creating an ‘undeclared’ economy
(2007 and 2008) has undertaken a detailed examination of
• increased rates of part time working, perhaps as an
rural worklessness in the county. It identified four key areas
alterative to unemployment (for example, Tynedale and
where barriers existed to addressing worklessness at delivery
Berwick-upon-Tweed have low unemployment and high
level. Not all of them are unique to rural areas (e.g.
part time employment rates relative to other rural areas,
childcare), but they do help to demonstrate the range of
and particularly those post-industrial districts in County
additional challenges that exist:
Durham)
Economic - poor local job markets; travel costs to access
• failure or unwillingness to access employment support
training and services; predominance of part-time/seasonal
services such as job centres, both because of the stigma
work; low wage culture; childcare issues
associated with it, and the lack of penetration of
services in remote areas, making them geographically Environmental – inadequate and inflexible public transport;
remote. lack of local training opportunities; the absence of Further
Education
The role of the third sector
Personal - difficulties with the process of getting into work;
4.13 As with enterprise and business support, consultees family and women’s issues; skills not matching job
suggested that issues around rural worklessness and opportunities; motivation, loss of confidence and self-
deprivation might also be better routed through local esteem.
community interfaces, rather than with ‘formal’ official
Cultural - low wage culture, low aspirations and low
institutions, because of the same wariness about dealing with
entrepreneurial culture; stigma attached to worklessness and
‘officialdom’. However, those consultees with a greater
unemployment
knowledge of the sector thought that rural voluntary and
community organisations struggled to some extent with
capacity to deliver these services.
18
• the potential opportunities afforded by the two new
Housing Unitary Authorities to streamline planning processes
and make more consistent decisions
Planning as a barrier to sustainable communities
4.17 The following Rural Snapshot shows how progressive
4.14 A large number of consultees pointed to the planning system planning can help to overcome some of the problems often
as a barrier to the development of sustainable rural associated with planning in rural areas.
communities, and specifically the provision of more rural
housing. RURAL SNAPSHOT
4.15 Many referred to the findings of the Taylor Review of Rural Planning in Northumberland National Park
Economy and Affordable Housing as being relevant to the The Local Development Framework for the Northumberland
region’s rural area. Many rural settlements across the National Park recognises the need to allow proportionate
country have struggled to retain balanced populations in development to support the future sustainability of smaller
recent years, and as a result have lost their school, shop or rural communities.
transport connections due to a declining population. New
Its policies seek to enable the provision of new housing to
housing would help these shrinking settlements by creating
meet local needs (including ‘live–work units’) and to
additional demand to bring back key services. However,
accommodate inward migrants linked to businesses that will
sometimes the planning system requires them to be present
positively contribute to sustainability.
before any new development can be permitted. This vicious
circle can threaten the sustainability of already shrinking
Reductions in rented accommodation
rural communities.
4.18 Anecdotal evidence from consultees suggested that pre-
4.16 Consultees also mentioned two other factors relating to
recession house price buoyancy had resulted in a large
planning and housing development:
number of rental properties being lost to the rural region.
• the need for planning systems to take into account With low rental yields and higher maintenance costs for older
changing patterns of living and working (e.g. home rural dwellings, landlords were more inclined to sell up,
working). reducing the numbers available to potential tenants and
further squeezing the affordable housing market.
19
Recent house price decline • valuing the role of in-migrants as an injection of new
energy and ideas into potentially in-ward looking rural
4.19 The region has experienced a fall in prices of nearly 13%
communities
between January 2008 and 2009. District-level data shows
that prices in Redcar & Cleveland have been the most robust, 4.21 This clearly has implications in terms of the availability of
whilst the rural counties of Northumberland and County economic and housing opportunities for those who wish to
Durham have seen average reductions of 11%. The greatest live in rural areas. There are planning implications, although
fall in prices has been experienced in Gateshead, Darlington it is not entirely clear from the consultations whether current
and South Tyneside. planning ‘barriers’ are more perceived than actual.
Conclusion Rural deprivation – another tale of two parts
4.22 As with economic performance, the pattern of deprivation in

The ‘right’ rural demographic mix the rural North East does broadly divide itself into two parts.
4.20 While the Evidence Base and subsequent consultations have First, the path-dependent, entrenched deprivation and
dwelt on specific cohorts of the population – ‘the employed’, worklessness witnessed in the post-industrial and former
‘the young’, ‘the retired’ – it is equally important to consider coalfield areas of County Durham and the Northumberland
what might be a good ‘mix’ of ages to have within coast. Here, deprivation is more similar to patterns seen in
communities, and how this might be influenced. For urban areas of significant employment decline. In contrast,
example: sparser areas are more significantly deprived in terms of their
geographical access to employment and support services.
• accepting and perhaps trying to manage the flight of
Worklessness per se is less of a problem – the value of the
more highly educated young people out of rural areas
work (part time, low wage) is more of an issue.
• considering when and how to encourage previously rural
4.23 Nevertheless, there are significant differences between rural
residents back, preferably while they are still
localities within these two generalised area types. Picking out
economically active
these differences at small geographic levels is part of the
• taking a broader view of the potential value of the
typologies work, and can be found in Section 6.
oldest groups within rural communities – social as well
as economic 4.24 The challenge for policymakers is to create strategies and
programmes that address the different types of deprivation.
20
5 QUALITY OF LIFE AND PROMOTION Furthermore, estimates by the Northumberland National Park
Authority suggest that the Park contributes £100m to
The draw of a high quality environment... tourism in the region.
5.1 Consultees concurred with findings of the Evidence Base on RURAL SNAPSHOT
the high quality of the rural environment, and its importance The economic value of the North East’s landscapes
in the region’s offer to tourists, residents and workers.
Research for One North East in 2004 considered the
5.2 Quality of life is a key element of the Regional Image economic value of the region’s protected landscapes (Durham
Campaign, and the North East’s rural assets are central to the Heritage Coast, Northumberland National Park,
promotion of the region as a good place to visit, live and Northumberland Coast AONB, the North Pennines AONB, and
work. Market research undertaken by MORI for One North the North Yorkshire and Cleveland Heritage Coast).
East in 2004 as part of the development of the Regional
The research suggested that business turnover for firms
Image Campaign demonstrated that ‘countryside’ came
located in this areas was over £700m, supporting some
second for Great Britain (and North East) residents when
14,000 jobs. For about half of these businesses (by turnover
asked about the strengths of the region (see Bibliography).
and employment), the quality of the landscape was
...and the difficulties of quantifying its benefit considered to be either the reason for their location, or had a
positive effect on the business.
5.3 The Evidence Base was not able to quantify the economic
benefits of the rural environment to the region as a whole,
Rural towns are part of the offer
and consultees thought that this would be very difficult to do
in a precise manner. Areas of the highest landscape quality 5.5 As mentioned previously in this report, rural towns are
often support economic activity which takes place adjacent to important retail and tourism draws and destinations. This is
them. As a result such areas are challenged in demonstrating acknowledged through initiatives such as Market Town
their impact because a lot of the infrastructure for the visitor Welcome, a project designed to help the region’s market
economy (hotels, restaurants, etc.) lies beyond their towns develop their distinctiveness and attraction as tourism
boundaries. destinations.
5.4 However, the next Rural Snapshot provides an example of

research which has tried to make these calculations.
21
Rural emissions data – a gap in the evidence 5.9 The economic implications of climate change is also the
subject of a major Economic Modelling study commissioned
5.6 The Evidence Base provided an indication of CO2 emissions
by NERIP at One North East.
at district level. However, it is recognised that this does not
tell the whole story of greenhouse gas emissions in rural 5.10 Some consultees viewed the challenge of climate change as
areas. Agricultural emissions are likely to include significant an opportunity, in terms of its links to the ‘new localism’
volumes of other relevant gases, such as methane and agenda, in this case improving rural competitiveness to
nitrous oxide. According to the North East Carbon Trajectory remove the economic reliance on urban areas (see Futures
Study, agriculture’s emissions of these gases are about 1,000 phase of this research).
times greater than its emissions of CO2. So the picture
painted in the Evidence Base significantly underplays Environmental industries – an economic opportunity
agriculture’s emissions contribution. 5.11 Limited information was available on environmental and
5.7 However, while other data sets do exist for non-CO2 renewables industries in the Evidence Base. Consultees were
greenhouse gas emissions, they are not useable at the lower able to provide a picture of current activity and future
level geographies required for this research. opportunity.
5.12 Decisions on the siting of onshore wind farms in the region

Climate change and its impact on the region
appears to be challenging at present. While a lot of proposed
5.8 Climate change is an increasingly significant driver of developments are still in the planning phase, it is thought
national and regional policy, and is set to become even more that a number have been turned down in West
important in years to come. Defra has recently released Northumberland (apparently an issue related to RAF training
climate change predictions for every region in the country. areas).
Based on their mid-range calculations (i.e. emissions stay at
5.13 Elsewhere in the renewables sector, one consultee thought
around today’s levels), by the 2080s the North East will see:
that there was growing rural commercial interest in anaerobic
• an increase in winter mean temperature of 2.6oC digestion and Renewal Obligation Certificates (a scheme to
• an increase in summer mean temperature of 3.7oC encourage energy suppliers to source more energy from
renewable sources). There is apparently little interest in
• an increase in winter mean rainfall of 14%
biomass crops, but the volumes of wood from the forestry
• an decrease in summer mean rainfall of 17%
sector are a potentially good alternative source of biomass
22
material for energy production.
5.14 Two consultees were keen to see the development of micro-

generation of electricity in the rural region, believing it to
have real potential. But there are apparently problems with
the structure of the national grid which hinder small scale
power generation that can feeds back to the grid.
Conclusion
5.15 The rural environment and its assets are clearly a major
differentiator for the North East, a key reason why people
want to live, work and visit the region. While it is important
to try and assess their economic contribution, their full value
is always likely to be in excess of any number produced from
such research.
5.16 There is clearly potential for exploiting the rural environment

