Integrated Rural Development
We are continuing our inquiry into what makes for successful integrated rural development. We are also trying to identify the barriers to delivering such development. Today's meeting is part of a series of evidence-taking sessions that we are holding as part of the inquiry. For four of our meetings we have travelled around Scotland. We have had a fruitful and interesting time hearing the individual and corporate experiences of people on the ground, which we were determined to do.
This is the second meeting on integrated rural development to be held in Edinburgh. We will take evidence from a number of agencies and representative bodies. A total of eight witnesses are present, and we will hear from them in two separate panels.
I am pleased to welcome as our first panel Douglas Murray of the Association of Scottish Community Councils; Jon Harris of the Convention of Scottish Local Authorities; Andy Baird of the Scottish Trades Union Congress; and Brendan Burns of the Federation of Small Businesses. Thank you for giving up your time to give evidence to the committee today. We have received written submissions from you, for which we are very grateful. Rather than our going over those, I would like us to proceed straight to questions. In as few words as possible, will you indicate what you regard as the single greatest barrier to integrated rural development?
Douglas Murray (Association of Scottish Community Councils):
The administrative grant causes many community councils serious problems. In my written submission, I characterised one community council that was undertaking planning consultations with its local interests on various developments in its area.
I have encountered another instance of the problems with the administrative grant within the past few days, in which a community council will effectively be made bankrupt because of a legal bill incurred in carrying out its duty under the community council scheme of promoting elections for community councils. An individual raised an interdict against the community council, which had to employ a Queen's counsel in the Court of Session to defend the action, which was thrown out. The community council now has a bill for about £900 on a grant of £300 per annum.
The amount of grant that community councils receive is relevant to the years 1975 to 1977, when they were set up. It is no longer relevant to their workings today, particularly when they need more and more to be involved in what is happening locally and nationally and to represent their community interests.
I am sure that we will return to that.
Jon Harris (Convention of Scottish Local Authorities):
Integrated rural development is about taking an holistic approach that joins up economic, environmental and social aspects of rural development. One of the main barriers has been the fragmentation of the public sector and of its capacity to work together. We consider community planning to be a key factor in challenging and addressing that fragmentation. Fragmentation is sometimes found not only between agencies but within agencies. In such cases, we find a silo approach, in which an issue is considered from a single-service perspective such as planning or economic development. That is probably the most significant barrier.
Andy Baird (Scottish Trades Union Congress):
Although I represent the STUC, my union is the Transport and General Workers Union Scotland. We have a keen interest in agriculture. Many of our members live and work in rural communities and our union is acutely aware of the problems that they face. Our firm belief is that jobs and prosperity are vital to the well-being of all communities in Scotland, rural or urban. However, low pay, the seasonality of jobs, a narrow enterprise base, costly housing and poor access to goods, services and transport hinder rural Scotland's development.
As a manufacturing union, the T&G seeks the integration of rural economic development within a manufacturing strategy that has full employment as its goal and that addresses the problem of grants to firms that subsequently leave areas with no regard for the communities that they abandon.
Agriculture remains at the heart of rural Scotland. Agricultural employment is vital to many remote rural areas. We feel that the voice of those who work in the industry must be heard, as they are the ones whom policy will ultimately affect. We are deeply concerned that the Minister for Environment and Rural Development continues to deny our request for involvement in the forward strategy group for agriculture.
As a public service union, we are acutely aware that service provision in rural areas is often haphazard. Services in rural areas should include access to transport, housing and development as required. We have a keen interest in transport. We have witnessed how deregulation has led to the removal of services in many rural communities and are aware of how the absence of decent, affordable public transport adds to social and economic exclusion.
Our firm view is that policies for the regeneration of rural communities should not be treated in isolation from general policy areas. We look forward to further debate and discussion on how to advance integrated rural development.
Brendan Burns (Federation of Small Businesses):
I will keep my comments brief. The main barrier to integrated rural development is a failure to understand the difference in risk between running a business in a rural area and running a business in an urban area. The solutions that are offered are likely to be urban solutions, rather than solutions tailored to rural areas.
There is also a failure to understand entrepreneurship and the fact that it is needed in all of society. Too often we assume that entrepreneurship means only business. We would like the word to apply to councils and other service providers, because if there were more entrepreneurship across the board, we would be able to develop businesses better. Far too much lip service is paid to small business, and there is not enough recognition that small business matters. Too many people regard businesses that employ fewer than five people as lifestyle businesses, which is a huge barrier to development.
We lack relevant statistics for small businesses in rural areas. Many statistics are bandied around, but they are not available for rural and remote areas. There is a failure to recognise that there has been a major cultural change in rural microbusinesses. There are too many adjectives and not enough verbs in every document that we read.
I declare my interest as a member of T&G Scotland.
I address my first question to Andy Baird. I am very pleased that you are present at today's meeting, because for some time I have argued that we should take evidence from the trade unions. You have already referred to the strategy working group. In your submission you say:
"trade unions should have had an integral part to play in the strategy working group, as those working in the industry should have their voice heard, as it is they who policy will ultimately affect."
I have raised that issue with the minister. How can the committee take it forward?
The Executive wants the strategy working group to be run on an inclusive basis. There are a number of interested parties. We believe that community councils, local authorities and trade unions should be able to make a direct input to the group. The minister was too restrictive in his approach and excluded the T&G, which represents a large number of people who are dependent on the agricultural economy. This is not about scoring points. We would like our views to be taken into account, so that any strategy team that is set up is representative. If that is done, the policy that is developed will be more beneficial and will reflect the views of the people who are affected by it.
You say that there is
"scope for co-operatives and mutuals to play a bigger role in rural communities".
Can you say more about how you envisage that happening? What are the problems relating to the use of pesticides, and how can that be reduced?
When discussing the development of policy, it is important that we consider the people on whom that policy will impact. There are many bodies whose views should be taken into account, including community councils and economic development agencies. In many rural areas, development agencies are dominated by a particular group of people. Trade unions are making the point that groups must be representative.
Let us consider the issue of regional selective assistance. How should we provide funding? How can we shift the focus from purely rural issues to promoting business in a rural setting? It is important that long-term funding to generate employment is available. I would argue that, in a rural setting, even a relatively small employer can make a tremendous contribution to the economy. All aspects of funding have to be considered. Any policy must be representative, taking all areas into account so that the policy can develop.
On pesticides, we have a particular interest in organophosphates. However, there is a clear need to develop organic farming. Food safety issues have been raised. Our view has always been that we should err on the side of caution. It should not be that people have to demonstrate a safety concern before any action is taken. The reverse should be true: when pesticides are used, their effects on the people who use them, and their long-term effects on the food chain and the land, should be recognised.
I would like to ask Brendan Burns a quick question. In Scotland, we have a problem with encouraging women to start up in small businesses. Is that even more noticeable in rural areas?
I do not think that attracting women into business is any more difficult. Women in rural areas suffer the same problems as do women in urban areas. Many of our women members are in rural areas. If there is a particular problem, the FSB has not noticed it. There may be a problem before people reach us, but our evidence has yet to show a problem.
I ask Mr Harris to comment on the first part of Mr Baird's second last answer. Mr Baird wanted more inclusion in discussions and decisions. How does that comment fit with the process of community planning? I understood that that involved a wide consultative process.
Perhaps I can link things together and tell you how I see integrated rural development being facilitated by community planning. The idea is that all the agencies—the voluntary sector, the community sector and the private sector—should have a shared vision. Everyone should be moving in the same direction. People worry that national initiatives pull local agencies in different directions. We regard community planning as allowing a balance between the national and the local—a balance between a top-down and a bottom-up approach. We have to give communities space to set their own priorities and not simply to deliver national priorities.
