Rural Scotland Key Facts 2015

Economy and Enterprise

Industry

Figure 17: Employment by primary, secondary and tertiary sectors and in the public sector by geographic area, 2014

Source: Inter Departmental Business Register, as at March 2014
(Using Scottish Government Urban Rural Classification 2013-2014)

Primary sector industries are defined as agriculture, forestry and fishing. Secondary industries include utilities, mining and quarrying; manufacturing and construction. Tertiary sector industries are made up of wholesale, retail and repair; accommodation and food services; transport, financial services, professional, technical and administrative services; education and health. The Public sector comprises central and local government

Figure 17 shows employment in enterprises in Scotland registered for VAT and/or PAYE.
In all areas in Scotland the tertiary sector is the largest in terms of employment. Primary sector industries employ more people in remote rural (16%) and accessible rural (12%) areas, than in the rest of Scotland (0.4%).

The Public sector accounts for 18% of employment in remote rural areas and 15% in accessible rural areas, whereas in the rest of Scotland the Public sector accounts for
24% of employment.

Figure 18: Employment by industry sectors and in the public sector by geographic area, 2014

Source: Inter Departmental Business Register, as at March 2014
(Using Scottish Government Urban Rural Classification 2013-2014)

Notes:
1. 'Other activities' consists of: 'Professional, scientific and technical activities', 'Administrative and support service activities' and 'Arts, entertainment and recreation; Other service activities'.

Figure 18 shows the distribution of employment across sectors within each of the geographical areas, with workers in the Public sector shown as a single category.

In remote rural areas 'Agriculture, forestry and fishing' is the largest source of private sector jobs (16%) followed by 'Accommodation and food services' and 'Other activities' (both 13%). In accessible rural areas, 'Other activities' (17%), 'Agriculture, forestry and fishing' (12%), 'Wholesale, retail and repair' (12%) and Manufacturing' (11%) are the largest sources of private sector jobs.

'Agriculture, forestry and fishing' is a sector that shows the greatest difference across Scotland, accounting for 16% of workers in remote rural areas compared to 12% in accessible rural areas and 0.4% in the rest of Scotland. Conversely, other sectors such as 'Wholesale, retail and repair' and 'Financial, insurance and real estate' are a larger source of jobs in the rest of Scotland than in rural areas.

Business

Figure 19: Employment by size of firm and in the public sector by geographic area, 2014

Source: Inter Departmental Business Register, as at March 2014
(Using Scottish Government Urban Rural Classification 2013-2014)

Figure 19 shows that Small and Medium Enterprises (0-249 employees) account for two thirds of businesses in remote rural areas compared to 60% in accessible rural areas and just over a third in the rest of Scotland. Micro businesses (0-9 employees) are particularly prevalent in remote rural and accessible rural areas (39% and 31% respectively). This compares to only 13% in the rest of Scotland.

Large businesses (250+ employees) account for 41% of those employed in the rest of Scotland, 25% in accessible rural areas and 16% in remote rural areas.

Table 24: Percentage of small and medium enterprises by industry sector and geographic area, 2014

	Remote Rural	Accessible Rural	Rest of Scotland
Agriculture, forestry and fishing	36%	26%	2%
Mining & quarrying; Utilities	1%	1%	1%
Manufacturing	4%	5%	5%
Construction	10%	11%	11%
Wholesale, retail and repair	11%	11%	17%
Transport, storage & communication	5%	7%	9%
Accommodation and food services	8%	5%	9%
Financial, insurance & real estate	2%	3%	5%
Other activities1	20%	29%	35%
Education, health & social work	3%	3%	6%
Public	0%	0%	0%
Total	100%	100%	100%

Source: Inter Departmental Business Register, as at March 2014
(Using Scottish Government Urban Rural Classification 2013-2014)

Notes:
1. 'Other activities' consists of: 'Professional, scientific and technical activities', 'Administrative and support service activities' and 'Arts, entertainment and recreation; Other service activities'.

Table 24 shows in which industry sectors Small and Medium Enterprises (SMEs) operate, across all three geographic areas. In remote rural areas, 36% of SMEs are in the 'Agriculture, forestry and fishing' sector, compared to 26% in accessible rural areas and 2% in the rest of Scotland. The 'Other activities' sector represent 35% of SMEs in the rest of Scotland compared to 29% of SMEs in accessible rural areas and 20% of SMEs in remote rural areas.

The total number of SMEs (registered for VAT and/or PAYE) operating in remote rural areas, accessible rural areas and the rest of Scotland as at March 2014 were 19,620, 30,170 and 115,590 respectively.

