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CONTENTS

INTRODUCTION

HIE welcomes the publishing of the Draft Bill on Land Reform and appreciates the opportunity to comment on it. HIE sees the acquisition of land by communities, the involvement of communities in land management, and access to land as positive ways of exploiting development opportunities for the economic and social development of rural areas. We support the principle of more community involvement in development and, through our Community Land Unit, have been assisting in this process for nearly four years. We believe that those communities which have taken on the responsibilities of land ownership and management are now showing how these initiatives can contribute to stronger more robust local economies.

HIE has submitted substantial responses to all Scottish Office and Scottish Executive documents in the long consultation process on land reform to date, especially to the 1999 White Paper. While we recognise that some of our comments have been taken on board in the Draft Bill, we still feel that changes could be made to some of the detailed proposals which could assist in achieving many of the fundamental objectives of land reform promised when the debate was launched in 1997. It is important that the Bill, as a flagship piece of legislation in the Scottish Parliament, is used extensively and associated with projects which benefit rural areas in Scotland.

One of the main points we would like to stress, and this is outlined in more detail below, is that, from the experience that our Community Land Unit has had to date, we believe that communities are interested primarily in smaller plots of land and only in larger areas of land in exceptional circumstances. In the 4 years in which the Community Land Unit has been operating, approximately 40 community land projects have been assisted with acquisition costs. Only a quarter of these have been estates, islands, larger farms or more substantial areas of woodland. Nearly a half have been small areas of land for development or amenity purposes, and a quarter have been buildings. The legislation, as well as enabling communities to acquire larger areas when appropriate, must therefore make it easier and quicker for communities to acquire smaller plots of land.

We also believe that Land Reform should be more integrated into other Scottish Executive initiatives, as part of ‘joined up Government’. We believe land reform has a significant role to play in sustaining rural communities. It would appear to be an important component in Community Planning, and as well as SERAD’s wider rural development agenda.

HIE would like to comment on all three elements of the Bill. The main focus of our comments is on the Community Right to Buy. We also offer comments on Access and the Crofting Community Right to Buy, which has not been the subject of previous consultation. We summarise below the main ways in which we feel the Bill can be improved. A fuller analysis of what we see are the main issues in the Bill is given in Appendix 2.

COMMUNITY RIGHT TO BUY

The initial motivation behind legislation for Land Reform in the Scottish Parliament stems primarily from the unusually concentrated pattern of land ownership in Scotland, and is founded, as we understand, on four basic objectives:

Our concern is that given the restrictive but also complex mechanisms outlined in the Bill, that it will be difficult for any of the above objectives to be achieved easily, if at all, using the proposed legislation. The legislation should be used as a proactive tool for sustainable rural development, not simply as a defensive mechanism, to be applied only in extreme situations and even then with difficulty. We acknowledge that much can be achieved without legislation through normal market mechanisms and mutual agreement. Indeed, we have been part of that process over the last few years. There is also merit in the establishment of voluntary codes of conduct. But many had expected, HIE among these, that the legislation would have enabled greater change in land tenure and land management, and that the process would have been easier and quicker.

In the Appendix to our White Paper submission we laid out in detail how a range of CLU-assisted projects would have failed to comply with the legislation as proposed then. As mentioned above, HIE’s Community Land Unit has been involved in assisting in the acquisition of, and investment in, approximately 40 community land initiatives over the last 4 years. In Appendix 1 of this current response, we undertake a further analysis of how the most recent proposals would have impacted on a sample of 23 of these projects. The sample includes all the larger whole estate/whole island type of initiatives plus a range of smaller and building-based projects. The sample is tested against a range of definitions laid out in the Bill. Once again very few (5 out of the 23) could have occurred using the legislation as currently defined, without the intervention of Ministers to over-rule, at their discretion, some of the stated definitions or processes laid out in the Draft Bill. In these 5 we have not speculated on whether they would have complied with the proposed balloting procedures, but from our discussions with community representatives, in all cases this would have been unlikely. Almost all, therefore, would have been exceptions. The proposed legislation would have enabled virtually none of these projects to have happened.