for greater economic gain. The climate change agenda, and
associated growth in renewables, for example, are
considerable opportunities. However, it will be important to
pursue any considerations for economic development in a
way which sustains the environmental assets that are so
important to the region’s identity and draw.
23
6 TYPOLOGIES then collating similar area types together to get down to a
manageable number of typologies. However, it quickly
became clear that factor analysis - a more comprehensive
Rationale
and robust method - was available through the input of Paul
6.1 Typologies are a means of simplifying a complex data picture Cowie, a student at Newcastle University whose PhD on rural
into something more understandable and accessible. Places in-migration is being supported by One North East. The
with similar characteristics are grouped together into one of detailed methodology is explained in more detail within the
several categories. Technical Appendix. In short, factor analysis is a powerful
6.2 One objective of this research has been to create a set of statistical process that can identify correlations and
rural typologies which will enable policymakers to get a rapid relationships between a large number of variables.
grasp of the diversity within the rural North East, the
opportunities that various areas offer and the barriers they Geography
face.
6.5 The objective of this study throughout has been to collate
6.3 It is important that this part of the research is not regarded and understand data at the lowest possible spatial level. The
as a ‘standalone’ element. The sheer variety within the rural typology work has also taken this as its objective, so all data
region means that the typologies should be used as part of within the factor analysis has been sourced at LSOA level. As
the evidence rather than offering a ‘short cut’. Used alone with the Evidence Base, this is a limiting factor as it excludes
they would not provide the full picture of social context or certain data sets which are not available at this level.
economic performance. However, the typologies are a However, the final typologies were contextualised with other
valuable first step to understanding the rural part of the information following the formal analysis stage.
region and its complexity.
6.6 In the Evidence Base, the ONS 2004 classification was used to
determine whether an LSOA was rural or urban. This has
Methodology been used again in the typology, but with the addition of
6.4 The research team and Steering Group approached the some large rural towns.
development of the typologies with an open mind. Initial 6.7 A number of large rural towns are excluded from the ONS
considerations focused on a relatively simple method, using ‘rural’ classification because they have populations greater
just five indicators to categorise 32 possible area types, and than 10,000. Their exclusion in the Evidence Base made
24
methodological sense because of the need to compare the Indicators
rural North East with England and other regions on a like-
6.9 As already noted, data was sourced where it was available at
for-like basis. But the typologies are unique to the region, so
LSOA level (each LSOA contains about 1,500 people). As a
there was scope for customisation of the data, and re-
first step, a broad range of data sets was identified at this
inclusion of the towns. The decision to do this was based on
level. The aim was to identify as many relevant data sets as
the importance these towns have on their rural peripheries as
possible for the analysis, covering factors such as economic
centres of service provision and economic activity.
activity; demographics; business density; commuting; access
6.8 In creating the 2004 classification, a set of Larger Market to services; and housing affordability. The table below shows
Towns (LMTs) was defined by Defra The classification was the main data sets identified and their sources. While the
based on a series of factors, such as size (population of 10- Census is eight years old, it is one of the most detailed
30,000) and range of available services. Of the 207 LMTs in sources available at LSOA level, so it was retained.
England, 13 are in the North East. LSOAs for all of these have
been incorporated into the typologies to get a full picture of Sources of data for the typologies
the rural regions. They are listed in the following table1. Annual Business
Workplace units
Inquiry, 2008
‘Larger Market Towns’ included in the Typologies
Index of Multiple Distance to local services; Access to
Berwick-upon-Tweed Peterlee
Deprivation, 2007 owner occupation; Homelessness
Morpeth Spennymoor
Distance travelled to work;
Ashington Bishop Auckland Employment in agriculture; Car
Cramlington Newton Aycliffe Census, 2001 ownership; Home working; Means of
travel to work; Level 4/5 skills;
Hexham Eaglescliffe
Housing tenure
Consett Guisborough
NERIP Housing affordability
Stanley
Job Seekers Allowance; Incapacity
CLG, 2008
Benefits
A full explanation of this definition is available here

1 ONS, 2006 Working age population
25
Analysis for the rural North East, with each typology being
characterised by its distinctive relationship to the four
6.10 In the first phase of the analysis, the data sets were examined
factors. The following table shows how each typology rated
for evidence of correlation with one another. A number of
against each of the factors, while the next sub-section maps
the indicators showed no signs of correlation, and were
the results and provides a broader narrative for each
excluded from subsequent phases (see Technical Appendix).
typology.
Of the remaining indicators, 13 were selected to ensure the
model delivered the greatest statistical significance. Factor 1: Factor 2: Factor 3: Factor 4:
Remote Prosperity City Business
6.11 Factor analysis then grouped these 13 indicators into four Typology
rural Region activity
factors where strong correlations existed between them:
proximity
• Factor 1 – ‘Remote rural’: agricultural employment is
1 - ++ + +
correlated with remoteness from GP surgeries and
primary schools, and large numbers of home workers. 2 - - - +
This is likely to characterise the more remote areas of
3 - + - =
the rural region
• Factor 2 – ‘Prosperity’: High benefit claimant numbers 4 = -- - -
are negatively correlated with numbers of two car
5 - + + -
households and higher level skills, which helps to define
areas by their relative wealth 6 + = + +
• Factor 3 – ‘City Region proximity’: Short distance
7 ++ + - -
commuting is correlated with high working age
populations and high levels of owner occupation. This Key:
suggests proximity to the major conurbations - / -- Below/well below average
• Factor 4 – ‘Business activity’: this factor contains a = Average
single data set – the number of workplace units – which
+ / ++ Above/well above average
provides an indication of business activity and density
6.12 Subsequent cluster analysis then identified seven typologies
26
Figure 2: Map of North East rural typologies
Results
General observations
6.13 Figure 2 shows the seven typologies mapped to the rural

LSOAs in the region. Overleaf, enhanced maps show in more
detail the higher population areas along Northumberland’s
industrial coast, and in County Durham. LSOAs have broadly
similar populations, but their geographical sizes are
considerably different. This is relevant when looking at the
map where, for example, it may be easy to miss that there
are twice as many LSOAs (and therefore people) in Typology
1 as there are Typology 7. Figure 1 shows the number and
proportion of rural LSOAs within each typology.
Figure 1: Typologies as a proportion of rural LSOAs
Under‐employed,
21, 4%
localised economy
19, 4%
42, 9% Industrial estates &
42, 8% business parks
Retiring communities
100, 20% Economic ‘cold spots’
119, 24%
Hard working,
'aspirational' rural suburbs
Metro rural, 'best of both
153, 31% worlds'
Sparse rural, low value
economy
27
Figure 3: Typology map: Northumberland Industrial Coast Figure 4: Typology map: Central County Durham
28
6.14 In the following sub-sections, a narrative is provided for each Crook, Barnard Castle and Newton Aycliffe. Only one area
of the typologies in turn. Fundamentally, the narrative for has a significant border with one of the conurbations – to the
each typology is based on the outcome of the factor analysis west of Teesside.
together with some added contextual information drawn from
the Evidence Base and consultations. Typology 2 - Industrial estates and business parks
6.18 This is something of an anomalous typology, which

Typology 1- Under-employed, localised economy
demonstrates how the choice of indicators can influence
6.15 This typology has been characterised as ‘under-employed’ analysis, in this case the number of workplace units. The
because, while it has higher than average levels of working typology is characterised by having the highest numbers of
age population, it also has the highest benefit claimant rates workplace units of all the typologies, but below average short
of any typology (JSA and IB). Alongside these high rates of distance travel to work and working age population.
economic inactivity, it also has the highest levels of owner
6.19 This suggests that the typology is identifying out-of-town
occupied housing, and average levels of car ownership,
concentrations of economic activity – business parks and
suggesting that the economic picture is a mixed one.
industrial estates. An analysis of the LSOAs confirms this.
6.16 Employment tends to be relatively localised - it has the For example, the following business parks and estates fall
highest incidence of travel to work of less than 20km. This within Typology 2 areas:
may point to many of those in employment choosing to
• Glendale Business Park, Wooler
remain in the local economy rather than exploiting the
• Foundry and Haugh Lane Industrial Estates in Hexham
opportunities that greater commuting distances might afford.
Below average Level 4+ qualification rates may also suggest a • Team Valley, Gateshead
lower value local employment market. • Peterlee Industrial Estates
6.17 Typology 1 appears to linked to towns. It is found on the • Aycliffe Industrial Estate, north of Newton Aycliffe and
edge of rural towns, such as Alnwick, Amble, Bedlington and the largest industrial estate in County Durham
Cramlington in Northumberland. The LSOA’s in this typology 6.20 These seem to be generic business parks, not specifically
tend to be medium-sized, which would suggest a ‘suburban’ designed to cater for any particular industry sector.
population density. The typology is most common in central
6.21 Below average short distance commuting and working age
and eastern County Durham, around towns such as Peterlee,
population, plus slightly higher than average JSA claimant
29
rates may suggest that these areas of concentrated business clustered in and around major rural settlements and on the
activity may not necessarily be providing significant amounts edges of the conurbations. In Northumberland, they can be
of local employment opportunities. However, as large seen around Berwick, Haltwhistle and Morpeth, and adjacent
business zones with ready access to the major road networks to Newcastle in the Ponteland area. In County Durham, it can
(A1 for Team Valley and Aycliffe, A69 for Hexham), they be found around the edge of Gateshead near Wickham and
should perhaps be viewed as important employment assets Ryton, and south of Bishop Auckland. In Redcar and
for the region. Cleveland, the area around Saltburn also shows a
concentration of this typology.
6.22 Above average skills levels and higher than average long
distance commuting would suggest that a good proportion of 6.26 Although the data does not allow us to state conclusively that
this typology’s residents work in the urban areas. these areas have disproportionately high numbers of retired
people, some of the areas’ geographical characteristics –by
Typology 3 - Retiring communities the sea in Berwick, Amble and Saltburn, within accessible
6.23 This typology is characterised by the lowest proportion of rural ‘suburbs’ – do tend to reinforce this picture.
working age population and below average benefit claims.
Typology 4 – Economic ‘cold spots’
This suggests that the typology has relatively high levels of
retired people. This is borne out in many areas, when they 6.27 Benefit claimant rates are well above average, and these areas
are compared to demographic maps provided in the Evidence have the lowest proportion of higher level skills, car
Base. ownership and long distance travel to work. This indicates a
reliance on a lower value and local economy. However, with
6.24 Levels of car commuting – both above and below 20km – are
the lowest number of workplace units, local employment
lower than average. This may also point to an older, non-
opportunities are likely to be limited.
working population. However, given that a number of these
areas are adjacent to the major conurbations, it may be that 6.28 This typology would appear to pick out some of the most
other transport is being used for commuter journeys. economically deprived areas of the rural region. Comprising
Levels of workplace units are also below average, suggesting 31% of the region’s rural area, this figure matches the
that local employment opportunities are not necessarily proportion of the rural population who live in the 30% most
available (home working is also below average). deprived rural areas according to IMD data.
6.25 This is the second largest typology. Its areas tend to be 6.29 Areas within this typology tend to be small, and therefore
30
more densely populated localities; it is rarely found in the Northumberland coast near Alnwick, Amble and Morpeth, in a
Uplands and northern Northumberland. While some of the corridor to the west and south of Durham City, and around
LSOAs border the major conurbations, they tend to be Guisborough.
concentrated in and around larger rural towns, and in larger
cohesive groups than the other typologies. They are Typology 6 – ‘Metro rural’ (Best of both worlds)
primarily found in the former industrial and coalfields zones 6.32 This typology has the highest rates of long distance
of coastal Northumberland and County Durham, which commuting and car ownership, as well as the highest rates of
suggests a path dependency based on structural industrial high level skills. Significant numbers of the population are
decline and long term benefit reliance. In Northumberland, therefore likely to be high value commuters to the region’s
clusters are found in Blyth, Ashington and Cramlington. In urban centres. Above average proximity to GPs and schools
County Durham they can be found in Chopwell/Rowlands Gill; may suggest that their locational choices may be influenced
in and around Peterlee and east to Trimdon; and in Bishop by family needs.
Auckland and Newton Aycliffe.
6.33 These areas also demonstrate higher than average
Typology 5 - Hard-working, ‘aspirational’ rural suburbs employment in agriculture, and home working,
demonstrating a link to a more agrarian rural environment
6.30 This typology has the highest proportion of working age
and that a proportion of the population (perhaps the ‘locals’)
population, above average skills, owner occupation and car
are engaged in land based industries. The low level of
ownership. Benefits claimants are low. This suggests an
benefit claimants may reflect both the high economic activity
economically active and relatively successful population.
levels among commuters, but also the reduced take-up of
Above average short distance commuting reflects the
benefits often found in sparser rural communities.
proximity of these areas to employment centres, but not
necessarily the major conurbations. Lowest levels of 6.34 While not the most affordable places, it is interesting to note
employment in agriculture reinforce the reliance on towns that areas within this typology do not have particularly poor
and cities for work. Below average access to schools and GPs housing affordability rates. This is especially the case in the
nevertheless demonstrates that they tend to be on the edge, arc around the west of Teesside, and between Stanhope and
rather than the centre of settlements. Durham. The reasons for this are not clear. Housing type
and quality may be factors, for example.
6.31 This typology is aligned to settlements, but is not always
adjacent to them. Clusters are clear along the 6.35 High levels of car ownership and long distance commuting
31
would suggest that road networks are important for this Typology 7 – Sparse Rural, low value economy
typology. This is confirmed by mapping. Areas within this
6.38 This is perhaps the typology which best conforms to people’s
typology stick closely to the major road routes of the region:
view of ‘rurality’, i.e. agrarian and pastoral. It has the highest
north along the A1 in Northumberland, especially from the
levels of agricultural employment and home working among
outskirts of Newcastle as far as Alnwick; West along the A69
all the typologies, which correlates well with the larger and
through Hexham and as far as Haltwhistle; and along the A68
more sparsely populated areas that it covers.
and A66 in County Durham.
6.39 As one might expect from agricultural communities, this
6.36 The geographical size of the LSOAs within this typology are
typology has well below average benefit claimants. Below
large. Only Typology 7 includes larger LSOAs. This confirms
average owner occupation is likely to be a consequence of
a link to agriculture and suggests that settlements are more
the influence of the large rural estates on the property
sparse. For this reason, it is hard to determine what sort of
market rather than necessarily an indicator of lower incomes.
relationships these areas might have to their nearest rural
towns – they cannot be considered ‘suburbs’ of these towns, 6.40 High value commuting is still apparent, despite the more
but they may rely upon the nearby local town for some of remote nature of this typology. This is indicated by above
their service needs. Understanding the relationship between average long distance travel to work, high car ownership and
these areas and local towns is an important consideration for above average skills, although to a slightly lesser extent than
local policy makers. Typology 6. This difference may reflect the larger distances
involved and the more limited housing opportunities. Some
6.37 A small proportion of the areas within this typology are
of the areas in this typology are also hotspots of very poor
adjacent to urban conurbations, especially around Prudhoe to
housing affordability, especially in the Northumberland
the west of Newcastle, and on the western fringe of Teesside.
uplands and north of Alnwick. Low local wages are just as
Again, the geographical size of these LSOAs suggests that
likely to have affected this as the influx of wealthier
these places are relatively sparsely populated despite their
commuters.
proximity to the urban core. These areas do provide ‘the
best of both worlds’ – a sparsely populated and high quality 6.41 Residents in this typology are isolated from services, being
rural environment with all the benefits of urban areas on the the furthest from GPs and schools. For commuters, this may
doorstep. a trade-off between access to services and environmental
quality, or that they do not have the same need for locals
services, being slightly older ‘empty nesters’. For those
32
reliant on the local agricultural economy, this remoteness • Post-industrial/coalfields rural towns on the
may instead bring poor wages and limited access to Northumberland coast and in County Durham have
important services strong concentrations of Typology 4 (Economic cold
spots) at their hearts
6.42 Spatially, this typology characterises the most rural areas of
the region, covering large parts of the Uplands, but also • Typology 6 (Metro Rural, Best of both worlds) tends to
heading right up to Berwick and across to the be remote from towns and conurbations, but sticks
Northumberland coast. Between them, Typology 6 and closely to the major road networks
Typology 7 cover most of the highest quality environmental • Typology 7 (Sparse rural, low value economy) seems
assets in the rural North East. relatively independent of rural towns and major
conurbations
Concluding thoughts • There is some pattern in the fit of the typologies to City
Region geographies. Rural areas within the City Region
6.43 It is worth stressing again that these typologies need to be
core are primarily a mix of Typologies 1 to 5, while the
considered alongside the other elements of this research if
outer City Region contains more of Typologies 6 and 7.
they are to be used and understood properly. But the
This meets the commuting patterns that are central to
research team does instinctively find that the typologies have
understanding the operation of City Regions and their
successfully captured the different parts that go to make up
hinterlands, but it doesn’t really provide any new
the rural region.
insights
Typologies and places • The places between rural towns are a patchwork of
various typologies for which there seems no clear
6.44 The development of the typologies was consciously founded
pattern. What it does demonstrate, however, is that
on a data-led, ‘place blind’ approach. As such, we have not
relative wealth and opportunity can be found close to
tried to create cohesive ‘pictures’ of particular rural towns.
areas of deprivation and need. This reinforces the need
However, the way that the typologies have developed do
to develop policies and programmes that are more
show some patterns related to settlement type:
precisely targeted and which have a sophisticated and
flexible approach to delivery
33
Future uses for the typologies
6.45 The typologies created in this research are ‘snapshots’ in

