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Progressing Community Ownership and Promoting New Types of Rural Settlement

James Hunter, June 1997

Contents

Summary

1. Introduction and Background
2. The Case for Land Reform
3. Expanding Community Ownership in Present Circumstances
4. Giving Communities the Right to initiate Change
5. Giving Community Ownership Rights to All Crofting Communities
6. Funding Further Community Ownership
7. Administrative Implications of Wider Community Ownership in the Crofting Sector
8. Possible Community Ownership of Forestry Commission and Scottish Natural Heritage Landholdings
9. Possible Community Control of the Foreshore and the Seabed
10. Establishing New Rural Communities, and New Smallholdings on Non-croft Land by Means of Inter-agency Collaboration
11. Revisiting and Reactivating Land Settlement Legislation
12. Revisiting the Highlands and Islands Development Board’s Land Reform Proposals
13. Making the Provision of Public Funds to Landowners Conditional on their Releasing Land, as required, for Housing, Development and Settlement
14. Other Possible Regulatory Initiatives
15. Progressing Community Ownership: An Agenda for Action

References

[See also - 'What Evidence' said the one-eyed public policy maker?
- A Brief Review of Recent Community Land Ownership Trends in Scotland; G Boyd Dec 2003]

Summary

The paper welcomes the government’s promise to engage in immediate study of the land ownership structure with a view to establishing the basis for future land reform.

The case for land reform is briefly stated.

Among the suggestions made as to how this can be brought about are proposals to:

A general move towards community ownership in the crofting sector, it is noted, could have implications for the way crofting is administered.

Suggestions are made as to how non-croft land and other natural resources might be brought into community ownership. It is proposed that:

The means by which a range of public agencies might collaborate to create new rural communities on non-croft land are examined.

Early 20^th century land settlement legislation, it is suggested, might usefully be revised and reactivated in this context.

Also worth revisiting are the land reform proposals made by the Highlands and Islands Development Board in 1978.

Because development of all sorts is constrained in parts of the Highlands and Islands by a lack of available land, suggestions are made as to how the provision of public funds to landowners might be made conditional on a willingness, on the part of the landowners in question, to release land for housing, for commercial development and for other purposes of that type.

A number of further suggestions are made as to how the market in Highlands and Islands estates might be regulated in the public interest.

Finally, it is suggested that the various suggestions and proposals made in the paper are progressed by the community ownership support unit which the Scottish Office Industry Minister, Brian Wilson, has asked Highlands and Islands Enterprise to establish.

1. Introduction and Background

This paper arises from discussion at the last meeting of the Convention of the Highlands and Islands on 23 March 1997. Following that discussion, I was invited by the then Secretary of State, Michael Forsyth, to prepare a paper "setting out some ideas on the scope for further progress on the issues of land reform in the Highlands and Islands" [Highlands & Islands Convention Minutes, 1997, p11].

In the interim, there has been a change of government. I was informed in early June that Mr Forsyth’s successor, Donald Dewar, wanted the paper to go forward.

A draft was circulated to a number of interested individuals. I am grateful to them for their comments and suggestions – several of which have influenced the final text. I am grateful, too, to Richard Grant of the Scottish Office Agriculture, Fisheries and Environment Department (SOAEFD) both for supplying me with background information and commenting constructively on my draft. The paper, however, remains very much a personal production. It is no more than a statement of my own views and is definitely not to be taken as the policy of any organisation with which I am, or have been, connected.

This paper has been written in the light of commitments set out by the Labour Party, just prior to its election victory, in a document entitled New Life for Scotland’s Rural Communities. There Labour promised: "An immediate study into the system of land ownership and management as a basis for future land reform under a Scottish Parliament – for example, by examining with the Scottish Law Commission options for abolishing Scotland’s outdated system of feudalism by removing the rights of feudal superiority" [Scottish Labour Party, 1997, p9].

In my John McEwen Memorial Lecture of 22 September 1995, Towards a Land Reform Agenda for a Scots Parliament, I suggested that if, "in the spring of 1997", the Labour party "were to win a general election", the party should "set up a Scottish Land Reform Committee …. To pave the way for a Land Reform Bill to be placed, in time, before a Scots Parliament" [Hunter, 1995, p8]. Naturally, therefore, I very much welcome the commitment set out in the preceding paragraph.