The third element of community planning is the capacity to deliver joint resourcing and joint management of services for the community—for example, services for the elderly, for young people or for business development. Not only would that allow more effective services, but it would deal with the costly problem of separate arrangements often being required in rural areas. If joined-up delivery of services is provided, the problems of higher unit costs can be dealt with. The fourth element is the ability to join mainstream budgets with social inclusion partnership funds or European funds. It is useful for the voluntary sector to link into all those funding streams.
All those elements roll together to engage the community. In other words, people in communities of place, such as villages or small towns, and communities of interest, such as farming, can engage in the delivery of the strategic vision. The trick is to ensure that everything links up. Community planning is still in the early stages. We are beginning to develop the strategic vision throughout Scotland, to have discussions about improvements and setting targets and to consider joint resourcing.
We are still in the earliest stages of engaging with communities. There are, however, some examples, of good practice in this area. For example, when Stirling set up its community planning process, it did so through a Stirling assembly, which involved a range of community organisations—community councils, business and the voluntary sector. In Dumfries and Galloway, decentralising was considered and area committees were engaged. That area still needs to be developed to its full potential if we want to call community planning community planning.
Integration is all about bringing things together. Is not one of the problems that there are too many elements to bring together in the first place and that is why the issue is so complex? It is difficult to achieve integrated rural development.
I ask Douglas Murray and Brendan Burns whether there are any initiatives—from the plethora of several thousands of initiatives—organisations and agencies in rural communities that they would scrap or that they would keep? Or do they believe that the status quo is fine and hunky-dory?
I came across an area in Aberdeenshire last year where the community was involved with the local authority in the establishment of a social business development in an old school. They trained mentally or physically handicapped young people to do work with fabrics and sign writing. That is an example of a complete integrated package that involved the local authority, education, community education, social work and the health service. Members of the local community came together to establish a good working relationship, which benefited employment prospects in that area. That development worked well.
Jon Harris mentioned community planning. Areas such as Stirling and Dumfries and Galloway have worked well and they have pulled their communities into the planning process. In some areas in Scotland communities are excluded from the community planning process.
Which areas?
There seemed to be distinct difficulty in Inverclyde, where the community was not brought into the process in the first instance. There was an extreme reluctance to get involved in a process whose framework had already been decided. We need to involve the community from the outset instead of dragging it in as an afterthought.
I agree with the point about the plethora of agencies. It is difficult to know how to answer that question. There must be some good ideas out there and some good business initiatives. Scotland seems to suffer from projectitis and there does not seem to be any follow-up. Even the federation does not seem to be following up on that. It should be saying, "We have had a look at that. It could be worth expanding."
Many schemes that have been tested elsewhere or which were taken up first in urban communities come through to the rural areas. Rural businesses start to pick them up because they have seen the possibilities in the schemes. One example is the scheme by which Scottish Enterprise offers consultancy help to businesses. However, that scheme is coming to an end, as there is virtually no money left. By the time initiatives reach small businesses in rural areas, they are coming to an end.
It is difficult to get any of our members to speak highly of any of the initiatives. There are a variety of good reasons as to why that occurs. Frankly, none of the initiatives jumps up and hits us between the eyes. Nobody is saying, "That is a really good idea. We want to see it spread across the whole of Scotland."
One other area that I think about when I think about rural development is health improvement. At the moment, a number of initiatives exist, all of which have different funding streams and partnership arrangements. I am thinking of the drug action teams or the anti-alcohol strategies, which have their own co-ordinating committees, or the joint health improvement plans, which are part of the community planning framework.
It would make more sense to rationalise them and bring them together. The committee may be interested to know that one of the remits of the community planning task force is to examine the rationalisation of initiatives and partnership arrangements. If the committee would like me to do so, I can arrange for the evidence that is given to the task force to be made available to the committee.
That would be very useful. Thank you.
The concept of community planning should mean what it says. We were asked which of the agencies we are not happy with. It would be possible to develop a list of people with whom we were not particularly pleased, but that would not be constructive. If we want the concept of community planning to develop, we should involve as many people as possible. If more people made a greater input, notwithstanding the problems that would arise in processing policy, areas such as transport, social exclusion and housing could be addressed in a more meaningful way.
It is important that there is a forum for such issues. The concept of community planning should be developed in a community setting. If more people who are to be affected in some shape or form are involved, the end result should be an improvement in policy terms from the present situation.
Are you saying, Mr Baird, that there is no link between barriers to integrated rural development and the number of initiatives and agencies that exist at present? Last week, the Rural Development Committee met in Huntly. The witnesses included a representative of Turriff and District Ltd. A number of economic agencies cover the Turriff area: Turriff and District Ltd, Enterprise North East Trust Ltd, Scottish Enterprise Grampian, the Scottish Executive and European agencies—the list goes on and on. Is there a link between the number of agencies and barriers to integrated rural development in rural communities?
The multiplicity of agencies can restrict the ability to progress issues. If the concept of community planning is to be embraced, the concept has to mean what it says. I accept the rationale that it would make sense to have one agency, but that would depend on the approach that was to be taken. We prefer to do things positively. We want to give our evidence in a constructive manner. We want to improve things, not to indulge ourselves by showing up and criticising anyone who has offended us over the past few years.
I want to pursue the theme of joined-up policy. In his introductory comments, Mr Harris mentioned the problems of silos in organisations and between organisations. That is something that the committee has come across on its travels. In housing provision for example, many problems were mentioned and lack of housing is seen as a major barrier to rural development. If development is to take place, it will not be possible to bring in workers if they cannot be offered somewhere to stay.
Other issues included land availability, planning, the provision of services such as electricity, water and sewerage, the investment that people were allowed to draw on to build houses and the investment that is coming in for social rented houses. Do you have any comments on how we might address those issues? Community planning might address some of them, but national policy—or indeed European policy—sometimes affects decisions that are made and development that is undertaken.
Rhoda Grant gives a good description of the problem. In the submission that we and the Society of Local Authority Chief Executives and Senior Managers—SOLACE—submitted regarding the Local Government in Scotland Bill, we considered the various agencies that are required to engage in the community planning process. We have received a number of representations from councils that have major problems relating to infrastructure. They suggested that Scottish Water should be part of the process. If there is a build-up of pressure, we will want to develop the economy and housing, but we might not have the infrastructure to support that. That concern has been voiced by Dumfries and Galloway Council. It used to be a major issue in Huntly in Aberdeenshire, where the committee held its previous meeting—capacity there was insufficient.
The message that I take from that information is that, from a rural perspective, the infrastructure should be part of the discussion and representatives of Scottish Water or rural transport bosses, for example, need to be part of it. That cannot be forced, but it would seem to be sensible and good practice to bring all the parties together.
How could you influence the national policies of larger agencies and private sector companies? Major problems have been identified with regard to electricity, for example. It is difficult to influence those agencies or companies on a local level, and to ask them to be part of community planning procedure or to come in and make the desired difference, if they are governed by national priorities rather than by local ones.
In one respect we have promoted a duty on ministers to tackle that when they give their strategy or direction to the agencies and non-departmental bodies that they sponsor, including such bodies as Scottish Water.
The private sector is one area with which the community planning process does not fully engage. That needs to be developed. When I talk about community engagement I am talking about the private sector and communities. That engagement is beginning to happen with regard to the voluntary sector. It is a matter of getting all the funders together and delivering an agreed compact with the voluntary sector so that it is sufficiently resourced to allow it better to engage in the process.