Table 25: Population (16 to 74) in employment by socio-economic classification by geographic area, 2011

	Remote Rural	Accessible Rural	Rest of Scotland
Higher managerial and professional occupations	8%	12%	10%
Lower managerial and professional occupations	23%	25%	23%
Intermediate occupations	11%	14%	16%
Small employers and own account workers	17%	13%	7%
Lower supervisory and technical occupations	10%	9%	10%
Semi-routine occupations	18%	15%	19%
Routine occupations	13%	12%	16%
Total	100%	100%	100%

Source: 2011 Census, National Records of Scotland
(Using Scottish Government Urban Rural Classification 2013-2014)

The population in employment by socio-economic classification is broadly the same across the whole of Scotland. However, there are some differences within the individual socio-economic classifications.

There is similar proportion of people living in accessible rural areas and in the rest of Scotland are employed in higher managerial and professional positions (12% and 10% respectively). The proportion is slightly lower at 8% in remote rural areas.

A greater proportion of workers in remote rural areas (17%) are small employers or own account workers than in accessible rural areas (13%) or the rest of Scotland (7%).

Table 26: Business openings and closures by geographic area, 2013

	Remote Rural	Accessible Rural	Rest of Scotland
Total businesses	13,365	30,925	117,940
Business openings	1,240	3,740	16,560
Business opening rate	9%	12%	14%
Business closures	1,010	2,585	11,315
Business closure rate	8%	8%	10%
Total businesses per 10,000 adults	490	578	327
Business openings per 10,000 adults	45	70	46
Net business openings and closures	230	1,155	5,245
Net business openings and closures as % of total businesses	2%	4%	4%

Source: Inter Departmental Business Register (ONS), 2013
(Using Scottish Government Urban Rural Classification 2013-2014)

Table 26 shows the number of business openings and closures as measured by the number registering for either VAT or PAYE. It therefore excludes businesses with no employees and a turnover below the VAT threshold (£79,000 as at 1st April 2013).

All areas of Scotland showed an increase in the number of active businesses over the last year. The lowest rate of business openings was seen in remote rural areas (9%), followed by accessible rural areas (12%). Business closure rates were lowest in rural areas (8% in both remote and accessible).

The net business openings and closures as a percentage of total businesses was 4% in both accessible rural areas and the rest of Scotland. It was slight slower at 2% in remote rural areas.

The Scottish Government has a National Indicator to increase the number of businesses^[8].

Economic Activity

Figure 20: Economic activity of population aged 16 to 64 by geographic area, 2013

Source: Annual Population Survey in Scotland, January to December 2013
(Using the Scottish Government Urban Rural Classification 2013-2014)

Figure 20 shows that all indicators of economic activity are highest in rural Scotland. The economic activity rate (people employed or looking for work), employment rate (the number of people employed as a percentage of the total population of working age) and the rate of working age population that is either employed, in education or training are all higher in rural areas than in the rest of Scotland. Within rural Scotland, all indicators of economic activity are higher in accessible rural areas.

Similarly, unemployment rates (that is the number of people unemployed as a percentage of all those who are economically active, aged 16 to 64) are lower in rural Scotland than in the rest of Scotland. The unemployment rate in accessible rural areas is half the rate for the rest of Scotland.

The total number of people employed in remote rural areas, accessible rural areas and the rest of Scotland are 139,900, 336,600 and 2,004,900 respectively.

Figure 21: Employment rates by geographic area, 2013

Source: Annual Population Survey in Scotland, January to December 2013
Using the Scottish Government Urban Rural Classification 2013-2014

Figure 21 shows that the employment rates are higher for all sub-groups in rural areas compared to the rest of Scotland. Within rural areas, accessible rural areas have the highest employment rates for all sub-groups.

The highest employment rates in all areas of Scotland are for males aged 16 to 64, with the highest rate being 81% in accessible rural areas followed by 80% in remote rural areas. In the rest of Scotland the employment rate for males aged 16 to 64 is 73%. The largest difference in employment rates between rural Scotland and the rest of Scotland is for people aged 50 to 64, with substantially more people in this age group still in employment in rural areas.

Table 27: Patterns of work¹ by geographic area, 2013

	Remote Rural	Accessible Rural	Rest of Scotland
Percentage of employed males who are:
Self-employed	29%	21%	13%
Working part time in main job	16%	12%	13%
With a second job	9%	5%	3%
Homeworkers2	27%	21%	11%
Percentage of employed females who are:
Self-employed	16%	12%	7%
Working part time in main job	50%	46%	41%
With a second job	12%	6%	4%
Homeworkers2	17%	14%	7%
Percentage of all employed who are:
Self-employed	23%	17%	10%
Working part time in main job	32%	28%	27%
With a second job	10%	5%	3%
Homeworkers2	22%	18%	9%

Source: Annual Population Survey in Scotland, January to December 2013
(Using Scottish Government Urban Rural Classification 2013-2014)

Notes:
1. Includes all workers aged 16 and over.
2. Homeworkers are people who work mainly in their own home, or in different places using home as a base, in their main job. Excludes people on government employment and training schemes.