time. The data that underpins them is fixed and shows no
trends. However, in time it may be possible to update the
underlying data sets with new information.
6.46 Despite their static nature, the typologies could provide a

useful ‘lens’ for programme and policy monitoring and
evaluation. For example, understanding in which typology
areas an initiative’s beneficiaries live may help to understand
if support is being properly targeted. Likewise, early
reference to the typologies in programme development may
help to identify particular areas of rural need or opportunity.
Such creative, practical use of the typologies should be
encouraged.
34
7 REFLECTIONS ON THE SUITABILITY OF DATA • Post-2009 categorisations of Northumberland and
County Durham Unitary Authorities as being uniformly
7.1 With any evidence-based research, the quality of the outputs ‘rural’ were considered even less useful
depends heavily on the quality of the inputs. A significant • LSOA urban/rural classifications were much more
amount of time and effort has gone in to sourcing the most readily understandable by non-rural specialists,
up-to-date, accurate and relevant data to provide the although the absence of the Larger Market Towns was
Evidence Base for the rural North East. However, there are a mentioned by some. The re-inclusion of these towns in
number of limitations with the data available. Some of these the typologies work seemed a sensible way of
were evident from the outset; some became clear during data overcoming this.
analysis; and other issues have since been raised during the
consultation period. Geographical detail
7.2 In this section, we summarise some of the key 7.4 The implication of the above is that data should be sourced
methodological challenges faced with the available data, in at the lowest possible level, as much to promote ease of
the hope that this may help subsequent refinements to data understanding among non-specialists as to ensure the most
collection, categorisation and analysis. Many of the issues detailed picture is provided.
are already well known to statisticians who deal with socio-
7.5 This has inevitable implications for the sourcing of data -
economic data, and indeed many are not unique to rural
much of which is still only available at district level – and
areas.
particularly surveys. LSOAs contain relatively small numbers
(I,500) of residents and data disclosure regulations limit the
Classification of rural areas level of detail that can be accessed for each LSOA, since it is
important that any data is not likely to identify any
7.3 Notwithstanding the efforts of this research project, it is clear
individual. Small area surveys can also struggle with meeting
that the formal definitions of what represents ‘rural’ remain
the required sample sizes for statistical significance. For
difficult for the lay person to grasp. Specifically:
example, the mean 2007 population in the region’s 307 rural
• Definitions based on pre-2009 district boundaries were LSOAs was 1,579; the mean working age population was 953.
widely regarded as too generalised to be of real value, These are small populations from which to conduct a survey.
especially in the more ‘mixed’ urban/rural areas of
7.6 The Annual Business Inquiry (ABI) does manage to produce
County Durham
35
data at LSOA level, although caution has to be taken with NUTS3).
issues of confidentiality due to the small samples involved
and this limits the reliability of data available at LSOA level. Agricultural employment
Whilst the Annual Population Survey (APS) can also provide 7.8 Unlike all other industry sectors, small area agricultural
data at LSOA level again the reliability of this data at such a employment figures cannot be determined through the ABI:
detailed geographic level tends to be weak. Any sample some of the employment data is excluded below local
survey is always less reliable than direct measurement. The authority level, and instead relies on Defra’s Census for on-
APS samples for instance are often too low for reliable farm employment. As a consequence, the Evidence Base is
estimates to be made even at regional level for some forced to use data from the Census, which is a full seven
variables and becomes less reliable as the level of detail – years older than the employment figures for the rest of the
geography, industry, sector or size increases. economy. This is a significant barrier to understanding rural
employment at a detailed level, especially in remoter and
GVA
more agrarian localities. However, we understand that NOMIS
7.7 This issue is discussed comprehensively in Working Paper 1. and Defra are discussing this issue and hope that progress
To summarise, robust GVA data is only available at NUTS3 can be made in the future.
level. For the rural North East, this means Northumberland
and County Durham. Clearly, this is not ideal. County Business activity
Durham’s GVA, for example, will include a contribution from 7.9 The main source for business data in the Evidence Base was
the City of Durham which cannot really be regarded as ‘rural’ the ABI. In some situations, this was not ideal. For example,
in any practical sense. Various efforts have been made to it was used to determine business density and change in
disaggregate GVA to provide a picture at a lower spatial level business stock. However, its use was justifiable because of
by a range of researchers, but they vary in the extent to its ability to provide data at LSOA level.
which they are methodologically defensible. Given the fact
7.10 Other sources are available, for example VAT registrations.
that GVA is of central importance to RDAs in evaluating their
The Inter-Departmental Business Register covers all VAT and
economic impact, this is a substantial gap, perhaps more so
PAYE registered business to give one of the most
in rural areas - arguably, variations in GVA (per head)
comprehensive sources. However, data is only available to
performance may be wider within a county like Durham than
district level ,or MSOA level, although bespoke tabulations
in a conurbation like Tyneside (both of which are classified
36
are available on request from ONS. This data is updated migration estimates using improved NHS data. In any further
annually from HMRC VAT and PAYE records, Companies work we would seek to utilise this data to obtain more
House, Dun & Bradstreet and the ONS business surveys. , accurate migration data.
Data disclosure issues again limit the level of detail that can
be accessed. Emissions
7.15 As discussed elsewhere in this Working Paper, readily

accessible data does not yet allow for the detailed analysis of
7.11 Travel flows and patterns
non-CO2 greenhouse gas emissions, which are a key
7.12 As the most comprehensive source of data, the 2001 Census characteristic of agricultural activity. Information is available
has been used considerably in creating the Evidence Base. from the National Air Emissions Inventory, but not in a form
Where it stands alone as a source is in the field of travel: that allows regional and sub-regional disaggregation.
travel to work flows, distances, types of transport, and home
working. These are particularly important in rural areas to
understand their interactions with urban centres (this is also
a key element in City Region research)
Internal migration
7.13 This is less a problem, and more an example of innovative

practice. The flows of internal migrants within the UK may
seem intuitively difficult to track. However, NHS data
provides a solution. When people move, they re-register with
a GP’s surgery. This provides one way of monitoring
movements but there are a number of issues associated with
it such as the time lag between moving and re registering
which is not compulsory.
7.14 Following the completion of this research it was brought to