As far as ScottishPower is concerned, we simply have to make the case that the discussion will be more effective if that organisation is part of it, and not just in rural areas but in urban areas. There is an issue about some larger organisations' ability to get down to local level throughout Scotland. We have problems with the unitary national health service boards in some areas, where six or seven community planning partnerships might be working together. There are problems, but we should be seeking to engage regionally or, if possible, locally.
I want to go back to something that I said when I was asked what the barriers were. Entrepreneurial thinking offers means of looking for different and new solutions. One of the things that we keep running up against is the fact that urban solutions are being brought into rural areas. That is as much to do with business as it is to do with housing or anything else. The solution might be different in rural areas, which requires people to think differently. It means finding solutions that might not even be acceptable in urban areas, although they are more than acceptable in rural areas.
I spoke to a council employee and suggested something that the council could do, but he said that it was not worth it because he would not be fired for putting in another oil-fired boiler in a community school. That is the attitude that prevails—this is what we have done and what we will do now and in the future, because this is what we do in urban areas.
The people who make such decisions are based in cities and think in urban terms. They do not think outside the circle. People in authority must think entrepreneurially—local authorities could be the main catalyst for that—and, more important, must not be criticised when they get things wrong. They will get things wrong, but as many times as they do that, they might get something right. The solutions for cities are not the solutions for rural areas. Housing is but one example of that.
The supply of accommodation to rent is poor in rural areas. Fuel poverty and energy efficiency issues must be addressed. Investment must be made in homes to rent, and access to improvement grants should be made easier in order to deal with insulation and energy conservation. Overall, the clear direction must be to ensure that low-cost housing is available to people who depend on work in an area. If someone who lived in tied housing lost their employment and they had stayed in that community all their life, where would they find accommodation, if none was readily available locally? An umbrella agency to co-ordinate all such activities is needed to reduce delay.
I will stay on the topic of affordable housing. In all its visits to places such as Buckie, Mallaig and St John's Town of Dalry, the committee has heard that the availability of affordable housing is a serious problem. In Mallaig, some people would like to establish a shellfish processing facility, because a large quantity of our prawns are caught there, but accommodation would not be available to house the workers who would be required to work in a shellfish processing factory, so establishing such a factory is not possible.
Last week, we heard from Mr Rasmussen, an architect who had produced excellent plans for housing on a farm steading. Those plans were blocked by planning law. We have also heard from a builder in St John's Town of Dalry who said that he could not fill even a gap site in a traditional Scottish small village high street because of stringent planning restrictions, which are often imposed from Edinburgh. Often, although a local council might grant permission, plans are given the thumbs down in Edinburgh.
My question is to each witness. Do you agree with the witnesses from whom we have heard throughout rural Scotland that planning law is a serious barrier to the creation of affordable housing and to development opportunities to build such housing in rural Scotland?
I touched on housing in my submission, which talks about tied housing. A condition of much new housing in farming areas is that it is available only for agricultural employees, so if someone lost their job because of a downturn in the agricultural industry and the job no longer existed, the house would sit empty, irrespective of whether someone could use it. Planning is a barrier to that use.
In general, councils must develop their housing strategies to fit the community planning framework, so the issues are not all separate, because planning and the development of a planning regime can support appropriate development. Issues are also raised by the right to buy and, for example, by councils' ability to work with partners to invest in social housing where gaps exist. Such work is prohibited under the Local Authorities (Goods and Services) Act 1970, but the Local Government in Scotland Bill does not propose to lift that prohibition.
A range of issues needs to be addressed if we want to deal with the problem that faces communities in which there is an opportunity for economic development but a lack of housing or other infrastructure to support it. That demonstrates the need for a holistic approach. Planning needs to be included in the discussion, so that different messages are not sent out from different areas of activity.
If agencies apply regulations that are formulated elsewhere, the result will be poor. If there is a clear desire, through community planning partnerships, to develop formats that are suitable to local situations, we might be able to make progress. Housing, the right to buy and the provision of affordable accommodation are issues that require attention. Everyone is aware that the current situation is inadequate. We need to consider how to make funding available to solve that problem. We might need to restrict the right to buy to ensure that there is affordable accommodation in an area. There might be some variation between communities, but the approach that we take should reflect the requirements of each situation and the number of people who need to live in an area.
The need for affordable housing has been discussed repeatedly in rural areas. Too often people propose the urban solution of building an estate or five or six houses. In rural and remote areas the self-employment rate is high and we are encouraging people to start up businesses. However, when people do that, planning authorities tell them that they cannot locate their businesses in the place that is proposed, but must rent council premises at £9,000 a year and open their businesses 7 miles down the road. If people propose to build a garage for their pipes and other material, they are told that they cannot do that on domestic premises.
We do not view houses in an entrepreneurial way—I will continue to use the word entrepreneurial. Houses are bases from which people can work. If we tell people that they can start up businesses, we should also be able to say to them that, if they have sufficient space, they should build a workshop or garage. Such an approach does not work in an urban situation, where every house is located 7ft away from the boundary line. We need to rethink what we mean by housing and what that housing will do.
To illustrate the problem of affordability, I cite the example of my son, who works in forestry. At the moment, forestry is in a dire situation. If my son, who is in business, cannot afford a house, what is the situation for others? The other day I spoke to a man called John, who works for me and who is thinking about buying a house or getting hold of a plot of ground. He was faced with 101 questions. At the end of the day, we have to deal with someone who lives in a city or town—in our case, Perth—who cannot grasp what we need or what we want to do. In the case that I have just mentioned, it is not John but his wife who wants to start up a business.
Planning decisions have knock-on effects. The more I speak to the council, the more I realise that I am banging my head against a stone wall, because I have a vested interest in the matter. We are in a chicken-and-egg situation. If businesses do not make profits, they will not pay high wages. If they do not pay high wages, what housing will be affordable? If we build affordable housing, we must build not another estate but housing that meets the needs of communities.
During our sojourns—particularly in St John's Town of Dalry and Fort William—concerns have been expressed to the committee about tourism. Businesses such as McTavish's Kitchens in Fort William and businesses from elsewhere in my constituency—from Nairn, Badenoch and Strathspey—believe that the key to marketing is for businesses and interested individuals to work together locally to promote their area directly. Often, if packages are promoted, people will come to sample a variety of attractions in a particular area. Is encouraging businesses to work in consortia the right approach? Should such consortia, in order to ensure local success, be given more power to control marketing? That would entail more devolution—and more cash—from VisitScotland to local areas, to allow local businesses to work together to promote their areas more effectively.
Were those points aimed at anyone in particular?
I am hoping that everyone will agree with them.
In the hotel trade, consortia have been tried several times. I have a long history in the hotel, catering and restaurant trade. In many cases, what makes consortia work is not the marketing—the marketing is actually the end-product. What makes them work is the ability to purchase locally. The profit that comes from more integration then goes into marketing. VisitScotland has a particular view on the promotion of tourism. Its view is no better and no worse than anybody else's. Decisions over consortia and local marketing have to be left to the local community.
I am always reluctant to see money going in. Too much money goes into grants. We say to businesses, "If you market together, we'll give you money." We have to get people to come together, and get the councils and others involved, but I would be far be happier if the businesses had to put their hands in their own pockets. We cannot always have grants: one man's grant is another man's unfair competition. The only way we would support grants would be if they were open to everybody. We cannot say that grants are available in Nairn and Strathspey but not in Inverness. That would put us in a difficult commercial situation. However, if businesses see the advantages of coming together, and can market together, that can work.
Last year, I was involved in the promotion of a number of businesses in one market town. I got them to come together to examine the evaluation of their rating bills. I had heard that few businesses had questioned their valuations, but we got 35 businesses together and achieved a reduction of £4,000 or £5,000. Those businesses included two that had been wrongly revalued 10 years previously.