One cautionary note should be struck. The case for replacing our feudally based property laws with a simpler and more rational approach to such matters – as outlined by the Scottish Law Commission in 1991 and as agreed, in principle, by all of Scotland’s political parties – is unanswerable. However, such a reform will produce, of itself, no change in our rural land ownership pattern. This is not appreciated by the many people who, quite understandably, confuse feudal, in the strict sense that the term is applied to our legal system, with the less technical, and more pejorative, way in which the same word is applied to a rural land ownership structure characterised, especially in the Highlands and Islands, by a high degree of absentee landlordism and by a quite extraordinary concentration of ownership – a concentration which has resulted in much of our land area being in the possession of a mere handful of individuals and organisations. There is a widespread belief that some marked change in this situation will be brought about by what is called the abolition of feudalism. It will not. The introduction of more up-to-date property laws will certainly end the longstanding ability of feudal superiors to exert influence and authority – often negatively and oppressively – over land ostensibly in the ownership of others. But for all that such laws will thus alter the basis of ownership, by making ownership (it should possibly be noted) more absolute, they will not, of themselves, enable the wider community to obtain enhanced control over, let alone ownership of, land.

While government ought to be encouraged, then to abolish feudalism by means of the reform package which the Scottish Law Commission is continuing to refine, the government ought equally to be encouraged to undertake further reforms and initiatives which would have the effect, over time, of involving Highlands and Islands communities much more directly in the ownership and management both of land and of the resources, such as forestry, of which land is the basis.

2. The Case for Land Reform

As has been recognised by development authorities and governments all around the world, successful rural development depends on rural communities having the maximum possible access to, and control over, the land, which is their basic asset. In the Highlands and Islands, factors such as the sheer size of landholdings, absentee landlordism and the frequently speculative market in estates have resulted in many communities having little such control. There is consequently a widespread and growing conviction, shared by many local and national politicians, that Highlands and Islands communities ought to have a greater say in what happens to – and, ideally, more control over and more ownership of – both land and related resources. Recent community purchases of extensive areas, most notably in Assynt and Eigg, have highlighted the possibilities in this regard. There, as elsewhere, community ownership has been seen to boost the collective self-confidence of communities involved as well as to broaden the range of developmental opportunities open to them.

This paper concentrates on reform possibilities relating to land (including land devoted primarily to forestry or nature conservation as well as land in agricultural use) and to the seaward extension of the land resource, both as foreshore and seabed. There could well be equal – perhaps greater – benefits to be got from promoting more localised control of fisheries management and the like. That issue, however, lies out with this paper’s scope.

3. Expanding Community Ownership in Present Circumstances

There exist, at present, four broad means of expanding the amount of land in community ownership.

The owner of a particular piece of land can voluntarily enter into an agreement with its occupants whereby the latter take on the ownership – either free-of-charge or at a below-market-value price –from the former. It was by such means the Stornoway Trust, one of the older examples of community ownership, was brought into existence in the 1920s. And it was by such means that community ownership was also established, more recently, at Borve and Annishader in Skye and at Melness in Sutherland.

When an estate comes on the market, its occupants can attempt to buy it in competition with others. This has been successfully accomplished in recent years in Assynt and on Eigg. A similar attempt has been mounted, so far unsuccessfully, in part of Knoydart.

Occupants of the Secretary of State’s 53 crofting estates are able – under the provisions of the Transfer of Crofting Estates (Scotland) Act, 1997 – to take on the ownership of those estates at no, or a nominal, cost. A number of communities are contemplating a move in this direction.

The possibility of land in Forestry Commission ownership being placed in community management was raised by the previous government in the particular case of Laggan. A number of other communities are known to be interested in similar arrangements.

There are obvious limits as to what can be achieved under these four headings:

This paper, therefore, seeks to identify means of adding to the possible ways in which land can be brought into community ownership.

4. Giving Communities the Right to initiate Change

The Transfer of Crofting Estates (Scotland) Act leaves it entirely to affected communities to decide if, or when, they wish to move towards community ownership. This seems to me to be right. For all sorts of reasons, some good (as in instances where communities are happy with existing arrangements) and some not so good (as in instances where communities lack the necessary self-confidence or the equally necessary local leadership), many communities do not, and might never, want to go down the community ownership road. Their judgements must be respected. Equally, communities which are interested in community ownership must be allowed to move in that direction at their own pace and in their own time.

Community ownership, then, should not be forced on unwilling communities. But community ownership should be an attainable goal for any community, which wishes to move towards it. The various suggestions made below are put forward with this aim in view.

5. Giving Community Ownership Rights to All Crofting Communities

All crofting communities could be enabled to move towards community ownership by combining the community ownership principles of the Transfer of Crofting Estates Act, 1997, with the right-to-buy provisions incorporated in the Crofting Reform (Scotland) Act, 1976. These latter provisions, put simply, give crofters absolute right (which can be exercised with or without the relevant landlord’s consent) to buy their inbye, or arable, land for a sum approximately equivalent to 15 times the rent of the inbye as fixed, if necessary, by the Scottish Land Court. This right-to-buy could be extended from individual to the community and from the inbye to common grazing. If this were to happen, any crofting community – whether at the township level, the estate level or some intermediate level – would be entitled to purchase its croft land, in that land’s entirety, from a crofting landlord (with or without the landlord’s consent) for a sum roughly equal to 15 times the aggregate rent of the land in question.

