Future of the Rural Economy - a Manifesto for Rural Change
Argyll and Bute Council · 24 September 2025
Back to Argyll and Bute Council — 24 September 2025 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
Page 1
ARGYLL AND BUTE COUNCIL ARGYLL AND BUTE COUNCIL DEVELOPMENT AND ECONOMIC GROWTH 24 SEPTEMBER 2025 FUTURE OF THE RURAL ECONOMY - A MANIFESTO FOR RURAL CHANGE 1.0 EXECUTIVE SUMMARY 1.1 This report examines the future of the rural economy in a rapidly changing national and global context. A thriving economy is essential to ensure future prosperity and generate the resources needed to address local priorities. However, achieving this potential in areas such as Argyll and Bute is hindered by centralised policy interventions and a lack of understanding of rural economic dynamics. This is reflected in our ageing demographic that makes adding population very challenging. 1.2 The Council are asked to: i). consider and approve the key interventions and lobbying points contained within this report. ii). Instruct officers to approach other rural councils to seek collaboration in relation to a manifesto for rural change. iii). Note that a further report will be brought back to a future meeting of the Council.
Page 2
ARGYLL AND BUTE COUNCIL ARGYLL AND BUTE COUNCIL DEVELOPMENT AND ECONOMIC GROWTH 24 SEPTEMBER 2025 FUTURE OF THE RURAL ECONOMY - A MANIFESTO FOR RURAL CHANGE 2.0 INTRODUCTION 2.1 Argyll and Bute has significant economic strengths aligned with national priorities, including expanding food and drink exports, clean energy production, tourism, defence, and emerging industries such as space, and marine sciences. However, systemic challenges exacerbated by underinvestment in critical economic infrastructure combined with increasingly urban-centric policies threaten the longer term viability of our rural communities and several of the industries that traditionally formed the foundation of our economy. 2.2 With population decline, an ageing demographic, and economic barriers intensifying, urgent action is required to secure the future of our rural economy. The council must work collaboratively with other rural local authorities to influence national policy and secure meaningful change. 3.0 RECOMMENDATIONS 3.1 The Council are asked to: i). consider and approve the key interventions and lobbying points contained within this report. ii). Instruct officers to approach other rural councils to seek collaboration in relation to a manifesto for rural change. iii). Note that a further report will be brought back to a future meeting of the Council.
Page 3
4.0 DETAIL CONTEXT AND CHALLENGES 4.1 Argyll and Bute’s economy is predominantly rural, drawing upon our natural resources and contributing significantly to national prosperity. However, rural Scotland is approaching a tipping point due to a combination of policy decisions, demographic trends, climate change impacts and infrastructure challenges. 4.2 The 2023 census data and subsequent midyear estimates confirmed that rural councils in many parts of Scotland are experiencing population decline and ageing at an accelerated rate. Economic policy at a national level appears increasingly focused on urban priorities, influenced by city-based policymakers, academics, and public agencies that are HQ in cities. This has led to legislation and regulations that often fail to reflect the realities of rural industries such as agriculture, fishing, and energy production. 4.3 The transition to net zero presents both significant economic opportunities and risks. While Argyll and Bute is well placed to contribute to the national economy through renewable energy and sustainable industries, policies must support local economies rather than potentially undermine them. Recent policy reversals, such as the deferral of the Deposit Return Scheme and the withdrawal of Highly Protected Marine Areas (HPMAs), highlight the importance of ensuring future decisions are fully informed by rural perspectives. 4.4 Chronic underinvestment over many decades continues to impact essential economic and social infrastructure, including transport (ferries, roads, and rail), digital connectivity, healthcare, and housing. The withdrawal of private sector services such as local bank closures, fuel stations, and shops exacerbates economic pressures. 4.5 In response, rural communities and local authorities are increasingly mobilising to challenge and influence UK and Scottish Government policy. Campaigns such as Invest in the West, the Rest and Be Thankful infrastructure push, and recent ferry service protests demonstrate the appetite for change. Argyll and Bute Council must build upon this momentum and work in partnership with other rural authorities to demand meaningful action from both Governments and national agencies. 5.0 KEY INTERVENTIONS AND LOBBYING POINTS The following ten key interventions aim to address critical challenges and unlock the full potential of Argyll and Bute’s economy: I. Digital Connectivity – Universal 5G and Fibre Broadband • Commitment from both Governments to ensure full 5G mobile signal to every premises in rural Scotland. • Social broadband tariffs to ensure affordability.