We are now considering taking the same route for utility services to retailers—involving the gas, telephone and electricity companies, and possibly Scottish Water. We want to find out on a co-operative basis what has been done. All our work can be done without grant assistance; all we need is a little more support for the general theme of what we are doing.
In tourism, an integrated approach could deliver more business and lead to better product packages, and making connections between different types of business could lead to more added value for the local area.
I accept that an agency is required to oversee the approach. In tourism, marketing in the UK is not the only important thing: we must impact on other countries to attract business. We have to take the broad-brush approach and involve the wider community, because the local authority and other agencies are required to provide associated services. On that basis, although some of the issues may be diversified so as to involve the local community, there needs to be an overview of those issues, and consideration should be given to marketing and to attracting inward investment through tourism.
On local businesses coming together and working on a consortium basis, I refer again to the area tourist boards. I believe that the reason why the area tourist boards did not work was that there was not enough business input and far too much council input. The difficulty lay in the idea that the local council, because it was the main funder, had to have the main say. That was the dead hand of bureaucracy, I am afraid. Now, it is a matter of businesses making up their minds: if they want to come together, they will have to put their hands into their pockets. The council belongs in such activity, but not to lead it.
On that note, we will wrap up this evidence-taking session. Thank you very much, gentlemen, for your time. I ask you to step down from the table now, although you are more than welcome to stay in the public gallery for the rest of the afternoon's proceedings.
Before we start taking evidence from the next panel of witnesses, I should say—for the benefit of those who have been kept away from the media since some time before 3 o'clock—that the final score was Republic of Ireland 3, Saudi Arabia 0—and I had an Irish grandmother.
I welcome witnesses in the second panel. I thank you for coming along and giving of your time. I welcome Sandy Brady of Highlands and Islands Enterprise, David Gass of Scottish Enterprise, Shane Rankin from the Crofters Commission and John Lennon from VisitScotland. You will be aware of the format.
We have received written evidence from all parties except VisitScotland, and I propose that we start with questions similar to those that we have asked previously, on the understanding that the question about what you see as the biggest single barrier to a meaningful policy of integrated rural development is not meant to be an invitation for criticism. The idea is that this is a proactive inquiry that will, we hope, lay down some pointers as to how better to implement policy. This is not meant to be a critical inquiry; we are not here just to gripe and complain, but to put our finger on meaningful ways forward. I ask Sandy Brady to kick off. What is the single greatest barrier to a meaningful policy of integrated development?
Sandy Brady (Highlands and Islands Enterprise):
Some of the previous answers to that question have stressed the need to get the processes right, and community planning has been held up as a model to allow that. So far, the signs are good.
Getting the processes right is important, but I stress that it is important not just to get the processes correct, but to think about the content of what we are trying to achieve. That must start with an attempt to create among the partners a common understanding of what a successful rural community looks like, be it a small island, a larger mainland community or whatever. We need to understand what we are trying to achieve in the medium and longer terms. When those clearly defined longer-term objectives exist, the processes of getting the job done through joint projects, partnership arrangements and so on becomes more meaningful.
From a Highlands and Islands point of view, we must agree on the importance of employment growth and population growth in order to sustain the rural communities that have done well over the past generation, and to help those that have not done so well. Jobs and people are the answer to long-term prosperity.
David Gass (Scottish Enterprise):
Our thinking is very much along the lines of Sandy Brady's on the need for an assured vision and agenda for the rural economy. Within that vision there must be clarity on people's roles and responsibilities, and clarity on how we engage with communities and offer them access to this process. Some progress has been made through the work of economic forums. I hope and expect that much more progress will be made through the community planning process, which is very welcome.
Many of the well-known practical infrastructure barriers—to do with transport, information and communications technology, and sparsity of population—act as cost barriers and accessibility barriers, which prevent a number of communities from playing a full part in integrated rural development.
Shane Rankin (Crofters Commission):
The question has been answered by many people this afternoon, so I may not be able to add a great deal. I stress the need for clarity on what integrated rural development is supposed to be and on why it is important in the communities that we serve. The central issue is the sectoral approach that agencies and organisations tend to take. There is a certain inevitability about that, because those agencies are charged with a single issue and have a responsibility to deliver on it quickly, effectively and cost-effectively. Perhaps what is missing from the assessments of most organisations is how much they have helped other agencies to deliver their objectives and how much broader than their own sectoral issue their impact has been.
Professor John Lennon (VisitScotland):
Tourism cannot exist in isolation from other aspects of the rural economy. Tourism is now integral to many parts of rural Scotland; there has been sea change in the importance of tourism to employment. Traditional primary industries now take less of a role while tourism's role is growing. Tourism has to work alongside farming, fishing and crofting.
Agriculture is key to our plans. The rural economy features time and again in the marketing and advertising of Scotland. The branding of Scotland uses such icons repeatedly. They are at the centre of our product-marketing strategy and cannot be ignored. I concur with my colleagues on the importance of integration and of working with all sectors to build a sustainable rural economy.
I want to address my question to John Lennon of VisitScotland. I am tempted to ask why Ireland are better than Scotland at football, as well as being better at attracting tourists.
Evidence we have taken in places that we have visited during our inquiry has told us that people want more support to develop tourism in their communities because tourism creates jobs. However, although many rural communities have low levels of unemployment, it is often highlighted that people who work in tourism are poorly paid and much of the work is seasonal. How can we address those matters? How can we get better quality jobs in the tourism sector? Many people view seasonal and low-paid work as a barrier to rural development.
When organisations tell the committee that they need more money to develop tourism initiatives, are they right? Is that the best way in which to promote tourism in rural areas, or should we create a better infrastructure so that people find it easier to get to rural areas? That might be a better way in which to boost tourism.
I am glad that I do not have to answer the football question, because there were enough other questions there.
What you say is absolutely right. Rural tourism is now acknowledged as a big sector of the rural economy and as an industry with the capacity to generate growth in jobs and in the countryside. However, tourism is beset by problems of seasonality, low profitability and high rates of business failure. I guess that the problem for people sitting in agencies is whether to throw grants or business development schemes at that. There are structural aspects to the industry. If the committee considers the main employers, in particular the accommodation sector, the concentration of large hotel and accommodation providers is to be found predominantly in cities, away from the more remote, rural coastal and island areas. Those businesses are highly seasonal and the operators find it very difficult to generate employment all year round. How do we counteract that at national level?
We must look back at what happened in cities such as Edinburgh, where slowly, over a period of about 15 years, a sea change took place in what happened over the winter, Christmas and New Year period. The commentators in the press now think it highly obvious that the straightforward thing to do was to focus on Hogmanay and Christmas and so extend the season.
That lesson is well learned in VisitScotland. Many of our campaigns focus on seasonal extensions: our Spring into Summer and Autumn Gold campaigns are starting to bring in improved visitation during the early and end periods of our traditional summer peak of May through to September/October. It is possible to help to build all-year-round employment by generating all-year-round tourism. It would be possible to do that by focusing on the many activities, niches and specialist interests that the rural economy can provide.
In general terms, urban destinations can buck the seasonality trends—they show much less of a downturn during the winter months than do the rural and island destinations. Much of our marketing and advertising has been aimed at pushing the seasonal extension into those periods by focusing on activities. If we take walking as an example, a significant amount of investment has gone into the marketing, e-marketing, advertising, brochure promotion, dedicated websites and industry-specific data of that activity.
The investment was such that we are now generating huge amounts of wealth from it. Walking, as part of a holiday, now accounts for close to £500 million coming into the economy. The figure is astonishing. By focusing on activities such as walking, which are synonymous with rural, island and coastal areas, we can start to build better jobs in the tourism industry. That is a much more appropriate approach than trying to subsidise jobs directly through grants.
