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Developing rural services

Part 1
Local services in rural areas


1.2 New contexts, new challenges


Presently, profound changes are taking
place at the economic, demographic,
institutional and technological level
with decisive, and at times conflicting,
implications for local services in rural areas.


1.2.1 The new economic context

Historically, there have been two successive and contradictory types of evolution relating to services in rural areas:

  • Firstly, there was a tendency to bring services closer to the people by installing basic services in villages, e.g. schools, post office services, health care, electricity and water supply etc. This trend, based on the planning policies for rural areas, was predominant in the 19th century and first half of the twentieth century;

  • Then, with the development of new means of transport, the first trend was replaced by another, which is inclined to concentrate services away from town centres. It is based on the search for reduced costs and greater efficiency and is often accompanied by an improvement in the general quality of services.

As a result, in the sector supplying local services, there is a general trend to concentrate services:

  • in terms of the size of service production units. In most European countries, for example, the distribution sector is dominated by hypermarkets;

  • in terms of area, through the grouping together of service supply centres in towns and surrounding areas, rather than through an area-wide distribution logic.

Against a background of growing competition, the tendency to concentrate services responds to the need for greater competitiveness between services, notably via:

  • the search for higher levels of productivity bringing about reduction in the cost of production and in the price paid by the consumer;

  • easy access to consumers, making it possible to reach more people and, as a result, to generate considerable economies of scale;

  • the provision of services with an improved degree of performance. In the health care sector, for instance, large hospitals have put in place special high technology services and, as such, can provide highly technical and secure services in mother and child care, intensive care, specialised surgery, etc.

Concentration in terms of size and space, therefore, brings about a more competitive value for market services, endangering geographically scattered and small sized service suppliers, as in case of rural areas. The latter are obliged to concentrate on particular services in such a way as to overcome the competition of concentrated services:

  • by taking advantage of the remoteness of rural communities from urban service centres (the further away from urban centres the greater the advantage);

  • by promoting quality criteria that concentrated services could not easily provide, notably, more human than technical criteria such as human contact, the social environment, etc. which form a particularly important dimension in the sector of local services.

Evolution, therefore, has important implications for the supply of services in rural areas. It very often forces the functioning and organisation of services to be totally revised. To this end, there is often a search for forms of complementarity, combination or indeed association agreements, regarding representation and distribution networks for instance, with services situated in towns.

Nevertheless, the general tendency to concentrate services is today being called into question in certain areas of service provision. Additionally, a closer relationship with consumers is progressively being sought. This is the case with services provided at home for the elderly or the sick, or libraries and information centres, etc. in the form of mobile or teleservices. Also, certain services such as sporting and cultural services, tend to follow the population distribution in an area, even in very small districts, because every local administrative authority is required to provide a minimum of such services.

Another important aspect of the economic evolution in recent years is the increase in under-employment, making the fight against unemployment a political priority in both urban and rural areas.

Local services are often considered as an unexploited source of employment. To this effect certain policies at the European Union and individual Member State level aim to provide frameworks that are adapted to the search for innovative solutions, notably through a combination of official support and consumer participation, in order to cater for unsatisfied demand.


1.2.2 A new demographic context

The demographic evolution of rural areas obviously has a decisive impact on the supply, demand and organisation of services. Today, this evolution has three characteristics, i.e.:

  • rural depopulation;
  • population movements within rural areas;
  • settlement in rural areas by new categories of people.

a) Rural depopulation

Rural depopulation is an ancient phenomenon which has intensified since the Second World War, leading to a demographic context that is much less favourable to retaining local services. As a result, services whose sustainability requires a minimum threshold of local users have tended to disappear thus accelerating the depopulation process.

According to a survey conducted in 1997 in England (United Kingdom), out of about 9,500 parishes with less than 1,000 inhabitants, 42% no longer had shops, 43% no longer had a post office, 49% no longer had schools, 75% had no daily public transport, 56% had no petrol filling stations, 91% had no day care service for the elderly and 92% had no police station. In order to do their shopping, rural families without private means of transport (20% of the population) had to travel a distance of 35 kilometres per week as opposed to the 20 kilometres made by an urban household in similar circumstances.

