Armstrong Watson’s latest Family, Privately-Owned and Owner-Managed Business Survey has revealed that Cumbrian farmers are being tested by economic volatility and digital transformation.
Meanwhile, the sector is also facing additional challenges due to the impact of Inheritance Tax reforms, which could leave many with increased tax liabilities on death and threaten their ability to pass on their life’s work to the next generation.
The survey aims to gauge insights into the inner workings of family, privately-owned and owner-managed businesses, asking about their people, technology, growth plans and succession.
With agriculture making up the largest group of survey respondents, a third of whom are based in Cumbria, the findings offer a valuable insight into the current challenges, opportunities and future outlook for the region’s farm businesses.
The majority of agricultural businesses are partnerships (63%) or sole traders (26%), and 10% are limited companies, with an almost equal split of those that are first, second, third and fourth generation.
Use of technology
The survey highlights a potential digital gap in the sector.
While there are a number of businesses embracing technology – using cloud-based platforms and other online services, industry-specific digital software or exploring options for digital technology and automation – in Cumbria there are still more than half (higher than 39% of farm businesses nationally) who rely primarily on manual processes and have limited digital tools.
Cashflow strains and inflation
When asked about challenges over the next 12 months, 55% of agricultural businesses in Cumbria said they were either very concerned (18%) or somewhat concerned (37%) about cashflow and whether they will have enough to pay outgoings.
Meanwhile, a staggering 82% said inflationary pressures on costs were one of the biggest economic impacts on their business. Increasing costs were also listed as the key challenge to business growth over the next three years.
Passing on family farms
The survey highlighted that the majority of farm businesses in Cumbria, 55%, will be passed to the next generation or other family members, though some have not discussed their intentions.
18% say the business will cease after their time, while more than one in five haven’t considered their exit plan.
In light of changes to Inheritance Tax reliefs, which are due to be introduced in April 2026, farm businesses will need to prioritise their plans for succession.
Thank you to all those who took part in our survey. The full report is now available to download at armstrongwatson.info/family-business-report.
