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Infrastructure and devolution key to rural productivity, says Chancellor

Words: Laura Edgar

Chancellor George Osborne and environment secretary Elizabeth Truss have today published a productivity plan to boost the economy of rural parts of England.

Towards a one nation economy: A 10-point plan for boosting productivity in rural areas (PDF) sets out measures that, the government says, will boost the rural economy by investing in infrastructure, improving rural transport connections and simplifying planning laws for rural businesses and communities.

The plan also includes amending planning rules to allow starter homes to be built on rural exception sites for the first time. Local areas will then be able to allocate more sites for starter homes specifically for people who live in the area, have existing family there or an employment connection to the area.

The National Planning Policy Framework says rural exception sites “are small sites used for affordable housing in perpetuity where sites would not normally be used for housing”.

Joe Kilroy, policy officer at the Royal Town Planning Institute, said: "The RTPI supports place making not isolated house building, so our concern with the first-time buyers initiative centres on the fact that the 20 per cent discount is paid for by a relaxation of planning obligations. Developments, whether for first time buyers or not, still place burdens on infrastructure. Not everyone works from home or in their village of residence, so this could be a recipe for yet more car traffic on rural roads.

“Our work on housing has provided ways of addressing the problem in a comprehensive way, and we continue to press for more strategic and imaginative approaches to the housing crisis. In terms of office space in rural areas, in the current context simply making more room for business in rural premises might be fruitless if the landowners simply then convert them to housing under Permitted Development measures.”

Osborne said the British economy has been reliant on businesses based in towns and cities for “too long”.

“We want to create a One Nation economy that taps into the potential of all parts of our country.

“That means setting the right conditions for rural communities and businesses to thrive, investing in education and skills, improving rural infrastructure, and allowing rural villages to thrive and grow.”

Truss added that the government wanted to make it as easy to run a business from Cornwall as it is in Camden.

“It’s not just about transport and technology. Our plan will help us create thriving towns and villages where generations of families can open and expand their businesses, buy a home and educate their children at first class schools,” she said.

Associate director at Nexus Planning, Dominick Veasey, said the chancellor is “absolutely correct that the lack of housing in rural areas is a scandal”.

However, he continued, the rural affordability crisis won’t be solved without “serious action” by rural authorities to “recognise the true extent of the affordability crisis” and then to “proactively” address this in local plans.

Veasey said the greatest challenge facing Osborne is “getting many rural communities to accept that new homes and development are needed”.

“Experience shows that this is likely to be a difficult nut to crack,” he concluded.