Below we offer ways in which each of the main sections of the Bill could be amended to enhance the achievement of the objectives of land reform. (The relevant sections of the Bill are in brackets).

Rural Land. Many small towns are integrally involved in rural development and we would recommend consideration of extending the definition to include all settlements up to 5,000 people.

Structure of community bodies. Legitimate and representative existing bodies, as well as new ones, should be allowed to register an interest in land, e.g. community councils, community associations, local development trusts.

Membership. The requirement for a minimum membership of 30 people [42(1)(d)] is difficult to achieve in small sparsely populated communities, and prohibits the involvement of partnerships or consortia where actual membership of the company can be small. The minimum number of members should be three, if these comprise representative bodies or constituted organisations, and at least one of these should be a community organisation. If all members of the applicant community body are individuals, then the minimum number of members should be ten. The applicant body should have open membership, have community benefit as its primary objective, be non-profit distributing, and be democratically controlled.

Community Control [42(1)(f)] The Bill needs to clarify the distinction between community majority of the members and majority community representation on the board. The community should have the controlling majority on the board of community companies.

Definition of "community" [42(3)] The use of polling districts is not appropriate in many rural situations. Communities should be allowed to define themselves and applications to Ministers should require the endorsement of the local authority, local enterprise company or local economic forum.

Registration of Interest in Land [45-47]

We are concerned that the community right to buy can only be activated if a community has gone through the various steps to register an interest and when the land comes on the market. Nevertheless, we acknowledge the Executive’s rationale for insisting on this. We believe, however, this can be made simpler and easier:

allow existing community bodies, with suitable agency endorsement, to register an interest

when new bodies are created to register an interest, these should be, as described above, open membership, created for community benefit, non-profit distributing and democratically controlled

allow simple demonstration of community support for registration (balloting is complex and expensive), e.g. petition or properly recorded show of hands at a public meeting

There will be situations where the need for a community to access land for its sustainable development is deemed to be essential and unable to wait for the required land to come on the market. In these situations compulsory purchase powers should be utilised as described below.

Land as Lotted

Though the Bill does not refer to it directly, the whole issue of the areas of land in which communities can register an interest is crucial to the successful implementation of the Bill. CLU experience to date is that communities are interested in acquiring substantial tracts of land only in exceptional circumstances. They are more concerned about access to smaller more strategic areas of land to take forward development opportunities. For the legislation to work effectively to achieve its objectives, a mechanism must be found to allow communities to acquire suitable land easily. This can be done in one of two ways:

resort to the original suggestion in the White Paper that communities register an interest in land they actually want to acquire, and introduce compensation for landowners if they can prove that this significantly reduces the value of the rest of the holding. This mechanism is included as part of the Crofting Community Right to Buy [95(5)].

introduce into the legislation a mechanism whereby if a community registers an interest in a small area of land (there could be a maximum area definition say 2 hectares) then that defines one of the lots in any future sale.

Exercise of Right to Buy [58]

While we fully support the principle that exercising of the right to buy should have broad community support, we find it unnecessarily onerous that at least half the members of the community have to vote and that the majority of these have to vote in favour.

the vote on pursuing the right to buy should be taken at a properly arranged EGM of a formally constituted community-based company limited by guarantee, with open membership. This membership should represent at least 25% of the local population, and that 75% of members voting in favour would be sufficient to exercise the right.

Land value should be assessed on the basis of market value taking into account values of comparative land found in the local or neighbouring area, and need not take account of ‘peculiar interests’ [63 (7) (a)].

Compulsory purchase powers are included in the Bill only as a deterrent to sellers evading the proposed legislation. We believe that wider compulsory purchase powers should be available to ensure that land vital for sustainable rural development and community regeneration is made available. The powers of compulsory purchase by agencies, with endorsement, as outlined in the Bill, by local communities, should be reviewed with the aim of making them simpler or more usable.