In France, 1,050 mayors of small districts (with less than 1,000 inhabitants) replied to a questionnaire drawn up in 1996 by the Institut Mairie Conseils. Twenty-six percent were of the view that the local services supplied in their districts were satisfactory, 56% thought the services were barely sufficient and 3% were totally dissatisfied with the services. The smaller the population of a district, the less satisfied it is with the services. The services that the mayors most fear will disappear locally are, in descending order, the post office (for 21% of the mayors), the village shop (11%), the railway station (11%), a primary school (9%), the hospital (7%) and the pub (3%).

The services that are most lacking in the small rural districts are a shop (28%), public transport (19%), health care services for the elderly (10%), a crèche and a day nursery (7%) sporting facilities (5%), a pharmacy (5%) and a youth club (4%).

b) Population movements within rural areas

The migration of people can also take place within the rural areas themselves. Today, small villages are increasingly being deserted for the benefit of market towns where services tend to be concentrated. The trend is exacerbated by the fact that a majority of the active rural population in much of the European Union is today made up of wage earners who are less attached to a specific place than farmers, who represent only a small part of the active population.

In countries where districts have been grouped together such as Sweden, the population tends to concentrate around service centres. The phenomenon is a cause for concern because these population movements are especially made up of younger people with a higher level of education.

c) Settlement in rural areas by new categories of people

Another aspect of the evolution of the rural demographic context, especially in recent years, is the settlement in rural areas by new categories of people, e.g. old age pensioners, commuters, unemployed people from the towns, etc.

In France, the elderly move to rural areas more than any other age category. The 55-69 age group forms 42% of departures from urban areas. From the age of 70 years onwards, mobility is motivated by the search for proximity of services and equipment, which implies a certain return to urban areas [1]. Presently, the rural population is distributed as follows [2]:

  • 50% of the rural dwellers were born in the rural areas and have never left;

  • 27% of the rural dwellers are originally from rural areas but have spent part of their lives in towns and then returned to the rural areas;

  • 23% of the people living in the rural areas are newcomers, i.e. people from the urban areas who have settled in the rural areas.

The newcomers are an opportunity for repopulating the villages and maintaining or recreating services in the rural areas. To this end, some districts operate a policy aimed at enticing people to settle in rural areas, such as the provision of housing and specific services for the elderly, etc.

In Upper Swaledale (England, United Kingdom), the population in the village of Muker has risen by 23% in 4 years, thanks to the reinstatement of a multi-service centre catering for the elderly and providing child care, sporting and leisure amenities for young people, meeting rooms, etc [3].

d) Qualitative changes

Demographic changes also occur at the qualitative level, if the changes in lifestyles, activities, forms of social and family organisation, etc., are taken into account. Along with these changes, the notion of need also varies. Basic needs, whose importance was essential in the past, have now been relegated to a secondary level (except for the poorest people and families). Today there is, in general, demand for new types of services, which attaches greater importance to the quality and form of the services, notably in terms of the modes for use such as timetables, accessibility, flexibility, personalisation, possibility to be assisted at any time even for remotely located consumers, etc.

Some of the changes in demand in the last 20 years constitute employment generating opportunities in the services sector. As a result, there is a growing tendency to delegate certain tasks which, traditionally were performed within families. The tasks:

  • are linked to baby-sitting, assisting school children with home work, assisting the elderly, care for sick people, etc.;

  • relate to specific domestic chores such as laundry, ironing, preparation of meals, etc.