Even under existing legislative provisions, a crofting community could establish community ownership of a privately owned crofting estate. This would happen if all the crofters on an estate agreed to apportion (i.e. divide) their common grazings in such a way that each crofter’s apportionment was, in Scottish Land Court jargon, contiguous (i.e. adjacent) to each crofter’s inbye. Each crofter would then have an absolute right to buy both his inbye and his apportionment in the common grazings. And the land thus obtained could afterwards be vested in a community trust. Crofters in Assynt, had their community purchase of the North Assynt Estate been unsuccessful, are known to have contemplated some such proceeding. It would, of course, be very complex and time consuming. But the fact that it could happen underlines the point that no new principles are involved in the reform suggested in the previous paragraph.

While any such figure can, at this stage, be no more than a very rough and ready estimate, the total cost to crofters of buying out all Scotland’s crofting landlords on the basis suggested above seems unlikely to exceed £10 million.

This figure is low because crofting rents are low. And rents are low because it has been accepted since the passing of the Crofters (Scotland) Act, 1886, that virtually the entire value of a croft – as represented by its home, buildings, fences, ditches and other permanent improvements of that kind – is the creation of the croft’s occupant and his or her predecessors. The landlord, having provided nothing but the land, is entitled in law only to a bare-land rent which, even in today’s circumstances and even as fixed by the Scottish Land Court, frequently amounts to no more than £20 or £30 a year.

Right-to-buy provisions of this type were designed to leave landlords no worse off financially. When a croft rented, say, at £30 a year is bought by its occupier, its former landlord receives £450. Bearing in mind that the landlord no longer has any managerial overheads in respect of the croft in question, this sum, when invested, should produce a larger net annual return to the croft’s former landlord than the landlord would have obtained by retaining the croft in his possession. What is true of one croft would be equally true of many crofts. Complications arise, admittedly, with regard to the landlord’s non-crofting interests – such as development value, sporting rights and mineral rights – in croft land. These complications are touched on below.

If government were willing to investigate the implications of the reform suggested in the preceding paragraphs, a number of points would clearly have to be examined in detail.

Thought would need to be given as to the conditions, which would have to be fulfilled before community purchase could be triggered. Prominent among those conditions would be the proportion of affected crofters required to give their consent to any prospective purchase.

There might need to be debate as to the optimum scale of community purchase. Should townships be allowed to proceed on their own? Should townships be encouraged to take advantage of the economies of scale to be got from going forward on a whole estate, or even multiple estate basis? What are the merits, and demerits, of the Scottish Crofters Union proposal that community owned estates be merged in such a way as to constitute what has been called a Pan-Highland Trust?

As the Crofters Commission have consistently and rightly insisted, appropriate support and training ought to be available to crofting communities thinking about embarking on community ownership. This would be as true of communities affected by the reforms advocated here as it is true of communities presently contemplating ownership of the type made possible by the Transfer of Crofting Estates Act.

Should reform go ahead, attention will have to be paid as to whether a crofting community wishing to embark on a community purchase of this type would be required to raise the entire purchase price. If it was felt that such a community might be entitled to have some access to public funds (on the grounds, for instance, that an equivalent community on one of the Secretary of State’s estates can obtain its land virtually free of charge), this would have implications in respect of funding mechanisms of the sort touched on in Section 6.

It should be noted that an individual crofter who takes advantage of existing right-to-buy provisions does not automatically acquire non-crofting interests pertaining to the land in question. The landlord’s half-share of any development value accruing from the de-crofting and sale of all or any part of the land in question remains with the former landlord for a period of 5-years following the purchase of the inbye. And the former landlord is entitled in perpetuity to have mineral and sporting rights to the land in question.

In the context of facilitating movement towards community ownership, it would make sense to explore the scope for all-embracing transfer of ownership rights – including development value, mineral rights and sporting rights. Depending on the particular circumstances, this could well involve costs substantially greater than those arising from the comparatively straightforward purchase of crofting rights. The precise scale of these costs is difficult to assess. But if mineral and sporting rights were to be brought into community ownership, this would certainly have implications for the funding mechanisms touched on in Section 6. Costs, however, could be reduced by various means. As already happens in the case of individual crofts bought under the 1976 provisions, the former landlord’s half-share of the development value could be left with the former landlord for 5-years. And analogous arrangements could be made with regard to sporting rights and mineral rights. If, for example, the former landlord were entitled to a rent-free tenancy of sporting rights for a period, the sum paid to the former landlord in respect of loss of sporting rights might consist of the difference in market value between a lease of these rights for that period and outright ownership of them – a figure which would, of course, be lower than that arising from an immediate and outright loss of sporting rights. The former landlord might also be left in possession of royalties arising from mineral rights, which are already being exploited commercially. In the case of presently un-exploited mineral rights, on the other hand, the former landlord might be entitled to a proportion of any royalties arising from future exploitation over a period – this proportion, perhaps, to diminish with each year that passes from the point of community purchase and to disappear entirely at the end of the stipulated period.