Communities may wish to sell land, which they have acquired for a variety of legitimate reasons. No restrictions should be placed on the disposal of land by communities, as long as the sale is for the purpose of meeting the objectives of the community company, and the income for the sale is used for wider community benefit.

Ministerial Discretion [throughout]

While we welcome the degree of flexibility built into the Bill, we believe that the degree of Ministerial involvement appears to be too high. In the Community Right to Buy section alone we note over 75 references to Ministers’ responsibilities, and 30 of these give Ministerial discretion over key decisions.

as part of the general priority of devolving central government functions, we believe that some Ministerial decisions could be taken by local organisations. While key decisions relating to the access elements of the Bill will be taken by the Local Access Fora, we believe that some decisions related to land could also be devolved. New bodies, similar in structure to Local Access Fora could be formed or responsibilities passed to existing agencies like local authorities, LECs, Local Economic Fora, or the former LEADER Local Action Groups, or Community Planning partnerships. This would also ensure integration of land reform into wider community initiatives.

CROFTING COMMUNITY RIGHT TO BUY

We welcome the inclusion of the Crofting Community Right to Buy in the Draft Bill, as we recommended in our White Paper response, and the inclusion of salmon fishing, mineral rights, other sporting interests and additional land contiguous to crofting land, as part of eligible 'land’.

Crofting Community Bodies [78]

the inclusive definition of community, to incorporate both crofters and other residents, should be used in the establishment of the crofting community body. However the special position of tenant crofters has to be recognised in potential buy-outs. The crofting community body must have the support of the majority of tenants before it can exercise the right to buy. In addition, given the nature of many crofting communities, tenants living within 10 miles of their crofts should be eligible to vote in any take-over proposal.

water, (lochs and rivers), the foreshore and woodland (as well as mineral, sporting and fishing rights) should be included in the definition of croft land.

while we welcome the inclusion of this component, we are not sure why there is a size restriction. The Land Court decides on the purchase of additional land on a case by case basis.

valuation of croft land should be on the basis of 15 times the annual rent, adjusted to take account of additional land and land assets such as fishing, mineral and sporting rights.

ACCESS

Access to the countryside is a vital component for sustainable rural development. It contributes to local quality of life and has positive amenity, health and education advantages for local communities. Just as importantly, the ability for visitors to have easy and informed access to the land for recreation has significant economic impact in rural communities. In a study which we commissioned in 1996, we estimated that hillwalkers and mountaineers generated £34 million annually in the Highlands and Islands, and supported nearly 4000 jobs. This is in addition to the impact of lower level and more informal walking, which constitutes a significant element of tourists’ holiday activities.

The recent outbreak of Foot and Mouth Disease offers the following important lessons, which should inform the access debate:

The significant detrimental impact which restricted access has on the rural economy

The way in which the general public behaved responsibly in acknowledging land management problems

The potential for land managers to abuse the power to restrict access.

Creation of Access Rights [1]

HIE strongly welcomes the intention signalled in the Bill to create a right of access to land for everyone. We believe that this measure, more than any other single measure, will act to change peoples’ perception of the countryside as a place to visit and enjoy. It will greatly underpin efforts to promote countryside access and enjoyment as a public ‘good’ and will assist in our efforts to develop the role visitors to the countryside play in bringing income to the Highlands and Islands.

Limitation on Access Rights [2]

The Access Code places responsibilities on those exercising the right of access as there is a direct link to the Code through clause 2(2)(b) of the Bill, which removes the right if the Code is contravened. However, there is no equivalent link in relation to the behaviour of landowners in responding to those exercising their right of access.

It is essential that landowners are required by statute to operate according to the terms of the Code too.

Suspension of Access Rights by Owner of Land [9]

This clause gives rise to particular concern in the absence of any statutory link as proposed above between the ability of landowners to suspend access under certain circumstances, and the clauses in the Code requiring them to behave in certain ways.

A landowner’s right to suspend access should either be specifically defined and time limited by statute, or there should be a direct statutory link to the Code, which should set out reasonable time limits for the length of suspension under circumstances likely to apply. Failure to adhere to such time limits or to the Code in any other way would then have the effect of nullifying the temporary right to suspend access.

