Diversity

26. "Rural Framework" recognised that diversity was a strength rather than a weakness for rural businesses. Operating from as broad an economic base as possible facilitates flexibility in difficult times and responsiveness to change. The transition from traditional patterns of activity to new opportunities presents challenges, particularly in sectors such as agriculture. While specialisation can be valuable, support is needed to encourage people to branch out into new activities where they have less expertise and experience. Local authorities and local enterprise companies have a pivotal role in managing the process of change.

27. Diversity is most closely associated with economic diversity and there has been progress in this area. Business based on information technology is also increasing in number on rural areas, with the support of agencies such as HIE and the Scottish Enterprise network. In the Highlands and Islands jobs in data processing have been created by Hoskyns in Forres and British Telecom in Thurso. Other projects demonstrate how a rural area can respond to the closure of an industry that previously was a major employer. The Cowal Initiative, which was a partnership response to the closure of the Holy Loch Defence Base, channelled resources from HIE, The Scottish Office and Europe into improvements to the economic diversity of the area, creating 900 jobs. The Cumnock and Doon Valley Initiative sought to enable recovery from the closure of the mining industry by making factory space available and other assistance to businesses and succeeded in creating 100 new jobs.

28. Natural diversity is mentioned in "Rural Framework" as an example of how variation is a strength. Steps have been taken to protect and increase the diversity of Scotland's habitats, wildlife and landscapes in the past three years, notably through the publication of the Biodiversity Action Plan by the Government in 1994 and the work currently in progress to implement it. The planting of native woodland has also increased natural diversity as has the move towards forests that have multiple purposes - commercial, recreational and conservation. This type of diversity ensures that Scotland continues to have an attractive and interesting countryside which provides a support for primary production and other industries with a strong rural link such as tourism. A recent study by HIE and SNH identified 1300 full time jobs in the Highlands which are directly associated with environmental activity.

29. Considerable effort has been focused on encouraging agricultural diversification, for example through the Farm Woodland Premium Scheme and the promotion of farm tourism. Programmes have been developed under Objective 5b of the EC Structural Funds to promote the diversification of agriculture. The Rural Enterprise Programme operated in the Highlands and Islands over the period 1991-94 when the area was designated under Object 5b. Forecasts provided by applicants to the Rural Enterprise Programme suggest that around 350 full-time equivalent jobs in the Highlands and Islands will be created or safeguarded by the Programme, which encouraged business diversification into sectors facilitating the maintenance of a close link with the land. Around 750 rural development projects have been assisted under the Programme. The Highlands and Islands now have Objective 1 status, and the Highlands and Islands Agricultural Programme will bring over £23 million by way of new assistance to farmers and crofters in the area up until 1999. Agricultural diversification programmes are planned for the Objective 5b areas in Borders, Dumfries and Galloway, Rural Stirling and Upland Tayside, and North and West Grampian.

30. Support in the form of training and advice has been provided by SAC through its courses in Leisure Management and Tourism and Recreation Management and the development of a rural business database for Scottish Farm Businesses. Carefully planned and managed restructuring of landuse and diversification of economic activity in the agricultural landscape of Central Scotland is yielding interesting results. The Lowland Crofting Initiative demonstrates how whole farms can be transformed into a number of smaller businesses, which retains some agricultural use while allowing economic diversification and revitalisation, landscape improvements, woodland creation, increased nature conservation interest and public access provision. This project is part of the Central Scotland Forest and has involved a partnership of the West Lothian District Council; New Lives; New Landscapes; SNH; the Forestry Commission; SAC and the Central Scotland Countryside Trust. At the West Harwood site for example, 90,000 trees have been planted, 6 new houses are under construction, with several owners planning to work from home, and the former farm steading now houses a quality furniture manufacturer. The scheme has involved public expenditure of around £50,000 and has realised private sector activity exceeding £500,000. The Crofting Township Development Scheme is part of the Objective 1-based Highlands and Islands Agricultural Programme. Funded by The Scottish Office the scheme is administered by the Crofters Commission. It has a budget of 0.98 million ecu over its lifetime. In addition there is the Crofter Forestry Scheme based on legislation introduced by Government which encourages crofting communities to invest in and develop forestry.

31. Summing up, we are impressed by the efforts to increase diversity which have been made at national level, for example through the Rural Enterprise Programme and the Objective 1 and 5b programmes. There has been progress in terms of the numbers of new rural businesses that have been established. Local initiatives have also been put in place and this might be a more widespread type of response to the decline of a major industry in a rural area, or indeed in advance of such a decline occurring. Care must also be taken that undue dependence on one industry is not replaced by dependence on another. Rural businesses should be encouraged to be flexible in the long term and this is where continued support in the form of training and advice is essential.