The suggestions made with regard to sporting and mineral rights in the preceding paragraph are less than ideal from the community point of view. Any change that actually occurs, however, is likely to be a compromise between the ideal and the financially feasible. The foregoing ideas – which are, in any case, extremely tentative – are put forward, then, with a view to exploring mechanisms which would have the effect of brining about ultimate community ownership of sporting and mineral rights at a lower cost than would be involved in taking outright possession of these rights on day one, as it were, of any community purchase of croft land.

6. Funding Further Community Ownership

Irrespective of how exactly it is brought about – whether by means of reforms such as those outlined in the previous Section or by means to be explored below – the expansion of community ownership will require to be funded. This is especially so with regard to non-croft land, which will not be affected by reforms of the sort suggested in Section 5.

Communities ought to be encouraged to raise a proportion of land purchase costs from their own resources. And if the reforms suggested above in the previous Section were to be implemented, the costs of establishing community ownership of croft land would not be prohibitive. But assuming that a free market – even if subject to new regulation of the type canvassed subsequently in Section 14 – in non-croft land continues to operate, the purchase price of non-croft land is likely, in most circumstances, to remain beyond the unaided reach of most Highlands and Islands communities.

In Eigg and elsewhere, communities wishing to move towards community ownership have tackled this difficulty by embarking on public appeals for the necessary cash. As already noted in Section 3, this is a wholly unsatisfactory means of proceeding. Public appeals will not be successful if replicated endlessly. And in the time taken to mount such appeals the estates at their centre can readily find non-community purchasers.

What is needed, then, is a Community Land Purchase Fund to which prospective community purchasers could apply for grant aid, for low-interest loans, or for a mix of the two.

Low-interest loans are possibly to be preferred in this context because they would have the effect of re-circulating such capital as can be injected into the purchase fund.

Bearing in mind the expenditure constraints under which government is operating, such a fund is unlikely to attract substantial new money directly from government. Nor is it desirable, in my view, that large proportions of already over stretched development budgets – whether those of Highlands and Islands Enterprise (HIE), Local Enterprise Companies (LECs) or local authorities – are regularly directed into land purchase. What requires to be investigated, therefore, is the possibility of devising alternatives – or additions – to those approaches.

As regards public sector contributions, a Community Land Purchase Fund could be established with the help of:

The fact that the HIE Network and local authorities had helped establish such a fund would not debar a particular community from getting further assistance from these sources for a move towards community ownership – in the form either of additional help with land purchase or, more probably, in the form of help with subsequent development initiatives to be undertaken on the land thus acquired.

It should be borne in mind that SNH and the NHMF, more particularly the latter, have already assisted land purchase in the Highlands and Islands. The bulk of such assistance, however has gone to environmental organisations – such as the Royal Society for the Protection of Birds (RSPB), the John Muir Trust (JMT) and the Woodland Trust (WT) – rather than to community groups. This has placed these organisations at something of an advantage over community groups. It has also had the effect of bidding up the price of land. Partly because the purchase of Highlands and Islands estates by bodies such as the RSPB and the JMT establishes another form of absentee ownership (and on which is in principle, perpetual), partly because such bodies should not (at the minimum) be favoured over community groups, environmental organisations might be required, in the future, to bid for land purchase aid (in a Highlands and Islands context) to the prospective Community Land Purchase Fund – to which SNH and the NHMF, it is suggested, should contribute – on the same basis as community groups.

An arrangement of this sort would have the probable, and welcome, effect of getting organisations like the RSPB and the JMT to bid for land in partnership with community groups – as has already happened in the case of Eigg where the Scottish Wildlife Trust (SWT) operated in concert both with The Highland Council and with the local community. A partnership approach of this type (quite apart from its financial attractions) allows different components of a single estate – such as its wild land, its woodland, its agricultural land and its buildings – to be more readily desegregated for management purposes.

A Community Land Purchase Fund might be a candidate for Millennium Commission assistance on much the same basis as the already assisted Millennium Forest Project.

As suggested below in Section 15, the overall approach advocated in this paper is broadly in accordance with the latest European Union (EU) thinking on rural development. The possibility of accessing EU finance ought, therefore, to be explored.