I am aware that I have spoken for some time, but I want to return to a point that was made about marketing. One of the panel talked about decentralising marketing expenditure away from VisitScotland. If we look at national tourism organisations across the world, of which there are 130, we find that their predominant activity is marketing. Between 70 and 100 per cent of the expenditure of those national tourism administrations is spent on marketing. It would be a brave administration that turned away from that. Marketing is the core business of VisitScotland. That is not to say that, if the business case is there, assistance should not be provided for industry-led initiatives or consortia such as Nairn hoteliers, which focus on building a critical mass of operators to market an area.
I point the committee to marketing networks that are structurally unsound. Those include the malt whisky trail, which was a good idea 15 years ago when it was instituted, but is a problem today. That is because exactly the same operation is being marketed collectively. By contrast, some more innovative initiatives are coming out of rural Scotland such as undilutedscotland, which is a collective that brings together activity providers, accommodation operators, attractions and retailers in the Speyside area. The way to develop marketing consortia is to build a cluster of things for people to do—just as has been done in Speyside. That is the kind of initiative that should receive backing, not something that is giving a message that is écouté et répété—the same again, only more so.
You talk about generating all-year-round tourism. Are you aware that I have raised with the minister the idea of establishing state-run hotels along the lines of the Parador hotels in Spain? That would allow itineraries that make use of old, historic properties to be drawn up. Transport could be integrated into those itineraries. Such a system might encourage people to visit non-traditional tourism areas such as my home town of Coatbridge. It could also be used in remote and rural areas. Have you given any thought to establishing state-run hotels?
I knew that that suggestion had been made. State-run hotels are not common in other parts of the world. Increasingly, the state is moving out of commercial hotel operation. There is little state representation in ownership and operation of the world's leading hotel chains.
However, it would be absolutely right for us to seek innovative ways of developing heritage properties—of which we have many. Organisations such as the National Trust for Scotland are considering ways in which to make money from properties in their portfolio that are making losses. For that reason, they are converting parts of the castles and heritage buildings that they own, which they are able to sell very easily or for which they are able to charge very high rents. Elaine Smith's idea is sound, but perhaps the private sector, rather than the state, should take the lead in developing it.
Last Friday, at our meeting in Huntly in the north-east of Scotland, we took evidence from Peter Argyle, the chairman of Mid Deeside Ltd, which is a successful local community development company. I hope that the witnesses have had a chance to read that evidence. We heard from the grass roots that local community development companies are starved of core funding—funding that will enable them to operate at a low level. People can access marvellous amounts of funds—lottery grants and so on—that make a real impact on their communities. We heard about people in local communities accessing funds to establish village hopper bus services and so on.
On page 10 of its written submission, the Scottish Enterprise network states:
"The lottery and millennium funds demonstrate that communities will want to become involved in developmental activities if there is a potential funding resource available to them."
I could not agree more. However, a couple of paragraphs later the network states:
"agencies such as LECs struggle to give communities an undertaking on the funds available to assist them, particularly in a situation where there are other (often national) priority outputs against which these agencies are measured. This does not encourage the community to become involved in development."
That is the nub of the issue. I understand that local enterprise companies have powers to provide local community development companies with a small amount of core funding. At our meeting on Friday, I pressed the chief executive of Scottish Enterprise Grampian on that matter. From the Scottish Enterprise network's written submission, I take it that Scottish Enterprise would like to provide such funding, which is part of its remit. However, because Scottish Enterprise is not measured on whether it provides core funding to local community development companies, it would rather someone else did that. Is not the purpose of our inquiry to point out when Government agencies such as Scottish Enterprise are saying all the right things, but not doing them because those measures are not included in their performance indicators? When Scottish Enterprise says that someone else should provide core funding, the result is that no one does so.
Taking the last point first, a lot of work has been and is being carried out by the rural policy group to examine the indicators and what we are measured against. That group involves a number of bodies, including the Scottish Executive environment and rural affairs department and the Scottish Executive enterprise and lifelong learning department.
It has been recognised—to go back to my response to the opening question—that different means of delivering more effectively and more effective solutions can be provided at a local level if we are allowed, within the flexibility of our remit, to consider providing local solutions. That may well involve a community trust, a community development company or other partnership vehicles.
I recognise core funding as a particular issue, particularly for some of the bodies that you have mentioned. A number of the funding opportunities that are open to the bodies that have been mentioned do not take account of the salary costs, core costs or running costs. That is recognised throughout rural communities. We would like the question of whose remit it is to provide local solutions to be addressed within the community planning framework at a local level—and so I return to the question of remit and responsibility.
In a typical enterprise network intervention, we would provide pump-prime funding and to seek a sustainable method of delivery with which to move forward. We would often build in exit strategies to our work. Fundamentally, that does not help those organisations that are delivering specific, tailor-made projects year on year that have come to year 3 or year 4 and are looking for core funding to maintain their staff costs. We recognise that as an issue, we promote the idea of local flexibility being built into the indicators for the enterprise network, and work on the delivery vehicles is continuing. Responsibility for how the solutions are provided sits not just with the enterprise network, but with the community planning process, because the various organisations and bodies involved often play a valuable continuing role in the community.
As the chief executive of Scottish Enterprise Grampian did, you are hitching a wagon to community planning. As far as I can see, you have a remit to assist but are choosing not to, simply because the extent to which your organisation is successful—and whether you assist or not—is not being measured by the Scottish Executive. You are not encouraged to do so. I get the feeling that, although you are saying that the local solutions that we have discussed are a good thing—and you are right to point out that we are missing the target here—somebody else will have to deliver them. But who?
I am not saying that somebody else has to do that; I would like clarity with regard to where the responsibility sits. At present, that is unclear. In my area, the Scottish Borders, some of the capacity-building work being carried out with community bodies and some of the core costs for those bodies are handled through the rural partnership network, which is run very well and which meets a local solution for a local need.
It may well be different in Grampian. We are not necessarily saying that the responsibility does not sit with us; we are seeking clarity and guidance from our local agency network with regard to where responsibility should sit. The best way to do that is through integrated rural development, which this inquiry is about. In some instances, responsibility may sit with a council; in other instances, it may sit with the enterprise network.
Let me make this clear for the record: whereas the chief executive of Scottish Enterprise Grampian said clearly that it did have a remit, you seem to lack clarity about whether you have the remit to provide the solutions or not. It is a simple question: do you have the remit or not?
That is within our powers as far as a delivery mechanism is concerned, but we would like clarity about any role on core funding beyond what the enterprise network would normally get involved with. We would often seek a sustainable delivery mechanism that does not require public sector intervention at the same level year on year.
I will return to the theme that I discussed with the other panel of witnesses. How can different agencies join up on housing, for example? When I talk to the representatives of the enterprise companies, they say that they are able to bring in business, but that they cannot bring in workers, as they are unable to provide housing for them. If the enterprise companies encourage inward investment and expansion, that can lead to problems, as they have to deal with the people whom they need to recruit.
The crofters building grants and loans scheme is a good way of allowing crofters to build houses. However, when I was on Colonsay, I was told that it was expensive to build a house there. I was told that people would like access to the crofters building grants and loans scheme alongside the scheme to support rural housing, which is run by Communities Scotland. How can agencies work more closely together to provide services, such as housing, that are important to rural development?
It is to do with costs, as Mr Rumbles mentioned in his question to Scottish Enterprise. I commented at the outset that it is inevitable that agencies will have a single-issue or sectoral preoccupation—that is what they are measured on. Perhaps agencies need to be measured each year on how they have helped other agencies to achieve their single issue or sectoral responsibility.
