Rural businesses struggle with local infrastructure, transport and skills

Rural businesses are struggling to contend with unreliable public transport and local skills shortages, a report has warned.

According to a survey of more than 900 SMEs from the British Chambers of Commerce (BCC), 27 per cent expect their turnover to decrease over the next year, while only 30 per cent plan to increase investment in technology and R&D

Almost two in three (64 per cent) believe they don’t have access to sufficient skilled labour in their local area while 58 per cent feel let down by their local transport services.

The BCC said these factors are “entrenching” a rural-urban divide among UK SMEs.

When assessing the suitability of local infrastructure, the rural-urban divide was particularly notable in public transport. Well over half (58 per cent) of SMEs in rural areas do not believe their area has reliable and well-connected trains, compared with just 39 per cent in urban areas.

Rail network deficiencies are also impacting SMEs based in business, retail or industrial parks, half (51 per cent) of which were not satisfied with this provision.

This rose further still when it came to buses and trams – over three-quarters (79 per cent) in rural or countryside areas do not think they have access to reliable buses and trams, compared to 42 per cent in towns, villages and high streets.

There is also a regional disparity evident; SMEs in the North of England (52 per cent) and the Midlands (51 per cent) disagreed that they had access to reliable and well-connected trains, compared with only 36 per cent of SMEs in the South.

The rural-urban divide is also evident when it comes to connectivity. While three-quarters (75 per cent) of SMEs overall agree their area has reliable broadband, this rises to 82 per cent in urban areas and falls to around half (56 per cent) in rural areas.

The Public Accounts Committee has previously warned the government that rural areas that cannot access superfast internet speeds will be “left even further behind” and urged it to ramp up its broadband plans.

Firms also reported a high level of dissatisfaction with their local labour markets, with almost two in three (64 per cent) SMEs not believing their local area has high availability of appropriately skilled labour.

Alex Veitch, director of policy at the BCC, said: “Our research highlights the rural-urban divide that continues to exist between firms across the UK, with rural businesses generally reporting higher levels of dissatisfaction with the quality and availability of local resources.

“High-quality public infrastructure and access to a skilled labour force are both key to the success of a business, in particular SMEs, and today’s findings indicate that rural businesses are at a significant disadvantage.

“Government must urgently prioritise the development of public infrastructure. Such investment will not only enable local and small businesses to adapt and thrive, it will also create jobs and inject money into local economies across the UK.”

Shadow secretary of state for environment, food and rural affairs Jim McMahon said: “The past 13 years of Tory rule have weakened the foundations of rural communities, with unaffordable housing meaning young people have to get out to get on, funding for transport cut, GPs and dentists stretched to breaking point, and community hubs such as village shops, post offices and pubs closing.

“It is only the Labour Party that has the answers to the challenges facing so many people across the country. Only Labour has the economic, social and political answers that our rural and coastal communities have been asking for.”

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