Rural Scotland Data Dashboard: Overview

3. Challenges

• Relative poverty has increased in rural Scotland over the last decade, but remains slightly lower than urban areas.
• People in rural areas, particularly remote rural and island communities, face higher costs of living.
• From October to December 2023 it is estimated that almost half (47%) of island households will be in fuel poverty.
• Satisfaction with public services is lower in rural areas than urban areas of Scotland.
• There are well-known challenges with childcare provision in rural Scotland. Parents and carers in rural areas are less likely to use all of their 1,140 funded hours, and more likely to have experienced difficulties affording childcare.
• Access to affordable and suitable housing is a long-standing rural issue and house prices have risen across rural Scotland since 2019, particularly in accessible rural areas.
• Almost all homes in Scotland can get some broadband access, however the speed and quality is significantly lower in some rural areas.
• Remote rural areas, including islands, have a significantly higher percentage of empty dwellings and second homes than other areas of Scotland, and wider research indicates that second home ownership is one factor driving house price inflation in many rural areas.
• There is low satisfaction with housing among islanders, with less than a fifth (19%) agreeing that there is enough housing available to meet local demand.
• Rural properties are, on average, both larger and less energy efficient than those in urban areas.
• There is a higher reliance on cars in rural areas, and lower use of public transport, with journey times to key services longer than elsewhere in Scotland.

This chapter focuses on challenges for rural Scotland that can be identified in the Rural Scotland Data Dashboard.

A number of persistent and related challenges make life in Scotland’s rural and island communities more difficult, particularly in terms of accessing services, availability and affordability of housing, heightened by house price rises and second home ownership, higher reliance on cars, rising living costs, rising poverty and fuel poverty.

3.1 Economy

The dashboard provides evidence of economic challenges in rural Scotland. For example, economic growth has not been even across rural Scotland. Between 2007 and 2019, Gross Value Added (GVA) increased at a slower rate in islands and remote rural local authorities than it did in other local authorities.^[46]

The percentage of high growth registered private sector businesses 2012-2022 has declined across all areas of Scotland since 2012. A significant drop occurred from 2018-2021 and 2019-2022. The highest percentage change was in Mainly Rural areas (down 32%) with other areas dropping 22-23% in that period.^[47]

There is also a mixed picture in terms of rural incomes. For example, there is a higher proportion of higher earners in accessible rural areas (32%) than in remote rural areas (23%). The most common income bracket for a household in both remote rural areas and the rest of Scotland is the £10,001 to £20,000 category, while in accessible rural areas it is the £40,001 and over category.^[48]

Median gross annual pay for all full-time employees is highest for people living in accessible rural areas. It is lowest for those living in remote rural areas. In rural areas the median wage for females is higher than that for males, while in the rest of Scotland the male median wage is higher. Median hourly rates of pay for both females and males were highest in accessible rural areas (£16.26) and lowest in remote rural areas (£14.19).^[49]

Across Scotland, the proportion of employers with underutilised staff – at least one employee with skills and qualifications more advanced than required for their current job role – fell marginally in 2020 to 33% compared to 35% in 2017 but then rose again to 37% in 2022. In the Highlands and Islands the proportion increased during this period. In 2020, over a third (36%) of employers in the Highlands and Islands had under-utilised staff and this figure remained unchanged in 2022.^[50]

Similarly, whilst the average proportion of adults with no or low qualifications fell in Scotland overall by 5% between 2010 and 2020, in mainly rural areas it fell by 4%, and in islands and remote rural areas by only 1%.^[51]

Satisfaction with public services is lower in rural areas than urban areas of Scotland. Less than half of adults living in accessible rural areas (45%) and remote rural areas (48%) were satisfied with the quality of public services (local health services, schools and public transport), in comparison to 58% of adults living in large urban areas.^[52]

3.2 Cost of living

There is widespread evidence that people in rural areas, and remote rural and island communities in particular, experience higher costs of living for some goods and services, for example weekly food costs. Additional minimum living costs for households in remote rural Scotland typically add 15-30% to a household budget, compared to urban areas of the UK.^[53]

Rural employment rates often compare favourably with urban areas although it is well-known that rural incomes can be volatile and precarious. Slightly higher pay in rural Scotland (than urban) can still be inadequate to meet basic needs, as goods are more expensive in remote rural communities^[54].