As Rhoda Grant suggested, the Crofters Commission has support schemes that impact on housing in the crofting areas. It also has schemes that support agriculture, which impact on the environment and so on. A number of our schemes have an impact that is wider than the single crofter preoccupation. It is important that we understand how those schemes connect with Highlands and Islands Enterprise's efforts to create economic development. It is also important that we understand how Communities Scotland schemes connect to the crofter housing scheme and so on. There is an issue about dialogue and understanding, but it is happening as part of the community planning process in the Highlands and Islands and as part of some of the work that has resulted from "A Forward Strategy for Scottish Agriculture".
That is particularly the case in the Western Isles. The strategy contains a challenge to the agencies to examine the long-term future of crofting in the Western Isles. That study began with a premise about the economic development potential of crofting, but inevitably it is now concerned with social impact and environmental consequences—how everything hangs together in the Western Isles and what impact the strategy might have on that.
The study is creating a forum and a level of understanding across the agencies that will enable them to see the connections between what they do and the opportunity that exists for each agency to assist other agencies to take their agendas forward. In such ways, we can focus initiatives to develop understanding in each of the agencies that probably does not exist at present.
In the Highlands and Islands over the past 10 to 20 years, housing availability has revolutionised the way in which a rural community operates. In parts of Skye, including the Sleat peninsula, the availability of housing has grown along with employment and population growth. The mix of housing in the Sleat peninsula is both private and public sector, which is important. In that part of Skye, there has been a great willingness to accommodate new housing in the countryside. I do not think that many people would say that the housing has spoiled the area; indeed, it has added to it. Solutions exist if there is the good will to find them.
It is possible to achieve an availability of sites in many parts of the Highlands without spoiling the landscape. It is possible to create the conditions in which public sector housing, including housing association accommodation or sites for self-build can be made available. As it has been done in so many parts of the Highlands and Islands, it can be done in other parts.
Housing is a key component. In all rural areas, Scottish Enterprise is now closer to planning and housing. That is a critical element in assisting the type of employee we want to keep in rural areas and attracting new people into rural areas. Those two elements have to be much more joined up than was previously the case. Steps have been taken in that direction.
Joined-up or flexible—or do the two go together?
They go together. In rural areas, there is now much closer planning of operations and budgets before the operating year. For example, housing plans and other initiatives that involve the local authority now take much more account of the work of the other agencies in similar areas. At the end of the day, everyone is working to satisfy the needs of the community.
Shane Rankin gave the example of the Western Isles—pulling everyone in to consider the scope and then widening the consideration to include all the agencies. Will a special study have to be carried out everywhere to find out how to pull people in, or is community planning wide enough to involve the national agencies? Things seem to happen in pockets all over the place, but how we can make things happen as a matter of course?
Community planning should give the structure that allows that to happen because, fundamentally, it should be about a common vision and agenda for an area, taking a bottom-up approach. It will give the agencies direction.
There is statistical, factual evidence that shows how communities function, how business, agriculture and crofting operate, how many new houses are being built, or whatever. Some things are often assumed, but when evidence is consciously and deliberately collected it can show very different patterns to what was expected.
There was an interesting exchange earlier on the seasonality of tourism. It was implied that seasonality was a bad thing, but that is not necessarily true: to sustain communities in a crofting area, seasonality can be a very positive thing.
As well as considering the evidence, we have to consider how we can allow communities to articulate their own needs. They have to have the scope, the confidence and the capacity to do that. Yet another initiative—initiative at the edge—exists for that purpose and is beginning to bear fruit. Members have recently seen in Colonsay that communities can develop the confidence to make a forceful case for their needs. Such mechanisms, and community planning, can allow communities to articulate their needs, but what they say must be balanced against the evidence of how rural communities function.
My first question is on crofting. How important is crofting to the sustainable social fabric, especially in the Highlands and Islands? Do red tape and rules stifle crofting as a way of life even more than low prices stifle it? What are the key factors that can keep crofting as a main part of future integrated rural development?
Phew!
In less than quarter of an hour, please.
Some of the questions have been covered already.
Yes. The answer depends on how crofting is defined—and people tend not to define it because doing so is too difficult or complicated. I would argue that it is defined differently in every crofting area—in Shetland, in the Western Isles, in Argyll and so on. That is one of its strengths. Not everywhere is it about a small piece of land with a few sheep; in some places it is about substantial areas of land involving substantial businesses such as consultancy or tourism. Those businesses are often very successful enterprises.
There is too much red tape in some respects. However, without regulation, crofting communities would not exist. On balance, there have been more positive aspects to the red tape than negative aspects. New crofting legislation will be proposed later in the year and that will provide an opportunity to examine those issues.
On the argument about whether crofting has sustained communities that might not otherwise have sustained themselves, or about whether crofting has sustained communities in a way that has not been replicated in rural communities where it is not practised, there is strong evidence that many communities would disappear without the crofting system.
The case that I am always referred to is that of a research study that was carried out in the early 1990s by, I think, Gordon Macmillan, comparing the Cabrach in Aberdeenshire with Rogart in Sutherland, in relation to the change in population and the number of households in the early part of the last century. I am not sure whether members know those two areas, but the difference between the two communities is staggering. The Cabrach is a desert; it is abandoned. Rogart is a thriving community with many households and with new houses being built all through the place. The only underlying influence on that seems to be the existence of the crofting system and crofting regulation.
I would like to ask the VisitScotland representative a further question. Do you agree that hospitality is the key to successful tourism? What can be done to train staff to provide enthusiasm at all levels in order to produce the kind of hospitality that we come across when we visit other countries?
Hospitality, recreation and tourism blur together. They are all part of what people do in a leisure context. Sometimes that involves structured business leisure; sometimes it is pure recreation. It is interesting to note what is happening with hospitality.
Ireland was alluded to, but I failed to answer the question—my mind was on a different situation involving Ireland today. Ireland is facing a net labour shortage in hospitality. Young Irish people—or indeed Irish people of any age—cannot be found to work in the hospitality sector. They have been lured into the software and financial services sectors.
The Irish have just started a major structural review of all their training, including higher and further education, in hospitality in tourism. They believe that they have a problem in that area: unless they, or we, have the authentic experience of hospitality—a Scot in Scotland or an Irishman in Ireland—the product will be diluted, and the craic, in the case of the Irish, will not be real.
Hospitality is crucial. That brings us back to the structural question. We have to make the tourism industry attractive to young people, to returners to the work force and to entrepreneurs starting their own businesses. Hospitality is as retail used to be about 20 years ago. Retail turned itself around and invested in training and development and in human resource systems, which developed people and built on service quality. Retail is a different industry, however.
We are seeing the beginnings of a sea change. Better operators, with a passion for hospitality, are starting to come into the industry, albeit far too slowly. If people go to an island such as Arran and discover three quality restaurants there, they are pleasantly surprised. The situation is beginning to change. I can remember 20 years ago, when there was nowhere of quality to eat there.
We have come to the issue late and we have to play catch-up very fast. The Irish example—going back and doing a root-and-branch review—is absolutely the right one to follow. We already have the problem of leakage with our tourism and hospitality graduates. They train in the profession but go and work in retail or some other part of the service sector. We have to inspire a passion.
The Irish have started a fundamental review. We have to examine the industry here and, from an agency point of view, we must—although this is a dreadful phrase to use—pick winners. We have to pick those hospitality entrepreneurs and companies that invest in and believe in people and that do not import labour and pay the lowest possible rates, ignore trade unions and try to get the fastest buck for the minimum input. We have to work with those businesses—they are often indigenous and unique to Scotland—that are non-chain presences. They will drive change and give our hospitality and tourism industries a distinctive flavour. Thankfully, more of those businesses are coming in. Glasgow and Edinburgh are awash with them in the restaurant sector. They are beginning to come into other parts of Scotland, although the process is slow.