Local Authority Functions [17-28]

There is a risk that the crucial local authority function in access provision will become tangled in new bureaucracy. The duties that are set out in the Bill, such as those on maintaining a list of core paths and providing a schedule of land excluded from the general right of access, will considerably increase bureaucracy associated with the access right, but do very little to help people enjoy the countryside.

List of Core Paths [24]

One of the main limitations on access to the countryside is that many people do not know where they can go for a walk. The original proposal from the National Access Forum entailed the creation of local path networks by local authorities, who would have a new duty to maintain these paths as core paths. However, no such duty is proposed in the Bill – the related proposal merely places a duty on local authorities to ‘compile and maintain a list of all core paths within their area’.

If the general access right is to have the desired affect it is essential that local authorities are given a duty to ensure that there are places for people to walk. Local authorities should have specific sums identified in their funding allocation from the Executive to enable them to do this.

The Scottish Outdoor Access Code

The function of the Scottish Outdoor Access Code is now unclear and the draft Bill is now not consistent with the Code. For example, according to the Code, all local authorities must ‘identify and establish a core path network.’ although there is no such duty proposed in the Bill. The impression given from this is that the consensus achieved in the National Access Forum and reflected by the terms of the Code has been undermined during the drafting phase of the Bill.

As the Bill is re-drafted, there should be a close simultaneous review of the Code, to ensure that they are consistent with one another.

APPENDIX 1

Community Land Initiatives in the Highlands and Islands:

Fit with Draft Land Reform Bill

APPENDIX 2

ANALYSIS OF ISSUES IN THE BILL AND SUGGESTED ALTERNATIVE APPROACHES

We have identified those sections of the Bill where we feel there are weaknesses, and our reasons for this are outlined below. (The relevant sections of the Bill are in brackets).

COMMUNITY RIGHT TO BUY

Registrable Land [41]

We welcome the inclusion of salmon fishings and mineral rights in the assets in which communities can register an interest. Access to these, and the prudent management of them, will contribute to the sustainable development of Scotland’s rural communities.

Community Bodies [42]

We believe there are considerable problems with the definitions in this Section.

Structure of Community Bodies

As we argued in our response to the White Paper requiring communities to form companies limited by guarantee simply to register an interest in land which may not come on the market for many years, if ever, is too onerous. The formation of companies takes time and resources, and may well duplicate similar community company bodies already in existence. More importantly there are challenges in sustaining community interest and commitment over long periods of time, and ensuring succession on boards. This is exacerbated when such companies may well be doing nothing for some period of time, while they await land coming on the market.

Membership

The requirement for a minimum membership of 30 people [41(1)(d)] is difficult to achieve in small sparsely populated communities, and prohibits the involvement of partnerships or consortia where actual membership of the company can be small. For example there are only six members of the Knoydart Foundation, and only three in the Isle of Eigg Heritage Trust. In Kylesku, the membership of six includes virtually all the crofters living on the estate.

Community Control [41(1)(f)]

The Bill needs to clarify the distinction between community majority of the members and majority community representation on the board. Insisting on community majority of membership means that the formation of consortia will be unlikely. The structure of the membership is important mainly in altering the constitution of the company, but this is controlled in the Bill by the need for community bodies to seek Ministerial permission to change the constitution [43(1)(b)].

Definition of "Community" [42(3)]

The use of polling districts is not appropriate in many rural situations. As Appendix 1 shows, polling districts would have worked in only a small minority of the successful applications, which the Community Land Unit has funded to date. Some land areas are in more than one Polling District. Because of the size of many rural Polling Districts, some land projects would require the involvement and support of communities at some considerable distance away, and with little stakeholding in the land in question.

Registration of Interest in Land [45-47]

We have considered carefully the process of registering an interest in land. We are concerned that the community right to buy can only be activated if a community has gone through the various steps to register an interest and when the land comes on the market. This, to us, is not a system designed to address easily and quickly land ownership-based obstacles to sustainable rural development.