People in accessible rural areas earn more than those in remote rural areas. Median gross annual pay (before taxation and other deductions) for all full-time employees is highest for people living in accessible rural areas. It is lowest for those living in remote rural areas. In all areas of Scotland the median gross annual pay is higher for males than females. In remote rural areas the difference is £4,790 and in accessible rural areas the difference is £3,878.^[55]

Fuel poverty rates continue to be higher in remote rural and island areas.^[56] From October 2023, it is estimated that there will be 150,000 fuel poor households in rural areas (a fuel poverty rate of 35%) and 680,000 in urban areas (a fuel poverty rate of 33%). From October to December 2023 it is estimated that 47% of island households will be in fuel poverty, compared to 33% of mainland households.^[57]

The average energy efficiency profile of rural properties is lower than that for urban, and dwelling characteristics associated with lower energy efficiency are disproportionately represented in rural areas.^[58]

Rural households are at risk of fuel poverty for reasons including: over half (65%) of rural dwellings are not within the coverage of the gas grid, and are therefore dependent on alternative fuel types that are more expensive; rural properties are on average 31% larger than urban dwellings and therefore cost more to heat; 28% of dwellings in rural locations use oil as a primary heating source. In urban locations, oil is used in less than 1% of dwellings.^[59]

In 2021, nearly three quarters (73%) of island residents surveyed said that their heating bills had increased in the past year. Over one in ten (13%) stated that they could not afford to keep their home warm in the past year, and around a tenth (8%) said they have had to choose between keeping their home warm and buying food or essentials for themselves and their family.^[60]

3.3 Social justice

In 2019-22, poverty rates in rural areas (18%) were slightly lower than those in urban areas (21%). However, the proportion of people in each category who are in relative poverty in rural Scotland has gradually increased since 2006-9 from 15% to 18%.^[61]

Relative poverty is increasing in rural areas. There are people in poverty in all areas of Scotland. Our highest concentrations are in large urban areas, however 220,000 individuals in Rural Scotland are still living in relative poverty after housing costs (2019-22 estimate).^[62] That is around 1 in 5 of all people living in poverty in Scotland. That number has risen from 160,000 in 2006-09, but the proportion of the people in poverty who live in rural Scotland has remained at about 1 in 5 of the people in poverty in Scotland overall.

Overall compound deprivation levels (combining multiple indicators of deprivation) are lower in rural areas. This is because, whilst there are households on low incomes, the areas where these homes are located are less likely to have higher levels of housing deprivation, unemployment or crime. Individuals living in severe poverty after housing costs have also risen from around 100,000 in 2010-13 to around 150,000 in 2019-22.

There are lower levels of child poverty in rural areas in Scotland compared to urban areas, with 18% of rural children living in relative poverty, compared with 27% of urban children. In 2019-22, child poverty rates in rural areas (18%) were lower than those in urban areas (27%) and Scotland as a whole (24%), but have stayed relatively stable since 2006-9, when 19% of children were in relative poverty in rural Scotland. The Scottish Child Payment for low-income families with children under six was introduced in February 2021.

Fewer pupils in accessible rural and remote rural areas are registered for Free School Meals than in urban areas.^[63] However, wider research indicates that the stigma attached to applying for free school meals can prevent rural parents whose children are eligible from taking this up (Gruffudd et al, 2017).

Levels of food insecurity for children and young people are similar across urban and rural Scotland. Almost a tenth of primary and secondary school pupils in remote rural (8%) and remote small towns (9%) stated that they 'always or often' go to school or bed hungry, compared to 7% in accessible rural areas.

There are well-known challenges with rural childcare provision, from the availability of services, including wraparound care, to issues faced by providers such as changes in demand and recruitment of staff. Parents and carers in rural areas (66%) are less likely to use all of their 1,140 funded hours than those in urban areas (75%). In rural areas, two thirds (66%) of parents have experienced difficulties affording childcare, compared to a smaller number (61%) in urban areas.^[64]

There is little difference between the percentage of the population in each area of Scotland that claims Scottish benefits. A slightly higher percentage of the population claim benefits in remote small towns (2% compared to 1% elsewhere).^[65]

Almost a tenth (9%) of Social Security Scotland clients are in accessible rural areas, with a small number in remote rural (2%) and very remote rural areas (2%). This is comparable for specific benefits, such as the Scottish Child Payment and Job Start Payment.^[66] The proportion of the working age population claiming Universal Credit is highest in remote small towns (21%) where it is 7 percentage points above the national average (14%). This is followed by other urban areas (17%). The proportion is lowest in accessible rural areas (9%).^[67]

3.4 Housing

Access to affordable housing is a long-standing issue in some parts of rural Scotland, and is often connected to other challenges impacting the rural economy, including workforce recruitment and retention in remote rural and island communities.