I am heartened by the fact that change is coming from the private sector. The agencies have been working hard on the matter. I am not sure that we can point to the best hotelier in Ayrshire and say, "That was down to the work of Scottish Enterprise Ayrshire"—would that we could—but it is good to see that change is beginning to happen. Hospitality is at the heart of the matter. Marketing and transport links help, too, of course.
I was pleased to hear Professor Lennon promoting clusters—groups of businesses and individuals providing a rounded package of accommodation, activities and entertainment in local areas. I know that people such as Andy Machin-Young in Nairn and initiatives such as the "Monarch Country" promotion are examples of success. However, I take Brendan Burns's point that a grant to one individual is an unfair subsidy to another individual who is competing in the same business. What support, in pounds, shillings and pence, is provided to promote cluster groups in Scotland? Is there a fund, or is the support restricted to the provision of advice and access to the web, for example?
The support of clusters takes the form of a business development role, which probably falls more easily into Scottish Enterprise's court, although I am not trying to duck the question. VisitScotland's marketing focus at a local level is channelled primarily through area tourist boards. I find that the marketing message is in danger of dilution when it goes through 14 area tourist boards.
In terms of individual businesses coming together, undilutedscotland, to which I referred, has received significant assistance from the local enterprise company, Scottish Enterprise Grampian. As far as I am aware, VisitScotland is not a major funder of or contributor to local marketing initiatives—that support predominantly comes out of the LEC and HIE network funding.
Would not it be a step forward if VisitScotland was a major funder, given that you promote the clusters concept and it seems to work, certainly within my constituency? There are huge untapped energies in the individuals involved. They could receive match funding for specific marketing initiatives to attract people from, in the case of Nairn, for example, various German towns and cities. Match funding would be useful and could address the concerns that were expressed by the ATB representative from St John's Town of Dalry, who felt that ATBs did not have any control of the funding because it was controlled at the centre. Would it be better if VisitScotland moved towards funding clusters throughout Scotland?
The question was specifically about the amount of money that is devoted to cluster funding, which I feel is a local enterprise company ball. If you are asking me about match funding, I am absolutely in favour of it, as long as it matches private with public money. All too often, match funding involves two sources of public sector money coming together, with very little private sector money coming into the game. Increasingly, we are looking at good ideas where the private sector is willing to devote resources and provide funding. Some of the examples that you refer to from your area are examples of entrepreneurial individuals getting behind an idea and putting physical and monetary resources into it.
If you are asking me whether VisitScotland has a role in marketing areas, marketing consortia and small marketing networks, I say that it does. Our role would be primarily to ensure quality and product development to underpin the marketing message. A well-meaning consortium of mediocre farmhouse accommodation and bed and breakfasts can do nothing for an area—indeed, it can disappoint and promise more than it delivers.
Our job—with our quality adviser and product development hats on—is to give those businesses direction. That does not mean that they should all aim for five-star status; they should look at the local supply. There might be a significant level of four-star business in the area but nothing at two-star level, in which case our advisers would say, "Here is the market gap. Here is where your consortium should come in. Now let us talk to our local enterprise company or our local HIE representative." That kind of cross-affiliation is strong and works at a local level, with tourism training associates tying in closely with ATBs and buying into ATB strategies. I believe that that is happening.
Is Sandy Brady of the view that HIE should be the paymaster for VisitScotland?
We are, to some extent, on some initiatives. One example is Golf Highland. Over the past five years or so, we and other partners have invested a relatively modest amount of money simply to bring together a huge potential that was not realised in relation to the quality of the golf courses around the Highland area—not just the big championship courses, but all the local village and town courses as well. That has worked well. We have got them to work together as a group and realise that they have the ability to market something that is rather special and, compared with international prices, incredibly good value for money.
Another example of that approach is in evidence in Orkney. Orkney has always had a cluster; accommodation providers, visitor attraction operators and local businesses have been adept in selling Orkney as an integrated package. When someone goes there, they hear about standing stones and jewellery and are told that the jewellery uses the designs that are found on the standing stones. Such messages reinforce each other. If there were cheaper and better transport, an area such as Orkney would do incredibly well. However, businesses there are restricted because Orkney is a remote area and transport is a cost.
Briefly, can you say how much of HIE's budget is devoted to funding marketing initiatives that are designed to promote tourism?
The amounts that are devoted to marketing and promotion are modest, as that is technically not our role. We occasionally help local consortia to get started. However, our immediate input into the tourism sector is investment directly in tourism businesses, which can be of the order of £3 million to £5 million a year, depending on demand.
Shane Rankin rightly highlighted the importance of the initiative at the edge and what it has achieved. In many rural communities, 10 or a dozen public agencies were deciding over the demise of the community. I have three or four questions for the witnesses.
I begin with Sandy Brady. In your opening statement, you rightly highlighted the importance of jobs to people and people to jobs in sustaining and unlocking opportunity in communities. First, what importance do you attach to the extension of broadband technology throughout the Highlands and Islands? Secondly, how important is the development of the University of the Highlands and Islands, in that context?
Professor Lennon, in your opening statement you mentioned the importance of tourism businesses' having to work beside other, established businesses in rural areas. Can you tell us where you see the barriers? Are they attitudinal or structural, or are they a combination of both?
My final question is for Shane Rankin of the Crofters Commission. Previous witnesses have mentioned the importance of access to affordable housing. Rhoda Grant mentioned the crofter building grant and loan scheme. Along with all the other executive agencies, should we be seeking a way of refreshing what is currently being delivered in crofter housing and putting it into the context of integrated rural development in the round?
I would like David Gass to comment on broadband technology in the south of Scotland as well.
Extending broadband capacity to as many parts of the Highlands and Islands as possible, including the remote rural areas, is absolutely fundamental to the next 10 years. It will mirror what was done in the 1990s, when the Highlands and Islands Development Board—latterly Highlands and Islands Enterprise—invested in pathfinder projects to provide digital telecoms such as ISDN. Today, 3,500 jobs in the Highlands and Islands are directly attributable to the availability of that technology. That bought us a tremendous advantage over other areas. The technology shrunk distance, which is an important benefit for many of our communities.
We need to maintain that advantage. Broadband is fundamental to allowing those kind of high-level and higher-knowledge jobs to be sustained in the remotest areas. Traditional transport infrastructure is also important, but broadband is fundamental to our infrastructure because it is the one thing that can shrink distance and create a level playing field on which we can compete with other parts of the United Kingdom.
The UHI Millennium Institute is probably the biggest single project for the long-term future of the Highlands and Islands. We know of no rural area elsewhere in the world that does not have some form of good-quality higher education institution to help long-term growth and prosperity. The lack of such an institution has been a gap in the Highlands and Islands for 150 to 200 years, but we now stand on the threshold of making it happen. The benefits will come steadily over the years.
Although there is a lot still to be done, UHIMI potentially gives us some of the advantage to enable us to build on the gains that we have made in the past 25 to 30 years. We must aspire to having not just any old university, but a quality university. We will need young and able professors who lead in their particular fields, so that the university appeals beyond the Highlands and Islands to prospective students from other parts of the UK and beyond.
Perhaps David Gass can also answer that question. I also want to refer him to a remark that was made at a recent seminar by the chief executive of Dumfries and Galloway Council. He stated that, unless there was effective roll-out of broadband technology throughout the south of Scotland, the economic development of his council area would be left playing catch-up with the central belt. Does David Gass agree with that remark? What can be done about the situation?