our attention that ONS have an ‘Improving Migration &
Population Statistics’ programme. This aims to improve
37
8 RURAL FUTURES NORTH EAST much based on changes and trends led by existing evidence,
whilst the sustainable connectedness driver uses both
existing and more scenario-based thinking to speculate on
Introduction
the future. Drawing on these aspects, the low carbon-new
8.1 The aim of this section is to explore the opportunities and localism theme is considerably more speculative.
threats the rural North East may pose to the ability of North
East England as a whole to flourish by 2030. The paper
Demography
focuses on three contextual and interconnected drivers which
have been identified2 as having the capacity to profoundly 8.3 Current trends indicate that the population of rural
influence change. These consist of: communities in the North East will continue to become older,
(whilst young people continue to leave) reducing the relative
• demography – the implications of an ageing population
size of the working age population. However recent research
for the economic development and sustainability of
indicates that migration movements are more complex, with
rural areas
families with young children and ‘empty nesters’, those
• sustainable connectedness –the role of rural areas both approaching retirement, opting to move into rural areas. The
within and outside the North East’s two city regions, and net effect of this is that the overall population is aging3. Of
implications for the balance and vibrancy of economic course, an ageing population should not necessarily be
development in both rural and urban economies; and construed as a negative economic feature of rural
• low carbon-new localism – the future role for rural communities. Older people continue to consume and invest
economies and communities beyond the reach of although the impact of the current recession on the value of
sustainable transport infrastructure. the pension portfolios of older people in rural areas (as well
as other areas) reinforces the intrinsic link between these
8.2 These drivers provide a context for hypothesising how rural
areas and the wider global and national economies. Similarly
areas may add to, or detract from, the long-term future
prosperity of North East England. The drivers are
interconnected: Demography concerns change that is very
3Mitchell, C (2004) Making Sense of Counterurbanization. Journal of
Rural Studies Vol.20 pp14-34 & State of the Countryside (2008)
2 York Consulting et al. (2009) Rural Policy Support: One NorthEast: Draft Commission for Rural Communities, Cheltenham
Working Paper 1 – the evidence base.
38
in some areas the number of families and young children will Although the public cost of ageing in rural areas may rise in
increase, thus there will be business opportunities to service absolute terms, it may be offset by the opportunities afforded
both ends of the life cycle. Indeed some rural areas have these areas to provide services and create employment to
well above average levels of working age population. satisfy new forms and levels of demand. It may also
encourage new and innovative forms and models of delivery,
8.4 The demographic shift therefore has a geographic, as well as
which may attract new (key) workers and entrepreneurs
an age profile. The majority of people move gradually away
(including social entrepreneurs), such has occurred in Japan
from the urban core to the fringes of urban areas, then
and the Nordic economies6. For instance, in Finland the
progressively on to more rural locations as they pass through
competitive advantage the nation has enjoyed in mobile
the various stages of life.4 There is therefore an opportunity
telecommunications has resulted in new modes of social and
to capitalise on this progression in supporting the economic
health care delivery in remote regions, which has been
growth of the region.
supported by both the private and public sectors.
8.5 Changing demography, and changing numbers of people
8.6 There is much debate over the potential for in-migrants to
moving through different life stages and experiencing
rural areas to drive enterprise and new business formation.
different life events, impacts on service requirements, both
For example, although migrants have been targeted by
public and private, which may represent an economic
development agencies as part of their strategy for promoting
opportunity for those able to supply such services. However,
rural enterprise, the economic contribution of returning
as has occurred in places such as Japan, an increasingly
migrants to rural areas is often questioned. It is often argued
flexible approach to managing and planning for life events
that they move back for quality -of-life reasons, or to
may be required, particularly as the traditional link between
establish traditional businesses, rather than to establish
retirement and dependency erodes, and the diversity of roles
undertaken by older people in rural communities multiplies5.
4 Champion.T, Atkins,D, Coombes, M & Fotherringham,S , 1998 Urban approach, ESRI Discussion Paper Series No.96, Economic and Social
Exodus, CPRE London Research Institute, Cabinet Office, Tokyo, Japan
5 Shimasawa, M. (2004) Population ageing, policy reforms and 6 Hjorth, D. (2008) Nordic Entrepreneurship Research, Entrepreneurship
endogenous growth in Japan: a computable overlapping generations Theory and Practice, Vol. 32, Issue 2, pp. 313-338
39
innovative projects or enterprises.7 regimes will further accentuate the demographic challenge, in
particular the focus on urban areas as the key locations for
8.7 However, recent research into entrepreneurial in-migration
living and working. Historically, the city-region model has
into rural areas of the North East finds that in-migrants often
provided a potential link between urban and rural areas –
start businesses that create higher levels of value added and
with territories surrounding the urban core acting as the zone
employment than those established by those business
for the agricultural production serving the core area.
founded by indigenous residents.8. Part of the reason
Advocates of the 21st Century city-region approach believe it
underlying this is that new in-migrants (rather than returning
offers a means to stimulate economic development and
migrants) tend to start businesses in sectors and industries
alleviate poverty.9 Others are more sceptical, suggesting that
that, on average, have higher levels of productivity and
city-regions have the potential to reinforce uneven
require high rates of innovation in order to remain
development, particularly through the heightening of
competitive. This suggests that changes to the demographic
demographic problems . 10
structure of the rural economy through in-migration will have
the effect of catalysing future growth. It may be the case that 8.9 The potential offered to the wider economy by the “quality of
these businesses create opportunities and markets for place” benefits of more rural areas appear to be increasingly
established businesses owned by residents in less innovative overlooked. City-region frameworks offer little to capitalise
areas of economic activity. Enterprise activity is increasingly on these benefits, despite the growing rhetoric concerning
less age-specific, and the opportunity for rural areas is to sustainability and environmental issues. For example, use of
match lifestyle with the profit motive for the cohort of work-based GVA to measure economic output means that the
individuals with an entrepreneurial orientation. economic contribution made by skilled labour and
environment value arising from rural areas is essentially
8.8 Nevertheless, there is very real threat that current policy
“exported” to the urban core. As others have argued, current
7 Stockdale, A Findlay, A and Short, D. (2000) The repopulation of rural

Scotland: opportunity and threat , Journal of Rural Studies Volume 16,
Issue 2, 243-257 9 Clark, G. (2005) Cities, Regions, and Metropolitan Development
8 Bosworth, G. (2006) Counterurbanisation and Job Creation: Agencies, Local Economy, Vol. 20, No. 4, 404–411
Entrepreneurial In-Migration and Rural Economic Development, Centre 10 Etherington, D. and Jones, M. (2009) 'City-Regions: New Geographies
for Rural Economy Discussion Paper Series No. 4. of Uneven Development and Inequality',Regional Studies,43:2,247- 265
40
policies continue to focus on the urban core of city-regions11. thicker markets for rural products and services.
There appears to be an innate inevitability within these
policies that cities are ‘where it is at’ and this is where the Sustainable Connectedness
infrastructure and support that businesses and workers
8.11 A high level of commuting from rural to urban areas
require will be located, and where regional development
inevitably means that economic activity and wealth creation is
efforts will be primarily focused.
centred within the two city-regions. At a regional level, these
8.10 This appears to be an oversimplification, creating the flows could be interpreted as an opportunity whereby urban
potential for opportunities outside the urban core to be areas establish future agglomeration effects, which
overlooked. For example, data on the distribution of themselves act as a lever for attracting further (international)
‘creative workers’ in the North East indicates that proportion investment and high skill labour. In the case of Newcastle,
of such workers in rural areas is equal to those in urban areas this may allow it to compete with other UK cities, such as
of the region12. This presents a potential future opportunity Leeds, Manchester, and Sheffield in building an innovative
to further integrate the potential commercial development of, and creative urban economy. In the long-term – probably
for instance, arts-related activity and rural tourism, in a even beyond the 2030 – it is possible that this innovation and
manner reminiscent of the way cities have made use of the creativity will ‘spillover’ from urban areas to rural economies,
arts and cultural activities as key tourist levers. The linking of triggering regeneration. This, however, assumes that the
cultural tourism as a feature of rural place-making is still rural economies at this time still have enough capacity to
relatively under-developed not only in the North East but actually capture and capitalise on these spillovers.
across the UK, with there being scope to further develop new
8.12 Alternatively, the threat of growing rural to urban flows is the
markets and provide entrepreneurial opportunities for the
overheating of the urban economy, which in this case spills
younger rural population. And these activities can help foster
over to the rest of the regional economy in the form of
negative externalities, such as excessive strains on transport
infrastructure. The negative externalities often associated
with economic success should not be underestimated – in
11 Midgley, J., Ward, N. and Atterton, J. (2005) City Regions and Rural
Areas in the North East of England, Centre for Rural Economy Research many ways the world’s climate change problems are an
Report, University of Newcastle-upon-Tyne. example of this – and many leading urban economies,
12 Huggins, R. and Clifton, N. (2009) Competitiveness and Creativity, especially those situated within rural surrounds are currently
Centre for International Competitiveness, forthcoming.
41
suffering considerable infrastructural problems, for example, 8.14 Once attracted and anchored, this investment has the
Cambridge in the UK and San Jose (Silicon Valley region) in potential to establish rural clusters of knowledge-based
the United States. A further unwanted by-product of over- activity. In this respect, it is important to note that in the
urbanised development are dual economy effects (London knowledge economy people do not follow jobs, jobs follow
being a prime example), whereby the economy cannot people, i.e. entrepreneurs, spurring new networks, which
realistically sustain the expectations of those attracted to subsequently lead to new firm creation. This ‘cleaner’ form of
cities, resulting in society becoming split into either ‘haves’ investment might then itself promote a higher quality-of-
or ‘have-nots’. Such a scenario indicates how changes in the living in a region through the development of additional
preferences and opportunities available to those currently quality housing, along with the establishment of a range of
living in rural areas can, over the long-term, have a other facilities and amenities. Adequate broadband
significant impact on the wider economy (rural to urban infrastructure will be need to provide essential underpinning
migration patterns in China are also a vivid illustration of for such investment into the North East’s rural areas.
such impacts).
8.15 Such investment should be clearly linked to the overall
8.13 It has been noted many times that the high quality of place economic future desired – by both the public and private
offered by the rural environment in the North East is a sectors - for the region as a whole. Some rural areas of the
significant attractor for mobile investment, and whilst such North East possess a number of the quintessential economic
investment may be located in urban areas, key personnel contradictions of rural localities, in that they would like to
often choose to reside in the rural environment. In the future, seek external investment to boost income, but not at the
mobile investment is likely to become far more weightless expense of lowering the high quality-of-place and living
and knowledge-based than that previously attracted to the enjoyed by its current inhabitants and workers. In many
North East. Examples from others parts of the world - such regions, this conundrum has resulted in policymakers making
as rural economies in Colorado and Ohio in the US, swathes of the least desirable locations available for
Switzerland (e.g. the Thurgau region), and Finland (e.g. Oulu) industrialised development . However, the emergence of the
13
- suggest that rural communities are becoming more