Consideration might also be given to making the Community Land Purchase Fund the subject of a well-organised appeal to the general public and to private businesses both in this country and overseas – experience having shown that a substantial number of individuals and corporate bodies can b persuaded to contribute to the cost of getting land in the Highlands and Islands into community ownership.

Such an appeal is more likely to be successful if the Community Land Purchase Fund can be distanced in some way from central government and its agencies. The Highland Fund – which has been circulating and re-circulating development capital in the Highlands and Islands since the early 1950s – constitutes a potentially useful precedent in this regard.

There is also considerable scope for exploring ways in which community ownership, and related developments, can be promoted through the government’s Public-Private Partnership Initiative. Some of the possibilities under this heading are touched on in Section 10.

7. Administrative Implications of Wider Community Ownership in the Crofting Sector

Over the period since the state first began to regulate crofting in 1886, a whole set of public agencies have acquired an interest in crofting matters. The most prominent of these are the Crofters Commission and the Scottish Land Court, which together administer the corpus of crofting law and regulation as recently consolidated in the Crofting (Scotland) Act, 1993.

Much of this body of law and regulation is founded on the historically accurate assumption that the interests of crofters and landlords are mutually conflicting and that the former, as it were, require legislative protection from the latter.

But if crofters collectively become – on any substantial scale – their own landlords, then the universal application to crofters of the existing body of crofting law becomes difficult to justify. Since rents on a community-owned crofting estate are set, for example, by elected representatives of the estate’s own crofters, it is hard to see why, in these circumstances, there needs to be legislation allowing crofters to appeal the levels of such rents to the Scottish Land Court.

Because any change in this regard would involve tampering with the fundamental principles of crofting law, and because of the widespread conviction – shared, it should be said, by some crofters – that communities benefit from leaving potentially controversial decisions to external agencies, this is to touch on a very delicate area. It might also be thought that crofters would be less likely to embrace community ownership if it involved a diminution of their statutory rights. But it is, all the same, an arguable proposition that a general shift towards community ownership (intended, after all, to give crofters greater control of their own lives) should be accompanied by an overhaul of crofting administration – this overhaul to have the aim of transferring crofting administrative responsibilities from public bodies to crofting communities themselves.

8. Possible Community Ownership of Forestry Commission and Scottish Natural Heritage Landholdings

There is a strong case for examining the possibility of further initiatives of the Laggan type (see Section 3). The purpose of such initiatives would be to transfer the ownership – or, failing that, the management – of Forestry Commission plantations to appropriate community interests. This is all the more necessary in view of the fact that the Forestry Commission – because of continuing administrative centralisation and because of its now huge reliance on contract labour squads operating, very often, from more or less distant urban centres – provides rural communities with comparatively few of the secure, locally-based jobs with which it was strongly linked in the past. Transferring ownership and management of state-owned woodland from the remotely-operated Forest Enterprise to community interests would both counter this trend and enable such interests, over a period, to benefit directly from the substantial capital, which can be generated from successful forestry.

Consideration should certainly be given to offering suitably-located Forestry Commission plantations to crofting communities embarking on community ownership – whether under the provision of the Transfer of Crofting Estates Act or as a result of future reforms of the sort suggested earlier in Section 5. If, for example, crofters on Raasay were to indicate interest in taking on the ownership of the Secretary of State’s crofting estate on that island, it would be good if they wee to be offered the Forestry Commission’s Raasay plantations (also in the Secretary of State’s ownership) as well.

If government were willing to explore this sort of possibility, consideration would clearly need to be given to the basis on which transfers might take place. If free-of-charge transfers were to be ruled out, which seems likely in view of the substantial capital value of mature and semi-mature plantations, then the purchase cost implications of such initiatives would need to be assessed – ideally in the context of such thinking as might be given to establishing a Community Land Purchase Fund of the type suggested in Section 6.

Large parts of the Highlands and Islands – in the shape of National Nature Reserves (NNRs) – are in the ownership of SNH. If it makes sense for the Forestry Commission to be involving communities in the ownership or management of forestry plantations, it might arguably make equal sense for SNH to be involving communities in the ownership or management of these NNRs. Consideration should certainly be given – in cases where appropriate land could be released from the margins of NNRs such as the extensive Beinn Eighe Reserve adjacent to Kinlochewe – to providing SNH land, if or when demand is demonstrated, for local needs housing, for commercial development and for the creation of smallholdings.

9. Possible Community Control of the Foreshore and the Seabed

Consideration should be given by government to transferring the management of Crown-owned foreshores and the seabed from the Crown Estate Commission to local interests.

The most administratively easy approach would be to transfer such foreshore and seabed to local authorities. This would have the advantage of bringing foreshore and seabed development under locally based democratic control.

Consideration ought to be given, however, to transferring appropriate areas of foreshore and seabed to communities moving towards community ownership of the adjacent land. This would have the effect of ensuring that the substantial revenues to be got from fish-farming operations, for example, were directly available to those communities – which are likely to need all the capital they can get.

