1. Examining the impacts of the
recession on the economies and
communities of rural Wales
A research project undertaken by the WRO between April 2009 and Oct 2009

2. Introduction
• Background
– The Wales Rural Observatory was commissioned by the Rural
Policy Unit of the Welsh Assembly Government (WAG) in April
2009 to undertake research on the impacts of the current
recession in rural Wales.
• Objectives
– to examine the economic, employment, housing, welfare and
social consequences of the recession in rural areas, with a view
to comparing the rural situation with that in other parts of Wales.
– explore the differential sectoral, social and spatial impacts of the
recession within rural Wales.

3. Methodology
• Defining Rural Wales:
- For the purpose of the report,
rural Wales was defined as all
local authorities in Wales with
a density of fewer than 150
residents per square kilometre.
• The study involved two stages of enquiry:
- temporal and spatial analyses of relevant data
- semi-structured interviews with representatives of
organisations with a specific rural remit in Wales

4. Methodology
• Stage 1 - Temporal and spatial analyses of relevant
data:
– house prices, housing affordability, property completions,
housing need, property repossessions, homelessness,
unemployment, Job Seekers Allowance (JSA) claimants, job
vacancies, debt and other welfare enquiries, and business
insolvencies.
– Where possible, data were analysed based on a fixed
period between the first quarter of 2007 and the first quarter
of 2009.
– Data were also examined at different spatial scales to
compare the rural and non-rural situations
(NUTS3, LA, Ward).

5. Methodology
• Stage 2 - Semi-structured interviews:
– Of the 50 organisations contacted, a total of 37
agreed to be interviewed as part of the research.
– The interviews explored in greater detail the impacts
of the recession on different economic sectors, social
groups and places within rural Wales and, where
possible, compared the rural and non-rural situations
– Valuable evidence and commentary was provided by
a range of relevant economic, employment, housing,
welfare and social / health organisations

6. Findings
1. The economic position of rural Wales
2. The rural housing market
3. Welfare and advice
4. Impact on rural communities
5. Policy Implications

7. 1. The economic position of rural Wales
(a) Economic Performance
– Gross Value Added (GVA) is used as a broad indicator of
economic performance
– Problems using GVA
Table 1: GVA per head and GVA per head indices in Rural Wales
NUTS 3 Area
GVA per head,
2006
Index of GVA
per head, 2006
(UK=100)
UK 19 430 100
Wales 14 226 75
Isle of Anglesey 10 560 56
Gwynedd 12 972 68
Conwy and Denbighshire 11 529 61
South West Wales 11 711 62
Powys 13 258 70
Monmouthshire and Newport 18 537 98
Source: Office for National Statistics (ONS)

8. (b) Economic Activity and Employment
- Rural Wales - relatively high economic activity rate and low
levels of unemployment compared to rest of Wales
- Job Seekers Allowance (JSA), the UK’s main
unemployment benefit

9. (b) Economic Activity and Employment
Total JSA claimants
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Residencebasedproportions
Rural Semi Rural
Valley Urban
Wales United Kingdom

10. (b) Economic Activity and Employment
– High levels of employment in the service sector
 public administration, education, health, distribution, hotels and
restaurants = 54%
 agriculture accounts for only 5.5% of rural employment in Wales
(Nomis, 2008) and its contribution to total Gross Value Added (GVA) in
rural Wales is marginal, at only 2%
– The number of job vacancies per JSA claimant is
decreasing in rural Wales

11. (c) Sector-specific evidence
• SMEs and the current recession
- Small businesses prevalent in rural areas experiencing financial difficulties
- Loss of business impacts on the community
- Long-term impacts likely - difficult for rural enterprises to recover
• The agricultural sector in rural Wales
- Recently experienced problems caused by diseases and major retailers forcing
down food prices
- Fared better than other industries during the recession
- Economic viability of dairy sector challenged
• Tourism in rural Wales
- 5% reduction in tourist trips by residents in the UK to Wales + 12% reduction in
spend
- Uncertainty about the future and fear over job security had led to fewer people
taking holidays
- Business travel had fallen significantly during the recession as corporate budgets
were tightened

12. (d) Labour market Earnings
Mean weekly earnings by local authority of residence, 2009
0
50
100
150
200
250
300
350
400
450
500
MonmouthshireTheValeofGlamorgan
Cardiff
UnitedKingdom
Newport
Wrexham
NeathPortTalbot
Flintshire
Wales
Pembrokeshire
Swansea
Torfaen
Bridgend
Anglesey
PowysRhondda,Cynon,Taff
Carmarthenshire
Caerphilly
Conwy
Denbighshire
MerthyrTydfil
Ceredigion
Gwynedd
BlaenauGwent
(£)MeanWeeklyEarnings

13. (e) The youth labour market
– “We’re just creating a situation where our young people are left with no sort of
career route at the ages of sixteen or seventeen and can’t claim benefit until
they’re eighteen.” (Careers Wales)
(f) Older Workers
– “We’re now dealing with a lot of enquiries from older workers about loss of
contributions and earnings, pension funds losing value significantly, savings
producing reduced levels of income, and all the difficulties that you’d associate
with all these things, in terms of meeting above inflation rises in fuel and food
costs.” (Age Concern Cymru)
(g) Migrant workers in rural Wales
– Migrant workers accounted for a greater proportion of the working
population in rural areas of Wales than urban and valley regions
– The jobs that migrant workers are doing are predominantly low skilled
manual positions
– Current slowdown in migrants entering the country resulting in hard to
fill vacancies