attractive locations for this type of investment, with location
decisions increasingly becoming a complex interplay of
13 Bacot, H. and O’Dell, C. (2006) Establishing Indicators to Evaluate
lifestyle interests among the key protagonists, i.e. the trinity
Brownfield Redevelopment, Economic Development Quarterly, Vol. 20,
of ‘living-working-investing’.
No. 2, 142-161
42
knowledge economy, and its weightless attributes, makes the rural North East rests, therefore, not upon excelling in one
possibility of attracting and locating high value-added component, but upon the ability to engage in all these facets.
investment without environmental disruption a reality for Although such a scenario is necessarily challenging (and may
many rural economies in the North East. This would appear to be even fanciful), it is not isolated from the thinking of
be particularly true for places such as Alnwick, Hexham and others. For instance, the notion of ‘Hadrian’s Valley’14, with
Tynedale, particularly given their relative closeness to the emphasis on linking and developing knowledge-based
urban core. activity in the North East and parts of Scotland, is an example
of a current recommendation promoting the utilisation and
8.16 It is important to assess how investment might be attracted
creation of knowledge (particularly that associated with
into the rural areas. Entry dependency will be related to the
Durham University) across a wider geographical base than the
ability of both the potential investors and the indigenous
traditional urban core of the region.
investment agents to reach an understanding of how positive
benefits can be reaped for both parties. Compared with entry 8.18 A more polycentric approach to the city-region model, in
into urban areas, entry into rural economics may have a particular approaches that seek to further connect the market
highly disruptive effect, due to the immediate ‘dominance’ towns of the rural economy, may offer a more fruitful and
they may exert over existing actors. In particular, a potential sustainable means of regional development than centre-
issue is the possibility of creating a skewed market for highly hinterland models. For instance, Ireland’s National Spatial
skilled labour, as well as other barriers concerning the Strategy aims to achieve a better balance of social, economic
‘movement of knowledge’ both within and outside the rural and physical development through a network of gateways
area and the impact of new development on the natural and hubs that not only covers cities and towns, but also and
environment. rural areas. The Strategy is seeking bring a better spread of
opportunities, better quality of life and better places to live
8.17 In essence, fulfilling such an opportunity commences with
in, recognising the need to support the role of smaller
addressing the needs of the knowledge workers, which
towns, villages and rural areas at the local level. A similar
includes their ability to access knowledge and turn this
approach in the North East may facilitate a more balanced
knowledge into innovation, as well as the quality-of-place
and environment in which they reside. However, the long-
term stock of knowledge is dependent on the quality of
education, to ensure highly skilled new labour market 14 Etzkowitz, H. (2006) The ‘triple helix’ of the Hadrian’s Valley economy,
entrants. Attracting knowledge-based investment into the The Regional Monitor, North East Annual Edition, July/August.
43
form of territorial development within the city-region occurring. 15
framework, whereby both rural and urban assets are

8.20 The urban approach has, nevertheless, become firmly
deployed in tandem. In particular, assets in rural areas with
entrenched in economic development policymaking. As a
the potential to enable innovation and enterprise could,
recent policy report argued ‘rural areas face multiple
through such an approach, achieve greater parity with their
challenges. Their remoteness is often compounded by limited
urban counterparts. However, such an integrated and
skills, industries, markets and political clout. Years of urban-
balanced approach requires a greater understanding of both
focused policy initiatives have implicitly treated them more as
the current and future flows of wealth and value (value chains
dormitories or playgrounds for urban-dwellers rather than as
and supply chains) across the North East as a whole.
areas in their own right. Recent innovation policies have
tended to reinforce this stereotype by their concentration on
Low Carbon – New Localism urban areas and implicit neglect of rural areas.16
8.19 Numerous accounts suggest that urban areas are more 8.21 Until recently, this neglect has been coupled with little
conducive to fostering creativity and innovation than rural understanding that ongoing patterns of metro-centric
areas, with the secondary argument being that these development have a serious negative environmental impact
activities should also result in spillovers effects that improve due to the carbon footprint left by the growing mass of
competitiveness across the North East. Although there is commuters who travel from their rural residence to work in
potentially some merit in this “spillover” argument, it does an urban location. Also, the carbon challenge facing rural
not stack up against the evidence indicating that local communities is not limited to commuting patterns with
economies in rural areas are suffering from declining evidence indicating that, almost paradoxically, rural living
competitiveness. For example, if urban-to-rural economic comes at a premium for the environment. The carbon
spillovers were occurring it is plausible to anticipate two challenge faced, particularly (although clearly not exclusively)
potential outcomes: first, a levelling-out in competitiveness by the most remote rural communities, represents an
differences across the North East; and second, an opportunity to create a more self-contained, self-reliant and
improvement in the region’s overall competitiveness in the
national and global economy – in general, neither of these is
15 Huggins, R. and Izushi, H. (2008) UK Competitiveness Index 2008,

Centre for International Competitiveness: Cardiff.
16 Nesta (2007) Rural Innovation, Exploration 01, p. 2.
44
self-sustained model of development. If such an opportunity 8.23 On the demand side, new localism will only prove effective in
is to be capitalised upon a step-change in the socio- the long-run if it makes competitive sense for the purchasers
economic business culture underlying large tracts of the rural of goods and services. In other words, local suppliers should
communities of North East England will be required. Such be able to match or surpass the quality and cost effectiveness
change must recognise the potential ‘sustainability trap’ of of non-rural suppliers. From a policy perspective, any
remoter rural areas, whereby development can only be intervention encouraging the purchase of inferior or overly
approved if the settlement is considered sustainable in the expensive local supplies will result in a form of protectionism
first place, such as accessibility by public transport. 17
which is likely to further undermine the competitiveness of
rural economies in the North East. This need for innovation
8.22 Whilst new localism, in this case in the form of local
and enterprise means, in the short term at least, it is likely
purchasing, procurement, and supply-chains has a particular
that the region’s more economically vibrant rural
appeal - especially to policymakers in times of economic
communities – such as Alnwick, Morpeth and Hexham – are
crisis – like any markets they can only be as effective as the
better placed to embrace a new local approach to
supply and demand underlying them. At present, clear
consumption and development than the more deprived rural
weaknesses in the entrepreneurial culture of many rural
communities. However there may be different approaches
communities preclude the development of new local forms of
based on social enterprise and capacity building which offer
supply for most goods and services. Currently much
opportunities for a different sort of economic localism in the
entrepreneurship in the more remote rural areas is more
more deprived rural communities.
necessity, than opportunity, driven, for example as farmers
diversify their activities as a result of falling incomes from 8.24 The key issue within these communities would be to ensure
mainstream farming. Coupled with a relative lack of that a significant proportion of higher wage earners are able
innovation and technology utilisation, as indicated by the to work within local communities. The opportunity for rural
limited development of rurally based alternative energy communities is to create a greater level of ‘stickiness’, i.e. a
supplies, this further impedes the potential for new local and greater proclivity to remain economically and socially rooted
low carbon forms of economic development. in a locality than is currently the case. For instance, at
present many parts of the rural North East are more attractive
(anad accessible) to those primarily living off ‘un-earned
income’, such as the retired, rather than income earners. A
17 Consultation Draft PPS4 - Planning for Prosperous Economies; CLG
more age-balanced community would have many advantages
2009.
45
such as the creation of a more dynamic and innovative thinking and acting beyond current economic development
economy, but this should not occur at the expense of the conventions. New processes of what some practitioners term
type of social responsibility that is often a characteristic economic gardening are replacing traditional economic
feature of rural communities, especially the help afforded to development models as the drivers of growth in those
the vulnerable. Greater efforts to establish sustainable forms regions that are successfully sustaining the growth of their
of social enterprise to build and retain this capacity would economies. Economic gardening concerns local or regional
need to be factored into such development choices. economic development strategies that focus on supporting
local entrepreneurs and small businesses.20 The emphasis on
8.25 It will be important that regional investment provides the
gardening, as opposed to development, is an apt metaphor in
rural economy with a level playing field on which to innovate
a rural context recognising that new growth is best served by
and compete, if their contribution to the region’s sustainable
an environment allowing entrepreneurs and businesses to
economic future is to be maximised. Stakeholders must
‘sow-seeds’ that are nurtured over a significant period of
recognise the role of rural businesses as users and
time. The philosophy underlying economic gardening is an
developers of innovation, and ensure that they are made
understanding that while many business development
aware of, and can access, interventions and investment
projects will not reach fruition, there will be a number that
designed to further facilitate and exploit such innovation18.
achieve strong growth. These “bloomers” act as the catalysts
Public and private services underpin a significant proportion
for improved competitiveness through the distribution of new
of the quality of life attraction of rural localities, and failure
seeds ensuring longer-term growth.
to invest appropriately in social innovation may have an
opportunity cost that policymakers are currently 8.27 It is not too difficult to envisage cases whereby rural
overlooking . 19
communities in the North East act as the base for such seed
sowing – an “economic nursery”. This is not to suggest that
8.26 The opportunity presented by new localism, and the potential
rural areas should become urban in the same fashion as the
to reduce the carbon footprint, will only be catalysed by
development of Silicon Valley in the US, but for them to
18 Hindle, R. (2007) Innovation in Small Rural Businesses, in Nesta (ed)