Remote rural areas have a significantly higher percentage of empty dwellings (5%) and second homes (6%) than other areas of Scotland.^[68] This percentage can be particularly high in specific areas, such as islands. Ensuring that empty homes are maintained, improved and put to the best possible use forms part of the Scottish Government’s Housing to 2040 strategy.

There is low satisfaction with housing among islanders. In a 2020 survey, the majority (71%) agreed there is a high proportion of holiday lets or second homes in their local area. Less than a fifth (19%) agreed there is enough housing available to meet local demand. Over half (60%) disagreed.^[69]

A recent report by Scotland’s Rural College indicates that second home ownership is a driver of house price inflation in many rural areas, with over half (51%) of residential transactions in island and remote rural local authorities being cash sales, compared to 27% in larger cities (SRUC 2023).

House prices are rising across rural Scotland, particularly in accessible rural areas.^[70] In 2022-23, the average price of a residential property in rural areas was £271,436 compared to £202,588 in urban areas. Accessible rural areas are on average the most expensive area to purchase a property.^[71]

Between 2021-22 and 2022-23, residential property prices increased across all areas of Scotland. Remote small towns saw the largest rise in average residential property price with an increase of 13% (Registers of Scotland, 2023).

Furthermore, the number of new build housing completions increased in mainly rural areas, but decreased in remote rural and island areas, between 2011-2021. In 2021, there were over 8,500 new build housing completions in urban with substantial rural areas, compared to around 6,000 in mainly rural areas and less than 500 in islands & remote rural areas.^[72]

3.5 Transport

The Rural Scotland Data Dashboard also points to another ongoing challenge in rural areas, which relates to accessibility and transport.

There is higher reliance on driving as a means of transport in rural areas, and drive times to key services including GPs, primary and secondary schools, and shops are longer. In remote rural areas, 63% people live within a 15 minute drive time to a secondary school, compared to 91% of people in accessible rural areas and 100% of people in the rest of Scotland.^[73]

Transport costs are also higher in rural and island areas, particularly for working-age households and pensioners.^[74] Residents in rural areas are more likely than those elsewhere to spend over £100 per month on fuel for their cars.^[75]

Adults in rural areas are more likely to drive to their place of work or education, and less likely to take public transport, than those living in the rest of Scotland.^[76]

Fewer than half of people living in accessible rural (47%) and remote rural (40%) areas of Scotland live within a 15 minute drive time to a GP by public transport, this compares to 92% in the rest of Scotland.^[77]

Satisfaction with public transport is lower in rural areas. Adults living in remote rural (44%) and accessible rural (53%) areas are much less satisfied with the quality of public transport than those in large urban areas (78%).^[78] Young people living in

rural areas and islands face barriers to bus use including timetables, frequency of buses, limited route options, and a lack of bus stops nearby.^[79]

People living in Scotland’s island communities are particularly reliant on ferries to and from the mainland, but levels of satisfaction with these services are relatively low. In a 2020 survey, just over half (58%) of island residents agreed that the mainland ferry service is reliable, but less than half (42%) agreed that ferry fares to and from the mainland are good value for locals.^[80]

3.6 Digital Connectivity

Almost all homes in Scotland can get some broadband access, however the speed and quality is significantly lower in some rural areas.

Ofcom estimated that in 2022 around 8,000 premises in Scotland (residential and commercial) could not access either a decent broadband service, or good 4G mobile coverage. Almost all of these premises are in rural Scotland.^[81]

In rural Scotland,^[82] coverage from superfast or newer higher-speed services is consistently lower (superfast broadband coverage is 79% in rural areas compared to 99% in urban areas and gigabit-capable coverage is only 34% in rural areas compared to 80% in urban areas in 2023). Ofcom estimate that 18,000 premises in Scotland (residential and commercial) still do not have access to a ‘decent’ broadband service with speeds above 10mb/s via either a fixed or wireless network.^[83]

Scotland has the lowest geographic 4G network coverage of any UK nation however Scottish premises have 4G coverage close to the UK average. In-vehicle coverage on major roads by at least one operator is 96% for 4G and 99% for voice calls however across all operators it is 55% for 4G and 72% for voice calls.^[84]

4G coverage by all mobile network operators in rural areas is considerably lower than urban areas although coverage has increased since 2022. People in these rural areas have less service provider choice and risk having no signal away from built-up areas.^[85]