Page 4
• Accelerated delivery of the R100 and Gigabyte programme, with high-speed fibre broadband and/or alternative technologies used to fill connectivity gaps and reach every premises. II. Fair Freight and Delivery Charges • Legislation to prevent excessive delivery charges for rural and island areas, ensuring equitable pricing across the UK. • Lobby for Government support for innovative freight solutions, including drone technology and alternative transport methods that can support the rural economy. III. Community Benefits from Renewable Energy • Mandatory community benefit payments, or ownership options, from renewable energy developments, ensuring direct investment in local housing, infrastructure, and skills development. • Grid enhancements that prioritise local energy use, rather than solely exporting power to urban areas, or having to pay renewable generators to switch off. IV. Retaining Spirits Industry Revenue for Rural Investment • A percentage of existing whisky and spirits excise duty to be reinvested in critical rural infrastructure, including for affordable housing, ports and roads. • Islay proposed as a pilot area for revenue reinvestment through the declaration of an innovation zone. V. Energy Pricing and Grid Investment • Introduction of a progressive social energy tariff to support those off the gas grid. • Investment in local SMART grids to allow rural communities to store and utilise renewable energy retaining wealth and creating jobs in the local economy. VI. Rural Hospitality VAT Reduction • UK Government to explore a rural-specific VAT reduction and/or threshold increases, for hospitality businesses, given their economic importance and concerns expressed over high operational costs. VII. Sustainable Funding for Lifeline Ferry and Air Services • Sufficient capital and revenue funding to ensure the sustainability of council- operated ferry and air services. • Transfer of responsibility for Public Service Obligation (PSO) air routes to the Scottish Government to ensure service continuity and fairness across Scotland. VIII. Equal Access to Education, Skills Development and Innovation
Page 5
• Guarantee that rural learners have the same access to further and higher education as urban counterparts, including digital learning solutions. • Investment in local colleges (including Argyll College- UHI) to secure its future and align it with regional economic and social needs. • Additional support for rural secondary schools to ensure a full curriculum and subject choice availability inclusive of digital learning options. • Establish Innovation zones linked to industry strengths across rural Scotland. IX. Transport Connectivity – Lifeline Infrastructure Investment • A long-term commitment from both Governments to invest in rural transport infrastructure, ensuring lifeline connectivity for residents and businesses. • Increased funding for local road maintenance and strategic trunk road improvements in the interests of public safety and mitigating against climate change impacts. • Expansion of public and shared transport options, using new technology to facilitate innovative mobility solutions. • A national strategy for rural electric vehicle charging and green hydrogen refuelling infrastructure. • Full devolution of active travel funding to councils, allowing for locally tailored solutions. X. Housing – Investment Bank Support for Rural Development • Direct investment from the Scottish National Investment Bank to expand social and worker housing. For example, at the Dunbeg Corridor. • Targeted funding for areas where private sector delivery is not viable. • Enhanced support for tackling fuel poverty, including examining a social energy tariff for off-grid households. 6.0 CONCLUSION 6.1 The rural economy contributes significantly to Scotland’s national prosperity, yet structural barriers continue to restrict its full potential. With the right policy/fiscal interventions, Argyll and Bute can help drive forward economic growth in a sustainable manner, contribute more to national economic goals, help deliver the net zero agenda, tackle our demographic challenges, and secure a sustainable future for our communities. 6.2 Rural Scotland is at a crossroads, with the pace of societal and economic change rapidly accelerating. Whilst urban areas continue to attract investment and Government policy focus, rural communities risk being left behind or not able to take meaningful advantage of economic opportunities now and into the future. This rural manifesto for change outlines practical, achievable actions that can deliver meaningful outcomes for our communities. 6.3 Argyll and Bute Council must work collaboratively with other rural local authorities, COHI, the Highlands and Islands Regional Economic Partnership, and national
Page 6
stakeholders to influence policy and secure the necessary investment. Members are asked to consider and approve these lobbying points and decide on how they could be shared with the likes of other Local Authorities, COSLA and COHI. 7.0 IMPLICATIONS 7.1 Policy: Supports delivery of the Argyll and Bute Outcomes Improvement Plan, The Local Housing Strategy, Economic Development Strategy and associated Action Plan. 7.2 Financial: No immediate financial implications. 7.3 Legal: None directly arising from this report. 7.4 HR: None. 7.5 Customer Service: Improved infrastructure and services will enhance residents’ quality of life. 7.6 Risk: Failing to act will exacerbate economic decline. 7.7 Climate Change: Supports sustainable transport and energy solutions. 7.8 Fairer Scotland Duty: Aims to address socio-economic inequalities and support island communities. 7.9 Equalities – protected characteristics: This is a paper that is designed to recognise the particular issues faced by rural communities in an attempt to create an equal playing field for our communities. 7.10 Consumer Duty: The rural economy is fragile and increasingly impacted by national and international policy decisions. This paper puts forward a number of possible interventions that could strengthen our local economy and add value to the national economy. 7.11 Island Communities: Our island economies are particularly fragile given issues with transport connectivity, cost of living issues and dependency on the visitor economy. The interventions detailed in this paper could assist our island economy and help attract additional people to live and work there. 7.12 Children’s Rights and Wellbeing: None directly arising from this report. Kirsty Flanagan, Executive Director with overall responsibility for Development and Economic Growth
Page 7
Councillor Jim Lynch, Policy Lead for Economic Development, Islands, Rural Communities and Housing Fergus Murray, Head of Development and Economic Growth For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk August 2025