Rural Innovation, pp 61-74. 20 Hamilton-Pennell, C. (2004) CI for small business: The City of
19 Rowe, F. (2007) Innovation in Rural Public Services, in Nesta (ed) Rural Littleton’s economic gardening program, Competitive Intelligence
Innovation, pp 75-87. Magazine, 7(6), 13-15.
46
become locations for relatively high value weightless important role as a centre of food production. Potential for
economic activity set within a high quality of place the increased use of rural land as a source of renewable
environment. As others have argued , rural areas are a
21
energy also raises the prospect of greater choice and
natural location for cultivation of a ‘green knowledge decision-making requirements – ‘food versus fuel’ –
economy’, particularly if coupled with, for instance, the concerning the use of this land. of the relatively limited area
creation of ‘rural university campuses’ that link with local of high quality cultivatable land in the rural North East will
firms to exchange and commercialise knowledge in areas further emphasis the importance of decisions relating to its
such as low-carbon products, renewable energy, future use.
environmentally friendly materials, sustainable construction
techniques, food and bio-sciences, re-cycling and those Concluding Remarks
knowledge-intensive business services supporting
8.29 This paper represents a starting point in seeking to better
sustainable development practices.
understand the contribution of rural areas in the North East
8.28 The benefits of such practices would not be isolated to local to future regional economic competitiveness, and how this
economies within the rural areas and would link to the might be enhanced, as well as how local economies in rural
creation of opportunities across the North East. Opportunities areas can be supported so to become more ‘self-reliant’. It
created by future rural land use extend far beyond the has questioned current policy, especially the “centre-
agricultural economy, and with appropriate planning policy hinterland” city-region approach. However, rather than new
they could be integrated into regional-wide thinking to policy boundaries, what is really required is new strategic
support the development of a low-carbon economy . More 22
thinking within the existing policymaking framework to
generally, rural land use is likely to become an increasingly ensure there is an appropriate balance of focus geared to
important component of regional ecosystems, especially maximising regional competitiveness. This echoes the views
related to activities such as flood mitigation and the of rural stakeholders consulted in a recent study, whose
authors argued that ‘the prevailing trickle down/trickle out
model currently implied by the city-region concept results in
urban preference….The challenge for rural local authorities is
21 Hepworth, M. et al. (2004) The Knowledge Economy in Rural England, A
to either challenge the trickle down model, or to articulate
Report to Defra.
the rural contribution and rural dimension to the city-region
22 Rural Economy and Land Use Programme (2009) Regional rural land
concept. Simply rejecting the city-region model is futile.
use: a time for fresh thinking? Policy and Practice Notes, Note No. 8
47
However, it will be possible to accept the concept but maximisation of short-term economic output - much of
highlight the need for ‘balanced territorial development’ which has occurred in the globe’s large scale urban
within the model’ . 23
economies – carries with it significant risks that can have
catastrophic effects, weakening the resilience of all
8.30 From a policy perspective, the economic future of rural areas
economies. The negative externalities of urban economies
within the wider North East region can be set within a
relating to climate change can be portrayed using a similar
scenario relating to the growth of counter-urbanisation, as
narrative. This suggests that rural areas, such as those in the
negative externalities such congestion, high occupancy costs
North East, have a vital role to play in ensuring economic and
or lack of quality workspace and negative perceptions of the
environmental resilience, countering the relatively high risk
urban environment, coupled with improved physical and
roles of cities and establishing new and aspirational models
virtual connectivity, push some people out of cities in favour
for future economic development. Rural areas are potentially
of more accessible and higher quality of place rural areas.
able to achieve different outcomes to urban-centric
While the ‘short-term’ gains of the ‘urban renaissance’ are
economies. Rural areas have considerable assets, which if
visible will they be sustainable over the long-term? The
realised may provide a different yet equally important
realisation that new technology can help breakdown
proposition than those in other parts of the North East. For
geographic boundaries means that knowledge-based
many years, regional and urban economists have indicated
economic activity offers rural areas an opportunity to become
the extent to which economic growth is related to scale and
less constrained by an over-dependence on traditional
agglomeration effects. However, it should be borne it mind
activities. However, this realisation has not readily permeated
that such growth measures do not capture the negative
the policymaking machinery. Similarly, the opportunity exists
features increasingly associated with such forms of growth.
to create innovation within more traditional areas of
Place-shaping policies with a capacity to create refreshed
economic activity, building on existing examples of good
modes of development provide an opportunity to capitalise
practice in the region, such as those in the forest products
on both the visible and latent assets of the North East’s rural
and recreation sectors.
areas.
8.31 As the current recession has starkly illustrated, the
8.32 The government has suggested that rural policy supporting
business growth has to be realistic and account for the
potential that some of the rural population may trade off
23 Thompson, N. and Ward N. (2005) Rural Areas and Regional
lifestyle benefits against productive employment or business
Competitiveness, Centre for Rural Economy Research Report, p. 28.
48
performance.24 Although there is undoubtedly some truth in • How can the North East best respond to its changing
this analysis, it becomes a self-fulfilling prophecy if there is demographic? How can the region meet the needs of an
little opportunity to access or create such employment and ageing population, and of younger people and families
businesses. There is still too little known about the flows of in ways that spur new models of service delivery and
knowledge, value and wealth both within and out of rural social enterprise? How can progression associated with
areas. There is also a need for a more refined socio- counter–urbanisation (in-migration to rural areas) foster
economic understanding of types of innovative and creative greater levels of business creation and growth?
work undertaken in rural communities and the types of • How can the diverse nature of deprivation in the North
people undertaking it. East’s rural areas best be tackled?
• How can policy help establish the rural North East as a
Policy Implications significant contributor to a low carbon economy and key
8.33 In order to ensure to sustainable economic future for the location for green innovation and green knowledge
rural North East, policymakers need to consider the following based businesses? How could the reforms of the
questions: Common Agricultural Policy post 2013 provide an
opportunity for the North East’s rural areas to capitalise
• How can the North East Regional Strategy facilitate
on the low carbon economy?
greater economic connectivity across the region through
• How could a more regionalised approach to agricultural
a more polycentric approach which integrates key rural
policy support rural businesses to sustain and grow
locations (the ‘rural capitals’), thereby achieving “more
their markets, particularly in response to the renewed
balanced development within the territory”?
policy focus on food security and renewable energy
• How can policy ensure that the benefits of the rural
production and climate change?
North East, in terms of ’living-working-investing’, are
• How can the Regional Strategy help to mobilise rural
effectively harnessed and conveyed to regional, national
assets to meet the future economic and environmental
and international entrepreneurs and investors?
resilience that the North East Region will need to
compete in an increasingly turbulent and volatile global
economy? What is the potential contribution of
24 Defra (2005) Productivity in Rural England, Department for “ecosystem services” to the North East’s economy and
Environment, Food and Rural Affairs, London. places?
49
8.34 These questions should all form part of the wider futures
work that is to be undertaken as part of the region’s
preparation for the development of the 2010 Integrated
Regional Strategy.
50
9 ANNEX A – CONSULTEES Other consultees
• Tom Warburton, Head of Regional Strategy, One North
Steering Group members East
• Adrian Sherwood, RDPE Manager, One North East • Nick Muse, Head of Policy and Strategy, One North East
• Allan Little, Strategic Economic Advisor, One North East • Sue Shaw, Chair, RuCanne
• Anja McCarthy, Strategic Research Specialist Advisor, • David Francis, Northumberland Rural Community
One North East Council
• Chris Maxwell, Regional Strategy Senior Specialist, One • David Stewart, Chair, North East Rural Affairs Forum
North East • Yvonne Greenlay, Government Office North East
• Frances Rowe, Rural Policy and Partnerships Manager, • Richard Baker, Policy and Research Manager, Northern
One North East Way
• Victoria Catesby, Rural Policy and Partnerships Specialist • Lee Pugalis, Head of Strategic Economic Change,
Advisor, One North East Durham County Council
• John Mooney, GIS Specialist Advisor, NERIP • John Banks, Deputy Team Leader, Durham County
• Jon Carling, Head, NERIP Council
• Kirsten Young, RDPE Senior Specialist, One North East • Graham Black, Durham County Council
• Louise Kempton, Business Analyst and Policy Senior • Chris France, Rural Account Manager, Business Link
Specialist, One North East • Rachel Ford, Business Intelligence Manager, Business
• Mark Wilson, Transport Manager, One North East Enterprise NE
• Will Haywood, Economic Analysis Specialist Advisor, One • John Atkinson, Rural Account Manager, Business Link
North East • Terry Carroll, Newcastle University
• Paul Cowie, PhD student, attached to One North East • Dr Jane Atterton, Newcastle University
• Roger Turner, Head of Rural Economies, Commission for
Rural Communities
• Philip Craig, Peer Assist, GHK
51
• Angus Collingwood Cameron, Country Landowners
Association
• Peter Jackson, Chair, Northern Rural Network
• Keith Lamb, ANEC
• Kerry Eaton, Tees Valley Joint Strategy Unit
• Ian Brown, Board Member, One North East
• Shaun Stuart, Chief Executive, The Enterprise Agency
(Wear Valley and Teesdale)
• Tony Williamson, Head of Rural Mainstreaming Policy,
Defra
• Glyn Bateman, Natural England
• Tony Gates, Chief Executive, Northumberland National
Park Authority
• Brendan Callaghan, Regional Director, Forestry
Commission
• Richard Ellison, Regional Director, NFU
• Andy Dean, Head of Regeneration, Northumberland
Council
• Rob Strettle, Regeneration Policy Manager,
Northumberland Council
• Cameron Scott, Regeneration Office, Northumberland
Council
52
10 ANNEX B – BIBLIOGRAPHY • Planning for the Ageing Countryside in Britain and
Japan: City-Regions and the Mobility of Older People
(Centre for Rural Economy and the Global Urban
Evidence Base
Research Unit, 2008)
• Regional productivity – a review of the rural perspective
• North East Regional Image Campaign 2008-2011 (One
(Defra, 2003)
North East, 2008)
• Project Management for the development of The North
• Prosperity and Protection: The Economic Impact of
East Rural Estates Framework (One North East, 2007)
National Parks in the Yorkshire and Humber Region
• State of the Countryside 2008 (Commission for Rural
(Council for National Parks, 2007)
Communities, 2008)
• North East England Greenhouse Gas Emissions Baselines
• Economic performance of rural areas inside and outside
and Trajectories Study (Sustaine, 2009)
of city-regions (Defra, 2006)
• Rural In-migration: a catalyst for economic regeneration
• Productivity in Rural England (Defra, 2005)
(Stockdale and Findlay, 2004)
• Rural Worklessness Research Project (Northumberland
• Identifying Sources on Entrepreneurship and the
Partnership, 2008)
Informal Economy (ONS, 2005)
• Living Working Countryside – The Taylor Review of Rural
• North East Regional Spatial Strategy: city regions, their
Economy and Affordable Housing (CLG, 2008)
spatial definition, and the EiP Panel recommendations
• Digital Britain (DCMS, 2009) (Llewelyn Davies Yeang, 2007)
• Regional Profile – North East (HEFCE, 2007) • City Regions and Rural Areas in the North East of
• Spatial Analysis of Economic Flows in North East England (CRE, 2005)
England (NERIP 2006) • England’s Rural Areas: Steps to release their economic
• The Rural Development Programme for England (Defra, potential (CRC/Rural Advocate, 2008)
2007) • Rural Estate Sustainability – Leading by example (Forum
• Study to Inform the Mainstreaming of Business Support for the Future, 2006)
in the Rural North East (Centre for Rural Economy, 2006) • Market Towns Retail Distinctiveness Report (One North
East, 2006)
53
• Counter-urbanisation and Job Creation: Entrepreneurial • Stockdale, A Findlay, A and Short, D. (2000) The
In-Migration and Rural Economic Development (Centre repopulation of rural Scotland: opportunity and threat,
for Rural Economy, 2006) Journal of Rural Studies Volume 16, Issue 2, 243-257
• Mind the Gap: Digital England – a rural perspective • Bosworth, G. (2006) Counter-urbanisation and Job
(Commission for Rural Communities, 2009) Creation: Entrepreneurial In-Migration and Rural
• Northumberland Upwards – Local Development Strategy Economic Development, Centre for Rural Economy
2008-2013 (Northumberland Uplands Local Action Discussion Paper Series No. 4
Group, 2008) • Clark, G. (2005) Cities, Regions, and Metropolitan
• Fighting Brands Research Project (One Northeast, 2004) Development Agencies, Local Economy, Vol. 20, No. 4,
404–411
• The Economic Value of Protected Landscapes in North
East (SQW, 2004) • Etherington, D. and Jones, M. (2009) 'City-Regions: New
Geographies of Uneven Development and Inequality',
Futures Paper Regional Studies,43:2,247- 265

