POLICY-MAKERS could do more to encourage the economic potential of rural areas, say experts.

The economic potential of the countryside is often overlooked, suggests the policy and practice note from the Centre for Rural Economy at Newcastle University.

Rural areas contribute at least £211billion a year directly to the English economy but have great potential to achieve even more, it says.

Published by the university's Rural Economy and Land Use Programme, recommendations within the document are aimed at policy-makers at both a national and local level.

"Rural growth measures have been more fully developed for the land-dependent sectors of farming, forestry, food and environmental services," says the document.

"While these are important for the nation, in many rural areas we need to look to other sectors that are the primary engines for growth.

Effective and transparent rural proofing of growth plans and policies across all business sectors is needed in order to tailor measures to rural conditions, the note recommends.

"Rural economies should be treated as cross-cutting and embedded in mainstream policies and plans for economic development," it says.

At a national aggregate level it is easy to overlook important differences in urban and rural businesses and labour markets.

But a closer examination at a finer scale reveals important variations in spatial, sectoral and size profiles – in other words, one size does not fit all.

The report says there is also a need to demonstrate ways firms can realise the value of the natural environment to business growth, by securing efficiencies and developing products and services.

"A tailored, place-based approach is required, meeting local constraints and opportunities.

"Strategies for growth must respond to local variability and drive resources to rural economies at local level."

The report says a review of the needs and opportunities for rural and home-based micro-enterprises would complement the review of mid-sized firms within the Government's Plan for Growth.

"Rural households and communities form the bedrock of our rural firms, and bolster their innovative capability and resilience.

"This is particularly apparent in times of economic pressure. Strengthening local business and community institutions and facilitating community engagement will pay dividends."

Investment in affordable housing and local services is essential for employee recruitment and new business development, the report warns.

The full document can be downloaded here.