Table 27 shows that self-employment is around twice as common in rural Scotland as in the rest of Scotland. In all areas of Scotland men are nearly twice as likely as women to be self-employed. Of employed males in remote rural areas, 29% are self-employed.

Women are considerably more likely than men to work part time in all areas of Scotland, with half of women in remote rural areas working part time in their main job.

The percentage of employed people in remote rural areas who have a second job (10%) is at least double that of employed people in both accessible rural areas (5%) or in the rest of Scotland (3%).

A greater percentage of those employed in rural areas, slightly more so in remote rural areas, are "homeworkers" i.e. they work mainly in their own home or use home as a base.

Earnings

Figure 22: Residence based median hourly rates of pay^1,2 by geographic area, 2014

Source: Annual Survey of Hours and Earnings, 2014
(Using the Scottish Government Urban Rural Classification 2013-2014)

Notes:
1. Employees on adult rates whose pay for the survey pay-period was not affected by absence.
2. An urban rural classification could not be assigned to small number of entries in the Annual Survey of Hours and Earnings database - this only affects around 10 data entries for Scotland.

Figure 22 shows the median hourly wage rate for all male and female employees residing in each of the geographical areas. In all areas of Scotland the median wage for males is higher than that for females. The median wage of those who reside in accessible rural areas is highest for both males and females.

The differences in median hourly rates of pay between the different areas are greater for males than females. The largest difference is between males who reside in accessible rural and remote rural areas (£1.74 higher per hour in accessible rural areas).

Table 28: Residence based median gross annual pay for full-time employees^1,2 by geographic area, 2014

	Remote Rural	Accessible Rural	Rest of Scotland
Male	£28,859	£30,735	£28,725
Female	£24,593	£26,123	£23,710
All	£27,663	£29,016	£26,660

Source: Annual Survey of Hours and Earnings, 2014
(Using Scottish Government Urban Rural Classification 2013-2014)

Notes:
1. Employees on adult rates who have been in the same job for more than a year.
2. An urban rural classification could not be assigned to small number of entries in the Annual Survey of Hours and Earnings database - this only affects around 10 data entries for Scotland.

Table 28 shows that the median gross annual pay (i.e. before taxation and other deductions) for all full-time employees is highest for people living in accessible rural areas. This is followed by people living in rural areas and then finally those residing in the rest of Scotland. The disparity in median pay between rural areas and the rest of Scotland is greater for females than for males.

From Figure 22 it can be seen that for both males and females the median hourly rates are lower in remote rural areas than in the rest of Scotland. However, Table 29 shows that the median gross annual pay for both males and females is higher in remote rural areas compared to the rest of Scotland. This indicates that people who reside in remote rural areas are working longer hours than those who reside in the rest of Scotland.

Income

Figure 23: Annual net income of highest income householder by geographic area, 2013

Source: Scottish Household Survey, 2013
(Using Scottish Government Urban Rural Classification 2013-2014)

Figure 23 presents the distribution of net household income figures (for the highest income householder) by geographic area. The income figures include income from employment, benefits and other sources (after taxation and other deductions).

The most common income bracket for a household to fall into is the £10,001 to £20,000 category. The distribution of incomes for the highest income householder is similar in remote rural areas and the rest of Scotland; in contrast, accessible rural areas have fewer households with a net annual income under £20,000.

There is also a marked difference between the proportion of households in the £40,001 and over category in accessible rural areas (24%), compared to remote rural areas and the rest of Scotland (16% in both).

Table 29: Income and employment deprivation by geographic area, 2012

	Remote Rural	Accessible Rural	Rest of Scotland
Number income deprived	29,315	51,820	619,340
Number employment deprived	16,240	31,220	375,785
Percentage of the population that are income deprived	9%	8%	15%
Percentage of the working age1 population that are employment deprived	9%	8%	14%

Source: Scottish Index of Multiple Deprivation 2012
(Using 2010 mid-year population estimates (NRS) and Scottish Government Urban Rural Classification 2013-2014)

Notes:
1. Working age refers to male population aged 16-64 and female population aged 16-60.

Income deprivation comprises six indicators including being in receipt of Income Support or Employment and Support Allowance, Job Seekers Allowance, Working and Child Tax Credits and Guaranteed Pension Credit.

Employment deprivation comprises three indicators that identify those people that want to work, but due to unemployment, ill health or disability are excluded from the labour market. The indicators used are Unemployment Claimant Count, Incapacity Benefits or Employment and Support Allowance and Severe Disablement Allowance.

Table 29 shows that the percentage of the total population that is income deprived is lower in rural areas than the rest of Scotland, and is lowest overall in accessible rural areas.

The percentage of the working age population, as defined by the Scottish Index of Multiple Deprivation, that are employment deprived is also lower in rural areas than in the rest of Scotland.