This new type of demand has brought about an enlargement and diversification in the range of services, and at the same time sought to establish functional complementarity. In the past, for example, the problem of the elderly was solved via the creation of collective housing structures e.g. old people’s hostels and homes, for those who were not being cared for by their families. Today, there is a propensity to keep old people in their homes. This trend is associated with the use of distance forms of assistance such as delivery of cooked meals, etc., combined with one-off services supplied by specialised centres. Currently being developed, particularly in the Scandinavian countries, are services that combine assistance for people of different age categories e.g. the elderly and young children, thus paving the way for the recreation of social links and providing a service with a more human face.


1.2.3 A new institutional context

The sharing of responsibilities and activities between the public, private and not-for-profit sectors is also undergoing profound changes.

Traditionally, a public service was expected to be accessible and identical for all the citizens, irrespective of their place of residence. Organised according to public interest, inexpensive for users (sometimes free-of-charge), public services were for a long time one of the main mechanisms for redistributing national wealth and a symbol of equality. Today, the relationship between the state and the citizen is four-dimensional in terms of service delivery, i.e.:

  • privatisation and deregulation of services so that they can also be supplied by the free market;

  • outsourcing of service provision (notably for people) to external operators (private or not-for-profit) with the public authorities maintaining general planning functions;

  • financial contributions that users are asked to make to cover a substantial part or indeed the totality of costs in return for adapting services to meet new quality demands and diversifying the range;

  • discontinuation of non profitable services, leaving local partners the freedom to reorganise the services according to the local conditions.

a) Privatisation and deregulation

Privatisation and deregulation of services formerly supplied by the state engender specific effects on rural areas due to the structural characteristics particular to rural areas, e.g. the scattered nature of households and businesses. The market mechanisms progressively gaining ground can function only if there is a minimum concentration that ensures a sufficiently attractive economic interest for the suppliers of the service. In the rural areas where these conditions do not exist, basic services are either abandoned or tariffs are increased in relation to distance.

Nevertheless, where the local authorities are dynamic, these policies could be opportunities for new forms of collaboration and consultation at local level.

In the county of Angus (Scotland, United Kingdom), following the privatisation of public transport, transport provision in rural areas has considerably diminished, leading to situations of isolation for people without private means of transport. As a result, the LEADER group, in partnership with the municipal authorities and some local associations, has set up a service organised around already existing means of transport such as milk, mail and school vans. This service is run by a full-time worker and conducted on the ground by associations who register the requests for transport and facilitate contacts. The mobilisation of the different entities (the post office, dairy, etc.) was made possible through municipal support. Deregulation also has an impact on service delivery to businesses. Certain forms of intervention in this sector serve as a reference to local services.

In Scotland (United Kingdom), the Stirling LEADER group, managed by a local development body, has encouraged businesses in rural areas to group together to purchase gas and electricity, so as to obtain more advantageous financial conditions from the newly privatised companies supplying the services in question. In addition, a consultant has been contracted to study the possibilities of saving energy and of reducing the harmful effects of energy on the environment.

b) Outsourcing to external operators

Outsourcing to external operators is conducted, in certain cases, through sub-contracting or service supply contracts of a fixed duration. In most cases, these contracts are concluded through the establishment of regulatory frameworks or invitation to tender procedures.

The tendency to outsource to exernal operators the provision of certain services, hitherto supplied by the public sector, has given rise to the emergence of new structures and public/private relationships. The public sector now plays the role of designer and guarantor of service quality, and the private sector that of supplier/executor in a cost/profit perspective.

In Italy, in the 1980s, it was recognised that volunteer organisations, social co-operatives, associations, etc. were providing public utility services, notably for population groups in difficulty. As a result, negotiations lasting more than ten years were undertaken during which the organisations concerned grouped together to form a national lobby. The process led to the promulgation in 1991 of law 266/91 on social organisation, and law 381/91 on social co-operation. As a consequence, in Italy today, there are 2,000 social co-operatives, composed of remunerated and voluntary workers. The co-operatives are usually born of the desire of a group of citizens to respond to a local need, or of local authorities to sub-contract a service provided by the local authorities themselves in the past. Each social co-operative is managed by its remunerated and voluntary workers. This democratic form of management enables the co-operatives to maintain good collective vitality and to tackle local problems that too often are not fully taken into consideration. The concession of markets is accompanied by clauses on modes of quality control.

