Rural Community Businesses Hold The Key To Renewal But Remain Overlooked

New research from Plunkett UK reveals that rural community-owned businesses are already delivering social, economic and environmental benefits that align directly with government ambitions – yet they remain under-recognised and under-supported in doing so.

Plunkett’s annual report, Community Ownership: A Better Form of Business, shows that the sector has grown by 59% over the past decade, defying the trend of economic decline in many rural areas.

There are 828 community-owned businesses now trading across the UK – from shops and pubs to farms and fisheries – and each provide essential services to over 2 million people, employing 5,000 staff and mobilising 20,000 volunteers.

Together, community businesses generate a £166 million annual turnover, reinvest £2.4 million of profits into local initiatives, and contribute an estimated £437 million in gross value added to the UK economy. They are, says Plunkett, “doing exactly what government says it wants to achieve” – driving inclusive growth, boosting pride in place, and empowering local decision-making.

However, the charity warns that this success is being achieved in spite of, not because of, government support. Plunkett’s research shows that “the sector is now at crisis point with the worst confidence levels we have ever seen” – 32% of community businesses are only just surviving and 2% are at risk of closure.

The report identifies barriers such as high National Insurance, VAT and Business Rates, which limit these businesses’ ability to employ staff and expand their community impact. Meanwhile, a lack of direct funding, following the closure of the Community Ownership Fund, is preventing community groups from being able to realise the dream of taking ownership and saving a local business or asset; despite attempts to strengthen community right to buy regulations.

James Alcock, Chief Executive of Plunkett UK, said:

For too long, governments have overlooked the vital role of rural community businesses in tackling isolation, maintaining local services and creating economic resilience. With almost 150,000 members investing £77 million of their own money, these businesses embody the inclusive growth that government wants to see. We urge ministers to recognise and back this proven model, and to work with Plunkett to ensure their initiatives are reaching rural areas, where there is a track record for long-term sustainability.

The report, which was launched at a Parliamentary Reception on Monday (3 November), concludes with practical policy recommendations to help government unlock the full potential of the sector – supporting its mission to double the size of the co-operative economy, empower local communities, and revive rural areas long left behind.

Read the full report here