• Midgley, J., Ward, N. and Atterton, J. (2005) City Regions
• Mitchell, C (2004) Making Sense of Counterurbanization.
and Rural Areas in the North East of England, Centre for
Journal of Rural Studies Vol.20 pp14-34 & State of the
Rural Economy Research Report, University of
Countryside (2008) Commission for Rural Communities,
Newcastle-upon-Tyne
Cheltenham
• Huggins, R. and Clifton, N. (2009) Competitiveness and
• Champion.T, Atkins,D, Coombes, M & Fotherringham,S ,
Creativity, Centre for International Competitiveness,
1998 Urban Exodus, CPRE London
forthcoming
• Shimasawa, M. (2004) Population ageing, policy reforms
• Bacot, H. and O’Dell, C. (2006) Establishing Indicators to
and endogenous growth in Japan: a computable
Evaluate Brownfield Redevelopment, Economic
overlapping generations approach, ESRI Discussion
Development Quarterly, Vol. 20, No. 2, 142-161
Paper Series No.96, Economic and Social Research
Institute, Cabinet Office, Tokyo, Japan • Etzkowitz, H. (2006) The ‘triple helix’ of the Hadrian’s
Valley economy, The Regional Monitor, North East
• Hjorth, D. (2008) Nordic Entrepreneurship Research,
Annual Edition, July/August
Entrepreneurship Theory and Practice, Vol. 32, Issue 2,
pp. 313-338
54
• Huggins, R. and Izushi, H. (2008) UK Competitiveness
Index 2008, Centre for International Competitiveness:
Cardiff
• Consultation Draft PPS4 - Planning for Prosperous
Economies; CLG 2009
• Hindle, R. (2007) Innovation in Small Rural Businesses,
in Nesta (ed) Rural Innovation, pp 61-74
• Rowe, F. (2007) Innovation in Rural Public Services, in
Nesta (ed) Rural Innovation, pp 75-87
• Hamilton-Pennell, C. (2004) CI for small business: The
City of Littleton’s economic gardening program,
Competitive Intelligence Magazine, 7(6), 13-15.
• Hepworth, M. et al. (2004) The Knowledge Economy in
Rural England, A Report to Defra.
• Rural Economy and Land Use Programme (2009)
Regional rural land use: a time for fresh thinking? Policy
and Practice Notes, Note No. 8
• Thompson, N. and Ward N. (2005) Rural Areas and
Regional Competitiveness, Centre for Rural Economy
Research Report, p. 28
• Defra (2005) Productivity in Rural England, Department
for Environment, Food and Rural Affairs, London.
55
11 TECHNICAL APPENDIX 1 - PROVIDING AN • If an indicator at MSOA / District (or other higher order
geography – e.g. Census ward) is to be used, then the
EVIDENCE BASE FOR THE UPLAND AREAS
proportion of that higher area's population (determined
by totalling LSOA populations) that is in upland areas
Geography can be used to indicate how "upland-like" it is.
For the purpose of CRC's 2009 inquiry into the future for These techniques will provide a workable set of geographies
England’s upland communities, the upland areas are defined for reporting on Upland areas. When using these
as corresponding to the Severely Disadvantaged Areas shown geographies for analysis the following points should be
in Figure 1 (see final page). The SDA geography is not borne in mind:
constrained to administrative boundaries, and as such is not
• The average population size of a Lower Layer Super
a perfect match with any of the geographies commonly used
Output Area is 1,500. An LSOA with the majority of its
to distribute data. A method therefore needs to be found to
population inside the SDA boundary could still have
designate elements of these geographies as "upland".
substantial numbers of residents located outside the
The Local Authority and Middle Layer Super Output Area SDA.
geographies cover large areas and are difficult to match to
• As the size of the reporting geography used increases,
the SDA geography. It is therefore proposed that Lower
the reliability and "meaningfulness" of its designation as
Layer Super Output Areas are utilised as the building blocks
Upland will decrease.
of a statistical "Upland". Two methods of matching each
• The use of the above geographical matching techniques
individual LSOA to the SDA geography can be used.
is best suited when statistics concerned with the
Examine the location of each LSOA's population weighted population are to the fore. It is quite possible that an
centroid (these are shown as dots in Figure 1) and allocate LSOA with the majority of its population inside an SDA
this LSOA to the Uplands if the centroid is inside an SDA. would have the majority of its businesses outside that
• Determine (using postcode or address list datasets) the area.
proportion of each LSOA's residential address that fall
inside SDAs. If this is above 50% then that LSOA should Indicators
be allocated to the Uplands.
The following is not by any means exhaustive, but instead
lists some of the appropriate indicators available at LSOA
56
level and above. morphology classes that would help to identify how the
uplands (as a group) compare with various settlement types.
The indices of multiple deprivation are a good starting point.
In addition to the main Index, the seven Domains (Income,
Employment, Health, Education, Barriers and Living
Environment) and the six Sub-Domains that make up the
Indices themselves, the underlying indicators are also
available for download.
The DfT 2005 Core Accessibility Indicators provide a number

of measures of accessibility by public transport and walking
to seven service types: primary schools, secondary schools,
further education, GPs, hospitals, food shops and
employment.
ONS recently published 2001 Census based commuting flows

at LSOA level. Although this data is now somewhat dated, it
could be used to provide an indication of the degree to which
(parts of) the Uplands serve a dormitory function.
Data on businesses is available via the Inter-Departmental

Business Register. The lowest geographic level at which this
is available is, however, MSOA. The Annual Business Inquiry
provides some data at LSOA level, but is subject to stringent
confidentiality controls.
Comparators
Some thought needs to be given to how data relating to the
uplands is to be presented. At an LSOA level, the 2004
Urban / Rural Definition provides a set of settlement
57
Figure 1: Disadvantaged and Severely
Disadvantaged areas in the context of Administrative
and Statistical geographies
58
12 TECHNICAL APPENDIX 2 - METHODOLOGY FOR for example the distance traveled to work and housing
tenure. To simplify the results the travel to work was
MULTIVARIATE ANALYSIS
collapsed into two variables; 20km and over and; less than
Multivariate analysis was developed as a tool in consumer 20km. Similarly with housing tenure, rented from Council
and market research. The analysis is a method of reducing a and social rented were combined.
large amount of data down into manageable and From the list of variable supplied the correlation matrix was
standardized factors which can then be used for further used to exclude those variables which did not demonstrate
analysis. It is, therefore, a two stage process. The first stage any correlation with the other variables. The following
involves the selection of a suitable set of variables which are variables were therefore discarded:
then reduced into a smaller number of factors.
• Change in workplace units
The second stage of the process involves giving each case (in • Housing affordability
this study each case represents a Lower Super Output Area
• Social Housing Tenure
(LSOA) with the rural North East) a factor score. The factor
• Change in JSA claimants
scores are then subject to cluster analysis to link LSOAs with
similar characteristics. • Change in IB Claimants
• Total population change
Whilst the methodology is mainly used in marketing and
consumer research it has been used in the field of rural The remaining variables were then tested in a number of
policy and development, i.e. Soares et al (2003)25. combinations to establish the most effective set. The
following variables were selected to give the best possible
Stage One model:
• No workplace units
The list of variables contained a number of similar measures • Prop employed in agriculture
• Two or more cars per household
• Travel to work 20km or more
25
Soares, J., Marques, M. & Monteiro, C. (2003) A multivariate methodology to
uncover regional disparities: A contribution to improve European Union and • Travel to work less than 20km
government decisions. European Journal of Operational Research Vol. 145 pp 121‐135 • Home workers
59
• Skills level 4/5 Looking at the commonalities for each of the variables (h2)
• Owner occupiers there are no weak commonalities and three reasonable
commonalities. The remaining commonalities are all strong
• JSA claimants
(see table 3 below).
• Distance to primary school
The table below sets out the factor loadings for the four factors along
• Distance to GP with an interpretation of the factor (for full rotated matrix see table 2
• Working age pop below).
• IB claimants Factor and variables Loading

Factor 1
The final correlation matrix is shown at the end of this Percentage employment in agriculture 0.910
appendix. Distance to GP 0.815
Distance to Primary School 0.802
Home Workers 0.790
Strength of model Rurality/Peripherality
The Keiser-Meyer-Olkin statistic for the chosen set of
Factor 2
variables was a very respectable 0.781 which when rounded
JSA Claimants ‐0.892
up gives 0.8. On the Kaiser scale the result is ‘meritorious’. IB Claimants ‐0.872
In addition the Bartlett test of sphericity with a figure Skills Level 4/5 0.740
4993.15 and an associated probability of P<0.01 seem to Two or more cars per household 0.685
Wealth
suggest the data is suitable for factor analysis (see table 1

below). Factor 3
Travel to work less than 20km 0.844
Factors Working age population 0.803
Owner occupation 0.693
The analysis of the variables gives a four factor solution. Employment/[urban fringe?]
Using four factors in place of the 13 variables results in a
total variance explained value of 78.78%. This means Factor 4
No of workplace units 0.849
approximately 21% of the detail is being lost through the use
Business activity
of the four factors.

60
Factor 1 has employment in agriculture as the strongest clustering algorithm. For this analysis the Euclidean distance
element and contains two geographical measures. This would measure was used along with the Ward method as the
suggest the factor represents a rural aspect of the data. algorithm. Table 4 shows the agglomeration process. There
are large increases in the nesting distance between 8 & 7 and
Factor 2 shows JSA and IB claimants negatively correlated
7 & 6 clusters. This suggests there could be solutions using
with skills level and two car households. High skills and
both 7 & 8 clusters.
higher car ownership mirrored with low JSA and IB Claimants
would suggest a wealth effect.
Step Two
Factor 3 has high levels of correlation between short
The second step in the cluster analysis is to run a k-means
commuting, high working age populations and high levels of
cluster analysis specifying the number of clusters to be used.
owner occupation.
A k-means cluster analysis was carried out using both 7 & 8
Factor 4 has only one element, number of workplace units. clusters. The 8 cluster solution had a number of clusters
This is interesting as it would appear the level of business contained very few (<5% of the total number of LSOAs) cases.
activity is independent of the other socioeconomic variables. The 7 cluster analysis had a much more balanced distribution
of cases, see table 5. An ANOVA analysis of the clusters also
Stage two showed the 8 cluster solution did have some correlation
between the clusters whereas the 7 cluster solution did not
Using the four factors, factor scores were given to each
(with 7 clusters all p-values <0.01) The k-means cluster
LSAO. The four factor scores for each variable were then
analysis then gave cluster scores for each case.
subjected to cluster analysis. Cluster analysis involves to
steps. The first step established the optimal number of This allowed a geographical representation of the data and
clusters. Once the number of clusters is know the analysis is further analysis of the initial data sets differentiated by their
run using the cluster number as a starting point to assign cluster group membership. The average for each initial
cluster membership scores for each of the LSOAs. Once the variable for each cluster was compared to the overall average
cluster scores are known for each LSOA the data can then be for the data as a whole (see table 7). This allowed the
represented geographically. characteristics of each cluster to be determined.
Step One
The first step involves selecting a distance measure and a
61
Tables Part 1
Results of Factor Analysis
Table 1 KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy. .781
Bartlett's Test of Approx. Chi-Square 4993.150

Sphericity df 78
Sig. .000
Table 2 Rotated Component Matrix(a)