Because of the substantial bureaucracy involved, we understand the Scottish Executive’s resistance to considering an automatic right of pre-emption, in favour of communities, to all rural land. This would also necessitate the need to develop exemptions, like individual houses and gardens etc. Registration, while still cumbersome, does ensure genuine community interest, appears to comply with Human Rights legislation and minimise bureaucracy. We believe, however, that it can be made simpler and easier.

We welcome the introduction of late or ‘emergency’ registration as suggested in our White Paper response. There will be situations, for example, where land has not come on the market for some considerable time, perhaps generations, or when there appears to be an obvious heir. In other contexts, local community members, many of whom may be tenants, may not wish to confront or offend landowners by registering an interest. In all such situations there may be little incentive for communities to register an interest, but such communities should have the ability to do so after it has become known that the land is to be sold or transferred.

Land as Lotted

Though the Bill does not refer to it directly, the whole issue of the areas of land in which communities can register an interest, is crucial to the successful implementation of the Bill. In the 4 years in which the Community Land Unit has been operating, approximately 40 community land projects have been assisted with acquisition costs. Only a quarter of these have been estates, islands, larger farms or more substantial areas of woodland. Nearly half have been small areas of land for development or amenity purposes, and a quarter have been buildings. For a variety of reasons, therefore, communities rarely wish to acquire substantial tracts of land, and those which have, like Eigg, Knoydart and Assynt, have usually done so in extreme circumstances of threat, usually relating to financial or other difficulties facing the owner.

It is important, therefore, that communities can use the right to buy legislation to acquire, easily, smaller more strategic areas of land to take forward development opportunities. The introduction of concerns about ‘cherry picking’, and the loss of value for the owners of larger areas of land, has led to a flaw in the proposed legislation. There is now the serious problem of communities wishing to acquire say 10 acres for housing, recreational, development or amenity purposes first, having to wait until the land comes on the market, and second having to acquire a whole estate of 10,000 acres, if that is how the seller wishes to lot the land. Apart from the effort and the possible utilisation of scarce public resources to acquire the land, there are severe restrictions built into the Bill to prevent communities from disposing of the land they do not want (see section on Disposal below).

Exercise of Right to Buy

While we fully support the principle that exercising of the right to buy should have broad community support, we find it unnecessarily onerous that at least half the members of the community have to vote and that the majority of these have to vote in favour. No other exercise of democratic rights has this obligation. It also fails to acknowledge that many innovative rural development initiatives are led by active minorities. Our suggested alternative allows for such dynamism to be supported while protecting communities from unrepresentative or maverick minorities. The undertaking of formal ballots is complex and expensive. A recent ballot to elect representatives to a community land company in a relatively small rural community (c 1,000) is estimated to have cost in excess of £1,500. (Incidentally, approximately 150 took part in the ballot, substantially less than 50% of the eligible electorate).

Valuation of Land [63]

The principle of the community acquiring land at market value, assessed by an independent valuer, is accepted. We are concerned, however, that the valuer may take into account the ‘existence of a person………. who would be willing to buy the land at a price higher than other persons, because of a characteristic of the land, which relates peculiarly to that person’s interest in buying it’. [63 (7) (a)]. This will be difficult to prove and will inflate land prices.

Compulsory Purchase [72]

Compulsory purchase powers are included in the Bill only as a deterrent to sellers evading the proposed legislation. We believe that wider compulsory purchase powers should be available to ensure that land vital for sustainable rural development and community regeneration is made available. As alluded to elsewhere, we do not believe that the proposed legislation, which forces communities to wait potentially for years for land vital to community development to come on the market, and even then, potentially as part of a much larger area of land which the community would have to acquire, but of which it is prevented from disposing, is either progressive or workable.

The Bill alludes to agencies’ existing powers of compulsory purchase. HIE has these powers but has never used them, having taken advice, and concluded that they could not be used easily, or unchallenged, for social and economic development purposes.

