Scottish Rural Communities Policy Review: stage 2 - review of policy and delivery context

4. Political and policy changes in Westminster

Agricultural and rural policy developments

Ministers in the UK Government’s Department of the Environment, Food and Rural Affairs (Defra) have taken a slightly different direction of travel with regard to new policies for agriculture and rural communities over the last few years.

The UK Conservative Government (with Boris Johnson as Prime Minister) published its agricultural transition plan in November 2020 (updated in January 2024^[66]). In June 2023, Defra (under the Conservative Government of Prime Minister Rishi Sunak) published its policy paper for rural communities setting out how it plans to support growth and prosperity in rural areas based on four main priorities:

• Growing the economy – supporting rural areas to prosper and boosting opportunities through jobs and skills;
• Connectivity - delivering gigabit broadband and mobile coverage in rural areas and increase access to public transport;
• Homes and energy - facilitate the building of more homes for local people to buy where local communities want them, powered by secure and resilient energy supplies;
• Communities - rural communities continue to be places where people want to live and work. We will improve access to high quality health and social care and take further action to tackle rural crime^[67].

Defra’s 2023 policy paper acknowledges that there are barriers to growing the rural economy, including in relation to connectivity and access to local skills and training and quality employment opportunities. It also notes that challenges resulting from the Covid-19 pandemic and high energy and food prices (associated with the war in Ukraine) have been worsened in the countryside. The paper outlines a £7 million fund to test new ways to bring together satellite, wireless and fixed-line internet technologies, proposals to increase affordable housing by creating a network of ‘Rural Housing Enablers’ to identify sites with local support for development and act as brokers between developers and communities, and pledges to improve transport networks and mobile coverage.

The UK Government also has a long-standing commitment to undertake rural proofing, a commitment originally established in the 2000 Rural White Paper and most recently reported on in the 2023-24 rural proofing report^[68]. Whilst Defra acts as rural champion across the UK Government, the success of the rural proofing process relies on a good understanding of rural issues and how to respond to them across departments where policy officials take the lead on rural proofing.

The Levelling Up agenda

The actions set out in the ‘Unleashing rural opportunity’ report in June 2023 were set in the context of the UK Government’s commitment to levelling up – or spreading opportunities more equally - across the country. The levelling up agenda was set out in February 2022 in the Levelling Up White Paper published by the UK Conservative Government^[69]. A key pillar of the levelling up agenda was the launch of the UK Shared Prosperity Fund^[70] in April 2022 with the initial three year funding period running until March 2025. The UK Shared Prosperity Fund was essentially a replacement for European Union Structural Funds and those elements of the European Union’s Common Agricultural Policy that did not support agriculture. The Shared Prosperity Fund had three axes: Communities and Place; Local Businesses; and People and Skills.

The UK Government described the £2.6 billion Fund as follows:

“It seizes the opportunities of leaving the European Union, by investing in domestic priorities and targeting funding where it is needed most: building pride in place, supporting high quality skills training, supporting pay, employment and productivity growth and increasing life chances. It will reduce the levels of bureaucracy and funding spent on administration when compared with EU funds. It will enable truly local decision making and better target the priorities of places within the UK. It will lead to visible, tangible improvements to the places where people work and live, alongside investment in human capital, giving communities up and down the UK more reasons to be proud of their area.”

The funding was delivered locally by local authorities, drawing in the expertise of other local stakeholders, including businesses, members of parliament (MPs) and the voluntary sector, to identify priorities. Four priorities for funding were identified:

• Boost productivity, pay, jobs and living standards by growing the private sector, especially in those places where they are falling behind;
• Spread opportunities and improve public services, especially in those places where they are weakest;
• Restore a sense of community, local pride and belonging, especially in those places where they have been lost;
• Empower local leaders and communities, especially in those places lacking local agency.

All areas in the UK received an allocation from the Shared Prosperity Fund based on a formula rather than a competition. In identifying places to receive Shared Prosperity Fund support in Scotland, there was a requirement to align with the aims of the Scottish Government’s National Strategy for Economic Transformation, and with other national funding streams (for example, the Vacant and Derelict Land Investment Programme, the Place Based Investment Programme, the Investing in Communities Fund and the Strengthening Communities Programme), as well as local and regional strategies^[71].