However, the social co-operatives have noticed that the markets outsourced by the state do not generate real possibilities for viable activities unless demand is sufficient. As such, the co-operatives are based especially in the towns. In the rural areas, a sufficient level of demand was reached thanks to the creation of consortiums bringing together several areas, making it possible to overcome the limits of local markets.

In other cases (for example Sweden, a country where the grouping together of districts has been considerable), outsourcing has been realised through support for the formation of local autonomous groups, capable of organising and delivering services to the population according to local demand and in replacement of services formerly supplied by the districts. This approach is based on public financing and on a strong mobilisation of voluntary work (see sheet M19 of the directory “Innovative actions of rural development”, LEADER European Observatory, 1997).

Sub-contracting can sometimes be a problem in terms of the durability of services supplied by non-public structures. The success of the sub-contracting system depends on the public authorities’ capacity to finance the sub-contracted functions in the long-term and/or on the capacity of the sub-contractors to generate, through their action, sufficient demand. In the case of Italian social co-operatives, grouping together in a wider geographical area, for example at the regional level, has enabled them to consolidate their presence in certain services sectors by becoming structures with a capacity to provide a service at good value for money.

c) Financial contribution by the consumers

This contribution brings about diversification of supply and improvement in the quality of certain public services, thus placing them on the same level as private services. It also ensures that supply does not concentrate solely on the most solvent clients, thanks to social redistribution mechanisms.

With a view to diversifying the range of leisure services for young people, the municipality of Castel San Pietro (Emilia-Romagna, Italy) has undertaken to organise every summer, in collaboration with sports organisations, youth centres and parishes, and with the financial contribution of the consumers, a full programme of activities for young people aged between 3 and 16 years old. The programme covers sporting and cultural activities, nature discovery activities, language tours in France, England and the United States, which are sometimes fully financed by the users. With regard to child care, the town has introduced new paying services such as games, crèches, flexible day care services, etc. For all these services, the financial contribution from families is means- tested.

d) Discontinuation of non-profitable services

This tendency is a result of the shift from a concept of service access for all, to one of efficiency/rationalisation in the supply of the services. In this perspective, the discontinuation of services appears to be the most immediate and efficient solution. Consequently, post offices, train and bus services have gradually been discontinued in the rural areas due to pressure from the rationalisation of public expenditure and new ways of organising the area. Nevertheless, in certain cases and for certain types of services, notably social and cultural services, the state has been encouraging people to find alternative solutions of self-management, through awareness-raising campaigns and provision of funding to this effect.

In Sweden, following the process of grouping districts together, a national campaign (“Hela Sveriga Ska Leva - All Sweden shall live”), was launched in the early 1990s encouraging Swedish citizens to participate more actively in the organisation of community and social services in the villages by forming local groups. In 1998, 3,500 local groups were active in rural areas and have taken charge of developing local services. Their task is to find solutions adapted to the very low population density in those areas. The groups rely mostly on voluntary work but also generate a considerable amount of investment and several thousand waged jobs.

However, certain policies designed at the national level with the aim of improving the quality of life can contribute to the deterioration of the situation for rural communities, if they are not accompanied by specific measures.

In the United Kingdom, the Royal Commission on Environment Pollution in 1994 recommended an increase in the price of petrol in real terms between 1995 and 2005 until the price had doubled, with a view to reducing the use of privately owned cars. The Environmental Change Department at Oxford University conducted a study on the problem of transport and poverty, thus creating the concept of “travel poverty”, suggesting that the policies aimed at reducing vehicle emissions should be concentrated above all in the areas where public transport services are sufficient. Policies aimed at assisting the poorest, especially in the rural areas, should focus on putting in place adequate bus services. This could be done using the revenue generated by the increase in the price of petrol.


