How does BPS affect Rural Estates?

With Brexit heralding a change in the Common Agricultural Policy and subsidies switching from size to protecting land, water and air, there will need to be a distinct change from historical farming activities to new ones to help reduce the consequent negative financial impact on farms in England.

To ease this transition, agricultural subsidies (BPS) will be phased out over seven years, beginning in 2021 and new payments for environmental services will be tested in pilot projects.

As a result, there will be a significant and fast restructuring of agricultural farm assets over the next 25 years, meaning the need to diversify becomes even greater by both farmers and estate owners.  

Future Diversification and new opportunities

The new agricultural focus will be on benefits to climate, ecosystems and access to the public. Aided with Government support grants, available funds will be considered for restoring heritage buildings and or enhancing landscape beauty alongside tourism experiences. One current example in Northern Ireland, the tourist board has introduced capital grants up to £40,000, to improve the attractiveness and booking capability of Northern Ireland’s visitor experiences.

Such monies could help sustain farms whilst also boosting tourism, this last aspect will be generally welcomed by national and regional tourism concerns, given their own agendas for shifting traffic away from existing “honeypots” such as major cities and towns to rural and coastal regions.

Take existing property assets on rural estates as an example, appraising existing use with future need may lead to a decision to create new farming operation hubs, shared occupation units and goods services. With the uncertainty and unknowns of Covid-19, rebuilding businesses will mean rebalancing to focus on what produces an acceptable return.

Whatever estates do will require planning, research and careful evaluation as owners and their teams need to work together to bring an entrepreneurial approach to the development of new income streams. Combined with high-quality local enterprise this could lead to a combination of improved margin for trading businesses, an enhanced rent roll and most importantly, a sustainable estate business in the longer term for the next chapter of an estate’s life.   

With the UK visitor economy before Covid-19 worth in excess £130b per annum, it is important that estates carefully evaluate all diversification opportunities.  Dependant on market supply and demand, there are a number of ideas for rural estate businesses to consider.  

So what sort of ‘assets’ are we referring to and as examples, listed below are a number of commercial ideas which Estates may wish to consider.  

Parkland/Pastures 

• Monthly or seasonal brand activation events i.e. food, drink, etc    
• Outdoor pursuits i.e. Off-road driving courses, team building activities.   
• Classic Car shows, Caravanning and Motorhome shows

Conversion of redundant farm buildings (i.e. dormant barns)

• Into a Wedding venue
• Creating ‘meeting’ space for events like company away days and personal development training

A sample of current and successful ‘Diversification’ projects

Cowdray House

Exclusive use of the 22 bedroom house

Deene Park

Walled Garden ‘wedding venue’

Knepp Wildland Project

Re-wilding project in West Sussex  

How can Estates maximise such opportunities?  

Initially, it will be essential to conduct a market and qualitative research study to assess which ‘underutilised dormant assets’ could be commercially exploited which could deliver a measurable return of investment. From GFG’s extensive experience in evaluating such assets, the first stage of a ‘One Day observational audit’ is to review:

• Land availability and best use of that
• Any existing leisure use and maximisation/ abandonment of the same
• Existing and future supply and demand issues
• Potential opportunities and gap assessment
• Size and extent of opportunity and
• Initial Cost and benefits.

Our consultants

Since 2007 we’ve engaged numerous Consultants to provide complimentary ‘skill sets’ to supports our Client assignments. GFG has a number of experienced Consultants from very diverse backgrounds one of which is Krish Nair who has exceptional knowledge of the leisure and tourism industry. He’s currently contracted as development director for the “Game of Thrones” attraction being developed in Belfast.

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