Scotland's rural towns are struggling to survive the mass closures of local services and governments must make a “generational commitment” to revitalise them, according to a report.

The Federation of Small Businesses (FSB) is today calling for a £90 million-a-year fund to be set aside for a decade to boost resilience in the 479 towns across Scotland in which two out of three people live.

In a wake-up call for administrations in Edinburgh and London, the FSB is now challenging the established view that development must focus on major urban centres.

The UK and Scottish governments have previously come together to deliver multi-million pound city region “deals”, based on the theory that economic activity will ripple through to suburbs, small towns and rural areas.

However, the FSB has set out a manifesto calling for a new multi-million pound cash injection that should go to bolster local businesses – those, among other things, supporting high streets abandoned by national chain stores and, especially, banks.

Its report found that at least 414 bank branches, shop and local premises closures have been announced for Scotland’s towns and villages by big business and the public sector since the start of 2016. Some rural towns – such as Lochgelly in Fife, Gourock in Inverclyde and Dornoch in Sutherland, have no banking infrastructure at all, which is harming local businesses.

The Herald: Camley's cartoon: Rural towns under pressureCamley's cartoon: Rural towns under pressure

It also found that while the Highlands has a self-employment rate of about 13 per cent, in some parts of the country it is significantly less, with many locals instead forced out of numerous areas in search of work after traditional industries closed.

Now the FSB is demanding that a new Scottish Government commission be set up to tackle the blight of empty properties.

The group also wants banks to deliver on the shared hubs promise they made when they closed branches and the FSB also wants fresh help for independent traders to better utilise digital technologies.  

Andrew McRae, FSB’s Scotland policy chairman, said: “More people in Scotland live in towns than 
cities. That’s why governments in Edinburgh and London must make a generational investment in our towns to overcome their current challenges and prepare them for how we’ll work and live in the future.”

Despite their big city focuses, both UK and Scottish governments have funding packages for small towns. 
Mr McRae took some credit for Scotland’s.

He said: “Following FSB campaigning, last year the Scottish Government announced extra funding to boost Scottish towns. We need to build on this initiative because inclusive growth can’t only be a priority for city-dwellers. 

“After the wave of recent closures, we need to rethink how we use our high streets. A new commission should investigate the barriers to bringing vacant properties back into use, even if that means turning offices into housing, or department stores into art galleries. 

“Similarly, we need to make it cheap and easy for independent businesses to take up high street property and we believe a standard small business lease could be part of this solution.”

The FSB report, called Transforming Towns, urges the Scottish and UK governments to direct the Scottish National Investment Bank and the UK Stronger Towns Fund respectively to invest in these places.

In its report, the FSB praises what it calls innovative work to fill empty retail units. 

However, it wants Scottish ministers to set up a commission to tackle the rise of vacant properties. 
High Street vacancy rates in Inverclyde, where depopulation and deindustrialisation have hit hardest, top 20%.

The figure is nearly as high in North Lanarkshire. The national average is about 11%.

In the last three years, more than 300 local bank branches have closed or are winding down across Scotland. The FSB now forecasts the number of branches across the country will soon fall below 800, compared to 1,123 branches in 2013. Meanwhile, around 30 cash machines close each month north of the Border. 

Mr McRae said: “In terms of local closures, the banks are the worst offenders. At the very least, they should make good on their promise to introduce shared banking hubs and we would urge them to start with the largest towns that have no banks.

“Many smaller businesses are at the forefront of using new technologies to boost their efficiency, productivity and most importantly sales. But others may be behind the curve. Scottish Enterprise should develop a programme to give local traders a helping hand.” 

The FSB was backed by Phil Prentice, of Scotland’s Towns Partnership.

He said: “The time is right for a renewed focus and investment for our town centres and high streets. Small businesses are the backbone of our economy and town centres are the backbone of our communities.”