14. 2. The rural housing market
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
AverageHousePrice(£)
Wales Region
Rural
Semi rural
Valley
Urban
Average house prices by region (January 1995 – January 2010)
• House prices decreased throughout Wales between February 2008 and
February 2009 – highest falls observed in rural and valleys authorities
• But, recent changes have had little impact in the affordability of
housing in rural areas
(a) Impact on rural homeowners

15. (b) Impact on housing development and supply
Developers and builders:
• Construction industry currently accounts for 9.7% of all jobs in rural
Wales (Nomis, 2008)
• Substantial decline in construction activity, with knock-on effects on
employment levels within the sector
• Calls for greater emphasis on repair and maintenance work – WAG
Welsh Housing Quality Standard

16. (b) Impact on housing development and supply…(cont.)
New housing development and reinvestment:
• Evidence of limited flexibility in the rural housing market
• Higher interest rates / lack of credit impacting on housing association
budgets
• Over-reliance on private sector to provide affordable homes via the
planning system.
• Urgent need to widen scope of housing products to address demand /
support transactions across tenures

17. 3. Impact on welfare and advice services
(a) Evidence of increased demand for housing services, debt
advice and benefit enquiries as a result of the recession:
Rates of recession related enquiries to Citizens Advice
Cymru (April 2008 – March 2009)
Mortgage/secured
loan arrears issues)
Redundancy
issues
Jobseekers
Allowance
issues
Rural 83% 196% 117%
Semi Rural 11% 134% 104%
Valley 37% 160% 116%
Urban 44% 197% 174%
Source: CAB (2009) http://www.citizensadvice.org.uk

18. Changes in recession related enquiries to Shelter Cymru between the first
quarter of 2008 and the first quarter of 2009
Comparison Q1 08 to Q1 09 RURAL SEMI RURAL VALLEY URBAN
Homelessness -11.4 -17.0 -7.8 -14.5
Rent arrears 1.7 5.9 3.1 -9.4
Mortgage arrears 4.7 5.3 2.0 5.3
Rents/rent levels 1.0 -0.2 0.4 0.8
Other financial 1.8 0.5 2.9 11.2
Domestic violence 0.3 0.0 0.0 0.0
Household dispute -0.2 0.0 0.0 0.0
Neighbour friction -1.3 0.0 -0.2 1.1
Violence outside home -0.2 0.0 0.0 0.0
Dampness/disrepair 2.0 0.2 2.7 5.1
Unsuitable accommodation -0.3 0.0 0.3 1.7
Landlord possession action 1.6 1.0 2.5 2.2
Harassment/illegal eviction -0.6 0.0 -0.2 0.4
Tenancy ending -0.2 0.3 0.8 1.1
Deposits -0.3 -0.5 0.5 2.8
Landord/tenant - other 0.2 -0.2 0.6 1.3
Children Act 0.1 0.0 0.0 0.0
Medical/health -0.2 0.0 0.0 1.1
Red = Rural increase and Blue = Rural Decrease
Source: Shelter Cymru (2009) http://www.sheltercymru.org.uk/shelter/policy/default.asp

19. Anecdotal evidence from interviews:
• Increased demand for welfare and advice services across all socio-
economic groups
• Unemployment and increased personal debt increasingly associated
with mental and physical health problems
• Breadth of individuals impacted wider than just those who have lost
their jobs
• Significant barriers to help-seeking within rural communities

20. (b) Impact on older people
• 27.2% of the rural population aged over 64 (ONS, 2007), a large
proportion (60%) of this age group live alone (Census, 2001)
• Retired rural residents hit hard by economic downturn:
- rising prices / inflation
- issue of ‘pride’
- loss of rural services
• 2011 Census Projections indicate that population in rural Wales will
increase from 986,000 in 2006 to over 1 million, with greatest
proportional increase likely to occur within pensionable age range
• Implications for rural society and economy?

21. (c) Impact on families and children
• Financial / personal well-being of families and children
highlighted as a key area of concern:
- unemployment / reduced incomes
- threat of repossessions and declining housing conditions
- sharp rise in cost of basic food items
- rising energy prices
- increasing levels of personal debt
- increasing levels of stress / health
• Housing debts and risk of evictions may translate into future
extra demand on children’s services, social and care services

22. 4. Impact on rural communities
(a) Loss of rural retail services
• Rural retailers affected by tightening h’hld budgets
• Social enterprises / co-operatives – key role to play in preserving
services essential to sustainability of rural communities
• Impact of further cuts in public spending?

23. (b) Cost of fuel and heating oil
• Fuel poverty identified as a major issue in rural areas:
- increased costs / limited choice
- higher than average length of rural journeys / poor public
transport provision
- higher distribution costs for rural services / businesses

24. 5. Policy Implications
• Targeted investment in age-specific advice and counselling services
urgently required
• Young people’s needs may be broader than education and employment
• Employment and training support should be maintained and expanded to
help more disadvantaged people overcome information, skills, transport or
childcare barriers to work
• Calls were made for improvements to banking services and credit
availability in rural Wales
• WAG should give further consideration to the challenges facing small
businesses in rural Wales, and consider improvements to the business
infrastructure in these areas
• new approaches are needed to support older people hit hardest by the
downturn in the economy
• tourism businesses may need to respond to current challenges by improving
the quality of the service they provide