A range of other funding schemes were launched alongside the Shared Prosperity Fund, including the Community Ownership Fund (worth £150 million, this closed in December 2024). This supported community groups across the UK (with capital and revenue funding) to take ownership of assets and amenities at risk of being lost.

The Rural England Prosperity Fund launched in September 2022^[72] and served as a top-up to the UK Government’s Shared Prosperity Fund (in line with the UK Government’s aim to streamline the funding landscape) for eligible English local authorities, defined by the proportions of their populations that are rural. The Fund succeeded European Union funding from LEADER and the Growth Programme which were part of the Rural Development Programme for England.

The Rural England Prosperity Fund (worth £110 million in capital grant funding) supported projects focusing on new and existing small businesses and community infrastructure in rural areas and funding was available for projects up until March 2025. As with the main Shared Prosperity Fund, the Rural England Prosperity Fund supported the aims of the UK Government’s Levelling Up White Paper and it sat alongside other Defra funding schemes:

• The Farming in Protected Landscapes programme – which provides funding to farmers and land managers in protected areas (including National Parks) to support nature recovery, mitigate the impacts of climate change, provide opportunities for people to discover the landscape, and protect or improve the quality and character of a landscape or place^[73];
• The Farming Investment Fund – funding for farmers, growers or land managers to increase productivity, manage their land to benefit the environment and support their agricultural business^[74];
• The Platinum Jubilee Village Hall Improvement Grant Fund – a £3 million fund to fund 100 village halls to improve their facilities^[75].

As its name suggested, the Rural England Prosperity Fund sought to specifically address the challenges facing rural areas, including lower productivity rates, poorer connectivity and poorer access to key services.

Since the election of the Labour UK Government in July 2024 there have been some changes to this funding landscape at UK level. In particular, it is worth noting that the UK Shared Prosperity Fund has been continued on a transitional and more limited basis, with £900 million of investment made available in 2025-26 (including in Scotland)^[76].

The Plan for Neighbourhoods

In March 2025 a new funding scheme was announced by the UK Government, making £1.5 billion available for 75 selected communities across the UK through the Plan for Neighbourhoods^[77]. The aim of this fund is to “foster stronger, better connected and healthier communities” across the UK through investment in high streets, local parks, youth clubs, cultural venues, libraries and health and wellbeing services in scope of regeneration and creating local growth and opportunities. New Neighbourhood Boards will be created across the 75 selected communities bringing together residents, businesses and public sector bodies to decide on spending priorities in their area.

The funding, amounting to £20 million for each of the 75 places, will be available over the next decade. This fund forms part of the UK Government’s Plan for Change missions to grow the economy, launched in December 2024^[78]. Five key missions have been outlined:

• kickstarting economic growth;
• building a National Health Service (NHS) fit for the future;
• ensuring safer streets;
• breaking down barriers to opportunity, and;
• becoming a clean energy superpower.

The plans to achieve this are ambitious but questions have been raised about their potential to engage with, and deliver benefits for, places across the UK. For example, in terms of kickstarting economic growth, they do raise questions about how areas that have long been disadvantaged can engage, especially if they do not already have strong public-private partnerships and a track record of inward investment. Areas have been selected across the UK on the basis of key factors including rates of deprivation and healthy life expectancy. Ten places have been chosen in Scotland:

• Arbroath
• Elgin
• Kirkwall (Orkney Islands)
• Peterhead
• Dumfries
• Irvine
• Kilmarnock
• Clydebank
• Coatbridge
• Greenock

The Planning and Infrastructure Bill

Alongside the Plan for Neighbourhoods, the UK Labour Government introduced the Planning and Infrastructure Bill^[79] to the UK Parliament in March 2025. The Bill extends to England and Wales, with some provisions for infrastructure extending to Scotland.

The Bill aims to speed up planning decisions in England, and also contains new policy on a number of retained powers. It sets out a number of legislative changes for Scotland, including:

• Changed provisions for connecting electricity generation infrastructure, new harbour fees and port consents, and electric vehicle charging points.
• Proposals for a Bill Discount Scheme for households closest to new electricity transmission infrastructure. This scheme aims to boost community acceptance of new transmission infrastructure by ensuring communities directly benefit from their proximity to the new infrastructure.