Component
h2
1 2 3 4
No workplace units .109 .015 -.064 .849 0.737
Prop employed in
agriculture .910 .096 -.165 .120
0.879
Two or more cars
per household .384 .685 .407 .331
0.892
Travel to work 20km
or more .485 .378 .113 .489
0.630
Travel to work less
than 20km -.305 .121 .844 .089
0.828
Home workers .790 .334 .076 .379 0.885
Skills level 4/5 .202 .740 .223 .449 0.840
Owner occupiers -.124 .475 .693 .345 0.840
JSA claimants -.157 -.892 .041 .056 0.825
Distance to primary
school .802 .185 -.030 .044
0.680
Distance to GP .815 .089 -.037 -.020 0.674
Working age pop .162 -.107 .803 -.243 0.742
IB claimants -.168 -.872 -.013 -.008 0.789
Eigenvalue 5.237 2.643 1.304 1.058

% of Variance 40.281 20.328 10.032 8.136
Cumulative % 40.281 60.609 70.640 78.776
62
Table 3 Communalities
Initial Extraction
No workplace units 1.000 .737
Prop employed in
agriculture 1.000 .878
Two or more cars
per household 1.000 .892
Travel to work 20km
or more 1.000 .630
Travel to work less
than 20km 1.000 .828
Home workers 1.000 .885
Skills level 4/5 1.000 .839
Owner occupiers 1.000 .841
JSA claimants 1.000 .826
Distance to primary
school 1.000 .680
Distance to GP 1.000 .673
Working age pop 1.000 .743
IB claimants 1.000 .789
Extraction Method: Principal Component Analysis.
63
Tables Part 2
Results of Cluster Analysis
Table 4 Agglomeration Table extract
No. of
clusters Distance Diff Dist
10 605.76 38.054
9 643.814 38.835
8 682.649 46.355
7 729.004 84.882
6 813.886 137.57
5 951.456 181.502
4 1132.958 214.054
3 1347.012 289.606
2 1636.618 343.382
1 1980
64
Table 5 Number of Cases in each Cluster
Cluster 1 42.000
2 19.000
3 119.000
4 153.000
5 100.000
6 42.000
7 21.000
Valid 496.000
Missing .000
Table 6 Final Cluster Centres
Cluster
1 2 3 4 5 6 7
REGR factor score
-.11993 -.55059 -.49384 -.17323 -.16527 .91762 3.75029
1 for analysis 1
REGR factor score
-1.10703 -.46067 .73364 -.83365 .53993 .88483 .20653
2 for analysis 1
REGR factor score
1.25609 -.88826 -.74865 -.33097 1.14152 .04681 -.58425
3 for analysis 1
REGR factor score
.96104 2.92758 -.12836 -.45365 -.50249 1.03949 -.22447
4 for analysis 1
65
Table 7 Cluster characteristics
Emp Home
WPU Agri 2+cars 20+km <20km working Skills JSA IB School GP
1 71.33 1.69% 171.45 109.95 612.60 63.19 168.33 52.02 126.31 0.8071 1.8714
2 203.32 1.77% 161.53 129.16 431.37 70.21 230 33.68 78.42 0.9632 1.4105
3 40.8 1.60% 171.55 86.55 427.48 54.82 196.95 19.12 53.36 0.8958 1.6958
4 25.67 1.28% 101.27 58.59 416.14 38.27 85.31 43.99 119.93 0.8706 1.7758
5 31.52 0.94% 227.92 97.00 593.36 58.76 219.67 20.6 54.35 1.02 2.075
6 74.9 6.38% 309.31 192.00 444.05 132.38 343.26 16.67 46.55 1.8095 3.881
7 67 18.20% 265.86 186.86 294.71 184.05 247.24 13.1 35.95 3.8048 9.6143
Ave 47.07 2.49% 176.5 96.82 469.03 63.85 180.45 29.97 79.92 1.1087 2.3212
Working age Owner

pop Occupier
1 63.57% 1028.71
2 57.44% 766.47
3 57.06% 817.08
4 60.29% 642.14
5 65.50% 1016.16
6 59.64% 995.21
7 61.07% 658.38
Ave 60.71% 827.6
66
13 TECHINCAL APPENDIX 3 – IMPLICATIONS OF reporting and analysing the distribution of businesses when
using LSOAs. Similar issues will be encountered when using
USING LSOA GEOGRAPHY FOR ANALYSIS OF
COA or MSOA geography. These illustrations are provided as
BUSINESS GEOGRAPHY "cautionary tales" rather than as an exhaustive guide to
problems when using LSOA with business data.
Background Figures 1 and 3 are show the geographical context of LSOA
Since the 2001 Census a set of hierarchical small area boundaries (highlighted in pink) and the location of
statistical geographies have been developed for England and postcodes dominated by residential and non-residential
Wales. In ascending order of size, these are: addresses (shown in green and red, respectively). Non
residential addresses can be used as a proxy for business
• Census Output Areas (COA – often referred to as Output
locations. Figures 2 and 4 show (by shading and, in some
Areas / OA)
cases, figures) the total number of local business units
• Lower Layer Super Output Areas (LSOA)
reported for each LSOA in the Inter Departmental Business
• Middle Layer Super Output Areas (MSOA) Register. The IDBR is an ONS dataset that provides a
COA geography was produced using a computer algorithm comprehensive count of businesses for a number of
that took as its inputs the distribution of residential postal statistical geographies.
addresses, the boundaries of electoral Wards and Parishes
(circa 2003) and selected data from the Census. Example 1 – Gateshead outskirts
LSOA geography was constructed by grouping COAs, and a The central feature of Figures 1 and 2 is a single LSOA
similar process was followed to build MSOA out of LSOAs. (E01008226 / Gateshead 025D) that is largely rural in terms
All three have been built up with regard to the geography of of the bulk of its land use and the location of its population.
residential population, and are "blind" to other features of However, by an accident of COA / LSOA geography, its
the landscape, such as the presence of businesses. north-eastern corner falls within a large urban area – the
southern end of the Team Valley industrial estate. As Figure
Impact of LSOA geography on business counts 1 illustrates, the postcodes in this area are almost entirely
dominated by non-residential addresses.
The four maps at the end of this section illustrate two
problematic scenarios that can be encountered when These features of the LSOA have an impact on the
67
distribution of businesses shown in Figure 2. The area is the concentration of businesses that exist there.
reported to contain more than 200 business premises (more
than 3 times those of its rural neighbours) despite being Implications for economic typologies
composed (from a population distribution perspective) of a
It is hard to be precise about the impact of the (essentially
single village and a series of scattered farms and hamlets.
random) intersection of business and statistical geographies
The reported figures are not, strictly speaking, incorrect. on the economic typologies developed as part of this project.
They are, however, misleading when used in conjunction with In Example 1, the number of workplaces in a single LSOA is
the area's status in the 2004 Urban / Rural Definition. The boosted; in Example 2, a number of LSOA share a single
LSOA is counted as a rural area on the basis of its population concentration of workplaces. Typology 2 (Industrial Estates
distribution. The bulk of its businesses are, in contrast, and Business Parks) is largely defined by high workplace
located within a substantial urban area. Because of this, counts. Different LSOA boundaries might (on the one hand)
Gateshead 025D is likely to appear as an anomaly when have eliminated this group, or (on the other) have boosted its
looking at business locations in rural areas. membership.
When using the typologies, Typology 2 LSOAs should be

Example 2 – Alnwick Town Centre
checked individually to determine how relevant they are as
The town centre of Alnwick is visible in Figure 3 as a group rural workplaces. Where adjacent LSOA are members of
of red symbols just north-west of the centre of the map. Typology 1,2 or 6 (all having above average workplace
This concentration lies at the intersection of three LSOA and counts) the possibility that a single employment centre is
is, as a result, "diluted" in the IDBR counts (Figure 4). The being detected should be borne in mind.
postcode data suggests that two-thirds of the 300
businesses in these three LSOA lie within 500m of the point
where their boundaries intersect (the grid squares visible on
Figures 1 & 3 are 1000m across), but none of the LSOAs in
the area contain more than 150 businesses.
Once again, the business counts given are not incorrect.

Alnwick's entire centre is represented in the IDBR data. The
problem is that an analysis of individual LSOA will not detect
68
13.2
Figure 5 Figure 6
69
Figure 7
Figure 8
70
71

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Rural Policy Support

One North East

2 BUSINESS AND ECONOMY ......................................................................................................................................................... 3

3 EMPLOYMENT AND SKILLS ...................................................................................................................................................... 13

4 SOCIAL EXCLUSION AND ACCESS ............................................................................................................................................ 16

5 QUALITY OF LIFE AND PROMOTION ........................................................................................................................................ 21

7 REFLECTIONS ON THE SUITABILITY OF DATA........................................................................................................................... 35

8 RURAL FUTURES NORTH EAST ................................................................................................................................................ 38

12 TECHNICAL APPENDIX 2 - METHODOLOGY FOR MULTIVARIATE ANALYSIS................................................................................ 59

1.5 Sections 2 to 5 of this working paper reflect on the Evidence

1.9 This report also contains three technical appendices:

• The first, written by NERIP, explains the issues around

• The second, written by Paul Cowie at the University of

• The third, written by NERIP, highlights a particular ‘health

Limited opportunities for food supply chain development

supermarkets. In June 2009 the national milk co-operative, Dairy Farmers of

region has a strong arable sector. This tends to be linked to closed.

2.33 Instead of seeing this as a ‘loss’ to the rural economy, the

The rural periphery

2.46 These spatial/geographic differentials within the rural North

Reviewing rural enterprise

2.47 Consultee’ views supported the findings of wider literature

3.12 While consultees had mixed views of whether the issue of

Conclusion Rural deprivation – another tale of two parts

4.22 As with economic performance, the pattern of deprivation in

5.4 However, the next Rural Snapshot provides an example of

5.12 Decisions on the siting of onshore wind farms in the region

5.14 Two consultees were keen to see the development of micro-

5.16 There is clearly potential for exploiting the rural environment

A full explanation of this definition is available here

6.12 Subsequent cluster analysis then identified seven typologies

6.13 Figure 2 shows the seven typologies mapped to the rural

Figure 1: Typologies as a proportion of rural LSOAs

6.18 This is something of an anomalous typology, which

6.45 The typologies created in this research are ‘snapshots’ in

6.46 Despite their static nature, the typologies could provide a

7.15 As discussed elsewhere in this Working Paper, readily

7.13 This is less a problem, and more an example of innovative

7.14 Following the completion of this research it was brought to

7 Stockdale, A Findlay, A and Short, D. (2000) The repopulation of rural

- suggest that rural communities are becoming more

framework, whereby both rural and urban assets are

15 Huggins, R. and Izushi, H. (2008) UK Competitiveness Index 2008,

18 Hindle, R. (2007) Innovation in Small Rural Businesses, in Nesta (ed)

Futures Paper Regional Studies,43:2,247- 265

The DfT 2005 Core Accessibility Indicators provide a number

ONS recently published 2001 Census based commuting flows

Data on businesses is available via the Inter-Departmental

• IB claimants Factor and variables Loading

The first step involves selecting a distance measure and a

Bartlett's Test of Approx. Chi-Square 4993.150

Table 2 Rotated Component Matrix(a)

Eigenvalue 5.237 2.643 1.304 1.058

Table 6 Final Cluster Centres

Working age Owner

When using the typologies, Typology 2 LSOAs should be

Once again, the business counts given are not incorrect.

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