10. Establishing New Rural Communities, and New Smallholdings on Non-croft Land by Means of Inter-agency Collaboration

Because of my involvement with Skye and Lochalsh Enterprise (SALE), dealing with an area characterised by an expanding economy and a rising population, I am well aware of constraints placed on growth by the lack of available land both for commercial development and for housing – with the related shortage of affordable housing being, in turn, the single biggest barrier in the way of further forward movement. Government, local authorities, public agencies and the private sector ought to address themselves to removing these obstacles in a part of the country where there is clearly no absolute shortage of land.

On this particular front, there is scope for initiatives, which could be launched very readily and without recourse to legislation.

Local Enterprise Companies – in partnership, as circumstances dictated, with agencies such as the Crofters Commission, SOAEFD, local housing associations, Scottish Homes and SNH – could be encouraged, possibly on an experimental basis initially, to establish new rural settlements on, as it were, greenfield sites. Such settlement might combine housing provision (in both the rented and owner-occupied sectors) with the creation of new smallholdings, with the provision of appropriate industrial or commercial premises and with a measure of environmental regeneration (involving, for instance, native woodland).

SALE would certainly be willing to be involved in such an initiative in, for example, the Sleat Peninsula of Skye where there is substantial unsatisfied demand for homes, for crofts and for commercial premises. SALE would also be interested in exploring how a similar inter-agency initiative might tackle the rather different problems which exist in those places – such as Glenelg in the SALE area – where local economies continue to perform less than satisfactorily and where population, as a result, continues to be lost.

The land on which such experimentation might take place could be bought, assuming the necessary funds were available, by the Local Enterprise Company, or by some other organisation, and held by the purchasing agency until such time as it might be sold or transferred on to owner-occupying householders and to whatever body might appropriately be constituted to take charge of such landholdings as would require to be owned and managed by the new community as a whole.

This sort of venture might fall within the scope of the government’s Public-Private Partnership initiative. Elements of new settlements – their owner-occupied housing, their commercial premises and even some parts of their infrastructure – could be developed by the private sector. The private sector could also be involved in woodland regeneration, re-afforestation and the like. The precise way forward, of course, requires a lot of further thought. And the public-private mix would clearly vary with the circumstances of particular cases.

The foregoing paragraphs are founded on the assumption that new rural communities of the type here suggested would be constituted on land, which would sold willingly by its present owner or owners. Failing a willing seller or sellers, however, other means of acquiring such land might be explored (Sections 11 and 12).

11. Revisiting and Reactivating Land Settlement Legislation

Constituting new rural communities is no new concept in the Highlands and Islands. This was done by government on a very large scale in the 20^th century’s opening decades when thousands of crofts and smallholdings, together with dozens of communities, were established on land acquired for this purpose by the then Board of Agriculture for Scotland. It is this land, of course, which can now be transferred to communities occupying it under the provisions of the Transfer of Crofting Estates Act, 1997.

Much of the legislation under which land was acquired for settlement remains on the statute book. Thus the Small Landholders (Scotland) Act, 1911, still vests substantial land settlement powers in SOAEFD as statutory successor to the Board of Agriculture. For example, the Act states that "where the Board [now SOAEFD] are satisfied that there is a demand for smallholdings and that suitable land is available for that purpose, it shall be the duty of the Board [now SOAEFD] to prepare a scheme for the constitution of one or more new holdings on such land, to be occupied by new holders under such terms and conditions not inconsistent with the Landholders Acts as the Board [now SOAEFD] think reasonable" [Small Landholders (Scotland) Act 1991, Section 7 (8a)]. This 1911 Act envisages land being acquired for settlement by agreement. Failing agreement, however, SOAEFD, as successor to the Board of Agriculture, could have recourse to compulsory purchase provisions of the more far-reaching Land Settlement (Scotland) Act, 1919, much of which also remains on the statute book.

Land settlement legislation has not been implemented extensively since the 1920s. It has not been implemented at all since the 1950’s. This is defensible in that, for much of the period from the 1930s to the 1970s, the overall economic contraction and related population loss experienced by crofting areas, and by the Highlands and Islands more generally, were such as to reduce demand for new holdings to levels which could readily be satisfied by the existing supply of crofts – all the more so when depopulation proceeded so far, as it had done by the 1950s and 1960s, to leave many crofts without occupants. In today’s circumstances, however, the demand for smallholdings – demonstrated, for instance, by the large number of individuals who have expressed interest in the New Entrants to Crofting Scheme operated jointly by Local Enterprise Companies and the Crofters Commission – is hugely in excess of the supply of crofts. There is thus a strong case for reactivating, possibly in some revised form, land settlement legislation of the 1911 and 1919 type.

