More than half of rural businesses in the North East, South West, and West Midlands struggle to recruit or retain skilled staff, according to the National Innovation Centre for Rural Enterprise (NICRE).

Almost 90 per cent of these firms highlighted a scarce local labour pool, low wages, and a lack of apprenticeships or training opportunities.

Furthermore, almost 40 per cent of rural businesses reported staffing issues due to unaffordable housing and poor public transport, less of a concern for city-based companies.

Otter Handmade, a Northumberland-based furniture company, created its own solution by setting up an apprenticeship programme with Oxford-based Rycotewood School of Furniture and recruiting from local schools.

"Efforts to collaborate with fellow wood crafts businesses in Northumberland didn’t work out due to geography and other factors so we needed to be more creative," managing director John Holt said.

With their links to local schools, Otter Handmade hired Cole Thompson as its first apprentice in furniture making. John and his wife Kate - who both have a background in further education - also run a year-long internship programme and recently offered intern Jack Colledge a permanent position.

Dr Barbara Tocco, NICRE centre manager based at Newcastle University’s Centre for Rural Economy, said: "Our findings highlighting that skills and labour availability are major challenges for rural businesses and are affecting current productivity and future growth is particularly concerning for the UK economy."

She suggested focusing on policies that facilitate collaborative action.

The Department for Environment, Food and Rural Affairs and Department for Education responded to the report highlighting its support for rural areas.