Yes, I agree—and that is the last time that I sit back in my chair. Broadband infrastructure is fundamental both to the existing economy and to economic growth of the south of Scotland. Probably more important, broadband also improves accessibility and allows individuals and businesses to compete on an equal basis with the rest of the country. Broadband plays a part in economic development and integrated rural development. Given the cost-benefit analysis that is important for the private sector, we are already playing catch-up to an extent.
We are addressing the situation in the south of Scotland and other rural areas through a combination of two things. First, we are looking at the aggregation of public sector demand for broadband. That demand exists because public sector agencies need to make their services available to all areas of the population. Secondly, our project accessing telecoms links across Scotland—project ATLAS—is looking at the overall costs of broadband access.
However, the only realistic solution over the next five to 10 years in some rural areas will be satellite technology. Again, several rural areas across the south of Scotland are piloting that technology. It is readily accepted that broadband is fundamental to what we are trying to do.
I will now let John Lennon respond to Mr Morrison's question.
The barriers to businesses working together are fairly fundamental and quite simple. To a large extent, tourism is about making it easy for people to buy things. Across the community, people need to have an attitude that is not inflexible and not intransigent. Rather, we need to learn to say, "It is my problem," and to have a can-do approach.
For example, the intransigence about when we stop serving food must end. Instead of saying that we stop serving food at 8.00 or 8.30 pm, we must be flexible about our opening hours. That is the qualitative difference in those places that are switched on to hospitality. For instance, when walking recently with five Americans and two journalists around Loch Venachar, I arrived at the Brig o' Turk inn, where I thought that we would be able to partake of a few light beverages. However, the inn was closed for the bank holiday. That was almost a parody of what I have come to expect. That place needs to change its mentality.
Changing that kind of mentality is not hard. I believe that we are starting to see things change, which is heartening. I am starting to see good entrepreneurial focus in the south-west of Scotland, for example, with Scottish Golf South West. VisitScotland has pulled together in partnership with ATBs and LECs and said, "Look, guys, our geopolitical titles mean nothing to a tourist. All they want to do is play golf on a green area, probably near some sea. That is what we must sell. We should sell that with one call centre number and we must get access to private courses, which is a devil of a job to do."
The key is flexibility. It is about pulling together products around what people want to do. People want to play golf. They do not want to play specifically in East Ayrshire, North Ayrshire or Scottish Enterprise Ayrshire. They want to play golf in that vague area; they have the names of a few golf courses in mind, but they do not know where they are located. We must make the purchase process as effortless for them as possible and sell the additional benefits. We should make positive recommendations. If they have a family with them, we should immediately recommend what the kids might want to do in the area when it is wet—I am not a betting man, but that is always a possibility.
That is the key. It is about looking at the product, considering what visitors want to do when they come here and trying to drive the message through communities that we should extend hospitality and beat the Irish at their own game, which is to drive home the message of hospitality. The Irish are very good at that, particularly with English customers—their biggest customer base and ours.
You mentioned families. Another issue is how we should encourage family holidays. I will use the example of Inverness. When I phoned round most of the hotels, only one of them could offer a childminding service. When I phoned the childminding service, the number rang out. The situation in this country is not the same as it is abroad; you cannot take your children everywhere with you in the evening. Should we consider offering family-friendly holidays in Scotland?
People have picked up on that idea in a number of places, but I know what you are experiencing, as I have children—I feel like a social pariah in many parts of Scotland when I arrive wanting to eat with three young children. Numerous families opt for self-catering breaks and opt out of eating out.
Change will come slowly. It is being led by chains, which recognise the customer base. I am thinking of chains such as Chef & Brewer and the Charlie Chalk operation. The food can be dreadful, but the kids can play there. One can sell a destination on the basis that it has remembered that there are under-21s, who might want to colour things in and cannot wait for the main course to be served and so should be served with the starters. That is quite simple stuff.
The situation is beginning to change. I am starting to see change in good rural attractions down in Galloway. Entrepreneurs are starting to recognise that children are important. I do not want to name operators, but I am heartened by what I have seen in Dumfries and Galloway, where businesses are coming out of a difficult period. They are opening for longer, focusing on family markets and extending the service.
Your comments about the hotel provision in Inverness are right. That is why families are often driven into self-catering operations and do not eat out much. We must also widen the market in other ways. One of the ways of attracting families is through activities: everything from water-based activities to walking and bicycle hire. There has been an incredible growth in the use of mountain bikes and in the variety of routes available for them, which range from soft to taxing. Good entrepreneurs are coming into the bike hire business. They are offering bikes at a variety of levels and suggest routes in partnership with local marketing agencies such as ATBs and consortia that are appealing to families. In some instances, the hotels are having to play catch-up and self-catering is benefiting.
I am sorry, that was a long answer.
Thank you for recognising that Dumfries and Galloway is coming out of such a hard time. I wish that the board of VisitScotland had been able to do that by renewing the £280,000 foot-and-mouth recovery grant that it agreed last year. I will shortly meet Euan Page on that subject.
I ask Shane Rankin to finish the session by answering Alasdair Morrison's question, if he can remember what it was about.
It was about housing and whether the grant scheme should be refreshed. Crofting is not only about agriculture; more than anything else, it is about people. Crofts are bases from which people go out to work, while keeping animals and doing small amounts of agricultural work. The central point about crofts is that they are places where people live. For decades, the crofter housing grant scheme has been fundamental in keeping that system going and in keeping townships and communities together. The grant scheme has kept in place the culture of those communities, which involves a dispersed pattern of self-reliance. Crofters do not rent their houses; they own them and have developed and expanded them through their initiative and effort, partly from their resources and partly from grants.
In crofting areas, some of the urban solutions—as they were described earlier—can be seen. Public housing has been provided, but in clusters of 10 or 12 houses. That would not look out of place in Stirling or Dundee, but it looks decidedly out of place in a crofting area. Often, a number of those houses lie vacant, because they are not the character of housing that people want. Those houses do not reflect the traditions or culture of the community. The strength of crofting communities has been the opportunity for people to be self-reliant, to fend for themselves and to have a stake in their community through their tenancy and the house that they have built with modest assistance.
In recent years, housing agencies have recognised the cultural issue, which has led to changes. Schemes such as the rural home-ownership grant scheme run in parallel with the crofter housing scheme. There is a need for the two schemes to complement rather than to pull against each other. It is probably time to examine the crofter housing scheme to discover whether it should be refreshed and whether there is significant tension with the rural home-ownership scheme.
The crofter housing scheme is central to keeping the regulated crofting system going, to keeping communities going and to recognising that there is a different culture in those communities, which is what has kept people there for a long time.
It would be unfair to use my position to have a pop at VisitScotland if I did not allow Professor Lennon a brief chance to have a pop back at me, if he wishes.
There was a certain inevitability about your point, convener. VisitScotland is taking the lead in working with Scottish Enterprise Dumfries and Galloway in a £300,000 ecotourism development project, which comes from a direct initiative from Ross Finnie. The project focuses on one part of the tourism action plan, which is to develop sustainable holiday practice in areas such as Dumfries and Galloway. Far from pulling away from that area, we have seen significant assistance and partnership development. That development will continue through that project, which is ideally suited to the locale.
I am sure that it is, although it is not part of the agreed foot-and-mouth recovery plan. We must continue the conversation at another time.
Today has been the sixth of the committee's evidence sessions on the inquiry. In our meetings around Scotland and here in Edinburgh, it has been abundantly clear that there is a wealth of entrepreneurship in rural Scotland. We hope that we can help to unleash it in a more efficient way.
I thank our witnesses for giving us their time and taking part in the inquiry. Our report will be published in the autumn and I hope that you will enjoy what comes out of it.
Meeting suspended.
On resuming—