It is my understanding that powers to acquire land under the Small Landholders Act and associated legislation are still available to the Secretary of State – acting, presumably, through SOAEFD.

Smallholdings, incidentally, need to be distinguished from crofts. Provisions for the creation of new crofts were included in the Crofting (Scotland) Acts of 1955 and 1961. These provisions were repealed in1976 by that year’s Crofting Reform Act. This does not mean, however, that smallholdings cannot any longer be created in the Highlands and Islands under the land settlement legislation referred to above. It means only that these smallholdings cannot presently be registered as crofts.

This deficiency – if it is a deficiency – could be remedied by making an appropriate amendment to crofting legislation. Alternatively, the occupants of new smallholdings – who, as agriculturists, would automatically be eligible for the full range of agricultural supports and aids – could be provided with some equivalent of those assistance packages, such as the Crofters Building Grant and Loan Scheme (CBGLS) and the Crofting Counties Agricultural Grant Scheme (CCAGS), which are confined to registered crofters. Indeed the opportunity might be taken to rationalise CBGLS and CCAGS in such a way as to ensure that assistance is available on a consistent basis to those in need of it – rather than, as at present, making eligibility depend as much on tenurial status as on financial circumstance.

There are arguments against bringing the smallholding residents of any new settlements within the provision of the Crofting Acts. Keeping such settlements outside the scope of the Crofting Acts would allow these settlements to be established and developed in more flexible ways than would be possible if their smallholding occupants were automatically registered as crofters.

More immediately to the point, however, is the possibility that land settlement legislation could conceivably be used to establish new settlements – of the sort suggested earlier (Section 10) – in instances where there are no willing sellers of the requisite land. If government is at all interested in proceeding with such settlements, even on the most tentative basis, such land settlement legislation as is still extant should certainly be revisited prior to any settlement initiative being launched.

This might best be dome within the context of the overall way forward suggested below in Section 15. Clearly, land settlement legislation is most unlikely to be used today in exactly the way it was used 60 or 70 years ago. But if such legislation can help to achieve greater community ownership, so much the better – in that it would be speedier to utilise existing legislation than to promote new legislation.

The land acquisition powers – whether the by-agreement powers or the compulsory purchase powers – which the Secretary of State possesses by virtue of land settlement legislation are more flexible and further-reaching than the land acquisition powers possessed by Highlands and Islands Enterprise (HIE). The latter powers, which are similar to those possessed by local authorities, relate largely to acquiring the relatively limited areas needed for new buildings and the like. The former powers relate to acquisition of much larger tracts of land to be used for the formation of new rural communities.

12. Revisiting the Highlands and Islands Development Board’s Land Reform Proposals

For reasons touched on immediately above, the land settlement legislation of the early 20^th century has more to offer in current circumstances than the land reform proposals made by the Highlands and Islands Development Board (HIDB) in 1978. These proposals – put to the last Labour government and formally rejected in 1980 by the then incoming Conservative government – were concerned primarily with measures intended to lead to the creation (possibly by compulsion) of tenanted farms in specific localities to be identified and designated by the Board on privately-owned estates. While HIDB thinking is worth reviewing in the light of today’s requirements, the HIDB’s largely agricultural approach to rural resettlement is less attractive than a more integrated approach combining the creation of smallholdings (where appropriate) with housing provision, with business development and with environmental initiatives. The rationale underlying this cross-sectoral way forward is touched on in Section 10 and returned to below in Section 15.

The powers, which the HIDB requested in 1978, were, by modern standards, both cumbersome and bureaucratic. They involved a veritable plethora of committees, designations, plans and consultations. Reviewing these 1978 proposals in 1991, I made the point the powers requested by the HIDB were by no means dissimilar to the township re-organisation powers granted to the Crofters Commission by the Crofters (Scotland) Act, 1955. These latter powers – as the Commission discovered in 1960 at the end of its wholly vain and 4-year long attempt to re-organise Big Sand in Wester Ross – were so convoluted in their operation as to be utterly inoperable. Hence my 1991 conclusion: "Had the Highland Board actually obtained the powers it sought, very little would have changed. The complex designation procedures outlined in its 1978 paper bore more than a passing resemblance to those which the Crofters Commission had been obliged to follow in the course of its attempts … to re-organise townships like Big Sand. Although the HIDB gained considerable public support for its proposals … it is highly probable that, had it been given the legal authority to put its thinking into practice, the Board, like the Commission before it, would have become hopelessly enmeshed in virtually endless rounds of consultation and dispute". (Hunter, 1991 pp165-66).

That remains my opinion. What we need to be doing today is facilitating both community ownership and the emergence of new types of rural settlement, not trying – probably fruitlessly – to force private landlords to create new farm tenancies.