1.2.4 A new technological context

The advance in information and communication technologies that has taken place in the last twenty years has made it possible to overcome partially or totally certain constraints that are particular to the rural areas and, as such, to reduce the obstacles in relation to towns:

  • in terms of distance - in the LEADER area of Rajupusu in Finland for instance, a telematics network enables the inhabitants of small isolated villages to access official forms, for obtaining official certificates, building licences, etc., to fill them in and return them without having to travel to town. The points of access to these services are situated in the village shops. The shopkeepers concerned are trained in the supply of the services. The project is an outcome of an agreement between the government, municipal authorities and shopkeepers. Apart from maintaining people in rural areas, the objective of the project is to encourage rural shopkeepers to diversify their field of activity;

  • in terms of scale - the threshold necessary for making certain services viable can be reduced. A publication service, for example, requires considerable investment and, therefore, a relatively large market that can only be found in town. Thanks to micro-computer facilities, this service can function on a minimum amount of equipment and, consequently, adapt itself to a smaller market. Modern technologies can even produce a small print run, of a newspaper for example, at a unit price that is hardly different from that paid for newspapers printed in greater numbers;

  • in terms of quality - thanks to new technologies, quality constraints linked to distance are being done away with. By virtue of the Internet, a country doctor, for instance, can have information and technical assistance that would enable her/him to supply a service of a quality that is nearly equivalent to that of an urban medical practice staffed with several specialists. In the medical field, however, these new technological possibilities do not necessarily compensate for the growth in regulations and for consumers’ heightened expectations as far as quality of treatment is concerned. For reasons of safety, for instance, maternity centres tend to be concentrated in urban areas, near hospitals.

Use of certain new technologies can sometimes be problematic in terms of cost, which is often prohibitive for remote areas with a low population density. The level of expected technological advancement should, however, make it possible to progressively overcome this problem in the future.


1.2.5 Diversity of local contexts

Economic, demographic, institutional and technical changes occur in different forms depending on the country and area. As such, there are considerable differences depending on the density and distribution of the population and depending on how far away they are situated from urban centres:

  • depending on population density and distribution - the obstacles encountered in providing services to the population are very different depending on whether the population density is above 80 inhabitants per km2 or below 10 inhabitants per km2. But more than the average population density, it is the geographical distribution of the population that is decisive. In an area with a low population density for instance, the people may be in particular places e.g. market towns, which supply a whole range of services to rural communities. In general, there is a direct relationship between the size of a parish and the number of services available, as shown by the following survey conducted in England.


    England: the commercial presence
    based in the parish's rural size
    Size of parish Parishes with at a least one shop
    0-99 inhab. 8%
    100-199 inhab. 18%
    200-299 inhab. 33%
    300-499 inhab. 51%
    500-999 inhab. 78%
    1000-2999 inhab. 96%
    3000-9999 inhab. 99%
    Total 58%

    Source: “1997 Survey of Rural Services”, The Rural Development Commission.


  • depending on the distance from urban centres - a rural area situated near a town is subject to greater competition from services supplied by the town and greater demographic pressure, e.g. a large number of commuters, old age pensioners, etc. In this context, the development of local services is a major challenge in the effort to prevent the area from becoming a “dormitory zone”. In this regard, the introduction of services adapted to the demands of newcomers and of an acceptable quality of life that enables the area to compete with the services supplied by the town nearby, could form a basis for recreating local vitality.

On the contrary, in the areas that are situated far away from towns or to which access is difficult, and for which the absence of a demographic critical mass is a real handicap, the problem of prioritising the services to be maintained arises in two different ways:

  • in terms of the essential services to be maintained in order to avoid depopulation;

  • in terms of the development of specific services aimed at catering for or attracting certain categories of the population, e.g. young couples, the elderly, etc.


[1] Source: INRA, INSEE: Les campagnes et leurs villes
- Contours et caractères 1998 - p. 62

[2] Source: Association des Maires de France

[3] Source: Ruralfocus -
Rural Development Commission -
Spring 1998 p.24

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