Disposal of Land [73]

We understand the preference that land, acquired through the community right to buy, should remain in community ownership. But our experience to date has shown that in several circumstances, communities may wish to sell land, which they have acquired for the following main reasons:

to raise capital to undertake further investment in the remaining assets. For example, the Knoydart Foundation recently sold Inverie House the proceeds from which will be used to assist in the renovation of the area’s hydroelectric scheme (both to provide the only power in the community and to generate income for the Foundation) and in the upgrading of local rented housing.

to dispose of loss-making assets.

to provide land for housing to grow the local population.

to diversify local land ownership by providing smallholdings, business and housing opportunities.

to dispose of excess land which the community had to acquire, but which it did not want, because of the way in which the land was lotted at point of sale.

We see no value, therefore, in restricting the disposal of land acquired by communities. The constitution of community bodies will prevent disposal of assets for individual gain, constitutions cannot be altered without Ministerial permission, and if any public or Lottery funds are used to assist community acquisition, normal clawback provisions will be included in grant conditions.

Ministerial Discretion

While we welcome the degree of flexibility built into the Bill, we believe that the degree of ministerial involvement appears to be too high. In the Community Right to Buy section alone we note over 75 references to Ministers’ responsibilities, and 30 of these give Ministerial discretion over key decisions.

As part of the general priority of devolving central government functions, we believe that some ministerial decisions could be taken by local organisations. While key decisions relating to the access elements of the Bill will be taken by the Local Access Fora, we believe that some decisions related to land could also be devolved. These could include, for example, assessment of community definitions; structure and representativeness of community bodies; the appropriateness of late registration; monitoring of balloting arrangements; arbitrating between competing community bids; assessing application for fishing and mineral rights; and advising on compulsory purchase. New bodies, similar in structure to Local Access Fora could be formed or responsibilities passed to existing agencies like local authorities, LECs, Local Economic Fora, former LEADER Local Action Groups, or Community Planning committees. This would also ensure integration of land reform into wider community initiatives.

CROFTING COMMUNITY RIGHT TO BUY

We welcome the inclusion of the Crofting Community Right to Buy in the Draft Bill, as we recommended in our White Paper response, and the inclusion of salmon fishing, mineral rights, other sporting interests and additional land configures to crofting land, as part of eligible 'land’.

Crofting Community Bodies [78]

In principle we welcome the extension of the definition of the crofting community to include members of the wider community other than registered crofters. This is in line with broader social inclusion objectives and recognises the changing nature of many crofting communities. We also recognise, however, that the inclusion of this component in the Bill was to recognise the special tenurial arrangements enjoyed by crofters and to extend the existing individual crofters’ right to buy to a collective right to buy. We acknowledge that in some crofting communities, the number of actual registered crofters will be in the minority. This could lead to potential splits in such communities between crofting and non-crofting interests in decisions relating to land acquisitions.

Because of the special role of crofting tenants, we acknowledge that there is a significant difference between the crofting and the broader community rights to buy. We are aware also that active crofting tenants may live close to but not actually in the township where crofts are located and that these tenants have a legitimate stakeholding in the land which may be acquired. We would recommend, therefore, that tenants living within 10 miles of their crofts be eligible to vote in any take-over proposal. In addition, the crofting community body must have the support of the majority of tenants before it can exercise the right to buy.

Eligible Croft Land [76]

It is not clear if water, (lochs and rivers), the foreshore and woodland are included in the definition of croft land.

Purchase of Additional Land [84-86]

While we welcome the inclusion of this component, we are not sure why there is a size restriction.

Valuation of Croft Land [94]

We believe that the value of croft land, subject to crofting community right to buy should be linked to the same principle involved in individuals crofters’ right to buy.

Other issues

Clearly many of the mechanisms relating to the Crofting Community Right to Buy are the same as the Community Right to Buy, e.g. balloting, disposal of land, compulsory purchase etc. Our comments on all of these elements in the community right to buy section are equally valid for the crofting community right to buy.

FURTHER INFORMATION

For further information contact the Community Land Unit at Highlands and Islands Enterprise.

E-mail: ja.watt@hienet.co.uk

Telephone: 01463 244 467
Fax: 01463 244 469

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