Paying a price for rural living

When the cost of energy, fuel, transport and goods go up it leads to specific challenges in rural areas, putting rural inequality into sharp focus. As such, there’s overwhelming concern about the rising cost of living among people living in the Highlands and Islands. Residents need to cope with increasing prices on top of existing additional costs on everyday life in the region. We explore why reliable and timely evidence on the impact of the cost of living crisis in different parts of the UK is fundamental for better policymaking.

An illustration of the high cost of the living in rural living
Erin Simpson Erin Simpson
Research Executive
 

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How do you reduce your energy bill when you are already keeping the heating off as much as you can and you can’t switch energy source? How do you lower your grocery costs when you have already cut back and there’s only one convenience store nearby? How do you save on fuel when there’s no public transport and you have to drive to work?

Rural Scotland is not alone – many challenges are common to other rural communities across the UK.

That’s the situation facing many people living in the Highlands and Islands right now. Scottish Government analysis suggests living in remote rural Scotland is between 15% and 30% more expensive than the UK average71.

With less than a fifth of the population living in rural areas in Scotland, it is all too easy for their experiences to be overlooked, especially when policy interventions are framed around the entire population. But rural Scotland is not alone – many challenges are common to other rural communities across the UK too. This means that important lessons from Scotland can be drawn to help recognise geographical variations and address the challenges unique to rural communities across the UK.

Encouragingly, recognition of geographic inequalities and of variation within regions by government is increasing. For example, the Scottish Government is now required to produce a National Islands Plan setting out progress against its own commitments to improve outcomes for island communities, and recently the UK Government published its second report on rural proofing72.

But the rising cost of living puts rural inequality into sharp focus. Ipsos’ research shows there is overwhelming concern about the cost of living among people in the Highlands and Islands: our August 2022 polling found 90% of people across Scotland, including in the region, were concerned about the impact it might have on their standard of living over the next six months73. Impacts are likely to be felt more keenly in these parts of the country than in cities and larger towns, as shown in Ipsos' recent research for Highlands and Islands Enterprise (HIE)74. Reliable and timely evidence on the impact of the cost of living crisis in different parts of the UK is therefore fundamental for good policymaking.

The main themes raised by residents in our Highlands and Islands research were related to rising costs including energy, fuel, transport, and goods – and all of these have a particular rural dimension.

Rural communities face additional costs

The main themes raised by residents in our Highlands and Islands research were related to rising costs including energy, fuel, transport, and goods – and all of these have a particular rural dimension. People need to cope with increasing prices on top of existing additional costs on everyday life in the region.

When it comes to energy, our research found that half of households in the region say their home is expensive to heat and almost a fifth say it is difficult to heat. Orkney and Shetland are not connected to the gas grid and other parts of the region only have partial coverage meaning many households rely on more expensive alternatives. Colder weather in the north of Scotland increases the need for home heating, also helping to explain why Shetland Islands Council has predicted that, without support, 96% of islanders will be in fuel poverty by April 202375.

It has been suggested by the Centre for Climate Change and Social Transformations that government needs to urgently implement measures to drive environmental behaviour change and that such measures could also help address the cost of living crisis76. However, when it comes to changing fuel type or making a property more energy efficient, households in the Highlands and Islands face barriers with cost, accessing tradespeople, and infrastructure.

Such constraints may not only slow down the transition to net zero but make it even more difficult – for example, we found anecdotal evidence that some people are reverting to peat to heat their home.

Our research also found that 79% of residents said they rely on their vehicle to a large extent. This leaves people feeling the squeeze when it comes to increased fuel costs. Public transport was felt to be unreliable or unavailable, so driving was essential to get around. Separate research from Transport Scotland suggests 58% of areas in the region are at high risk of transport poverty, where people don’t have access to essential services or work because of a lack of affordable transport77. While electric vehicle infrastructure was seen to be improving there are concerns about range, so it was not felt to be a reliable alternative.

In response to increased transport costs, some residents are considering cutting back on longer trips. For those in more rural areas this means reducing the number of visits to the nearest city or to the mainland. There is a risk of people becoming isolated and missing out on important services and events.

Transport costs are a factor in the higher price of household goods too. Communities often face “unfair” delivery surcharges: postal charges in the Highlands and Islands are on average 21% higher than in southwest Scotland, that is if companies deliver at all78. Further, in some parts of the region there is only one convenience store, making it difficult to shop around for cheaper products.

If there are to be further measures that support rural realities, there might be a tension between quicker universal policies and tailored policies which take longer to develop to match the scale of the challenge in specific areas.

Addressing rural disadvantage

So, what does this mean for policymakers? There is a risk that rural communities face further disadvantage as prices continue to rise, meaning additional financial support for residents will be needed. This is challenging, in light of the announcements made in the UK Government’s Autumn Statement. While the Autumn Statement’s promise of the minimum wage rise, household energy price cap extension, pension increases, and disability benefit increases are welcome, there were no specific offerings for rural communities.

If there are to be further measures that support rural realities, there might be a tension between quicker universal policies and tailored policies which take longer to develop to match the scale of the challenge in specific areas. For example, we saw during the COVID-19 the difficulty of tailoring interventions to changing local circumstances.

Short to medium term solutions require resources to encourage uptake – for example, helping people make the switch to available greener technologies while in the grip of a cost of living crisis.

Longer term there is ambition to ensure rural communities across the UK are attractive places to live and work. In the Highlands and Islands there is a particular ambition to address population decline. Making the region an attractive and affordable place to live and work requires not only help for people to deal with immediate cost increases but also addressing the root causes of existing additional costs – whether that is access to services, public transport, or housing.

The current crisis is a reminder that it is crucial for policymakers to recognise variation within regions and work with local communities to understand the priorities for their area, and deliver on them.

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