There is, however, one facet of the HIDB’s thinking which could conceivably be adapted to meet current needs. Although less than enthusiastic about compulsory purchase of land, the HIDB was prepared to contemplate compulsory leasing. It has been suggested to me that such an approach might provide the means of addressing problems arising, as explained above in Section 10, from the shortage of available land in certain locations for both housing and commercial development. If local authorities and Local Enterprise Companies (LECs) were empowered to compel owners to make such land available on a long-lease basis (for a period of, say, 99 years), and if the rents payable for such land were related to its underdeveloped value, then land could be made available for housing and commercial development by means which would avoid the very substantial up-front expense arising from its outright acquisition by local authorities, LECs and other agencies of that sort.

13. Making the Provision of Public Funds to Landowners Conditional on their Releasing Land, as required, for Housing, Development and Settlement

It seems odd that landowners can be in receipt of all sorts of public funds – in relation, for example, to land purchase (in the case of environmental bodies), agriculture, afforestation, nature conservation and development – while simultaneously being entitled to refuse the release, even at open market prices, of such land as might, in the public interest, be required for housing, for commercial development or, conceivably, for new rural settlements of the sort envisaged above in Section 10.

Perhaps Local Enterprise Companies (LECs), which are approached for assistance by an individual or organisation owning land in a locality where there is an unsatisfied demand for land for housing, development or the like, should refuse assistance until such time as the individual or organisation in question undertook to sell such land as might be required to enable housing or other development to proceed. This would have clear benefits from a public interest point of view. It would encourage landowning applicants for development aid to capitalise their land resources rather than draw on public funds when they wanted to embark on new business initiatives on their own account – thus minimising their need for LEC aid. It would also ease the land acquisition difficulties confronting other perspective developers, housing associations and the like.

Other public agencies might be encouraged, or might be told by government, to develop similar policies. Thus grant aid given for land purchase purposes to organisations such as RSPB, the JMT and the Woodland Trust, might be made conditional on these organisations being prepared to resell, for housing and development purposes, appropriate portions of the estates such aid is used to acquire. This objective would be all the easier to attain if bodies like the RSPB and the JMT were required to apply, as suggested earlier in Section 6 to a Community Land Purchase Fund, rather than to SNH and the NHMF, for assistance with such future estate acquisition as they might wish to pursue.

This type of assistance with land purchase might also be made conditional on the recipients giving communities resident on estates they are thus helped to buy a direct and guaranteed say in the future management of such estates. It might even be made clear to environmental organisations and similar bodies that public funding for their land acquisition programme will henceforth be conditional on their proceeding in partnership with community groups, local authorities and the like – which is what happened, as previously noted in Section 6, in the case of Eigg. Such an approach would have the huge advantage of ensuring that the environmental interest in a particular estate purchase would be secured in such a way as to enable other interests – such as that of the local community – to be secured simultaneously.

There might also be investigation of the possibility of attaching new conditions to Forestry Commission grants and other aids of that kid – these conditions to have the aim of involving interested communities in the management of land benefiting from such assistance.

14. Other Possible Regulatory Initiatives

Calum Macdonald MP has suggested, at the March 1997 meeting of the Convention of the Highlands and Islands and elsewhere, a number of possible means by which the market in Highlands and Islands estates might usefully be regulated by government. Mr Macdonald makes the point that government, within an overall free market framework, already regulates the acquisition of private companies – through the Monopolies and Mergers Commission (MMC), for example. Mr Macdonald proposes the establishment of a Land Commission, which just as the MMC already does with regard to proposed sales and purchases of private sector companies, would have powers to veto, or impose conditions on, proposed sales and purchases of privately-owned estates.

Clearly, if government was minded to establish such a Commission, its powers, and the public interest criteria in respect of which these powers might be exercised, would need careful consideration. Environmental considerations and community interests, Mr Macdonald suggests, would loom large in any such consideration.

A Land Commission of the type suggested by Mr Macdonald, might be asked to draw up something in the nature of a Land Use Code. The code might include environmental and community interest provisions. The former might deal, for example, with matters like controlling red deer numbers and facilitating native woodland regeneration. The latter might deal with the need, touched on earlier in Sections 10, 11 and 12, to facilitate the release of land for housing and development. And in order to give teeth to such a code, eligibility for as wide as possible a range of public funds (such as those listed in Section 13) might be conditional on the observation of the code’s provisions.

Even in the absence of a Land Commission and associated regulation, proposed estate purchases might be made subject to powers analogous to those already exercised by government in the arts market. These powers enable government when a painting, for example, is to be sold overseas to block the sale for a period sufficient to explore the possibility of an equivalent price being raised by a British gallery. Perhaps the Secretary of State for Scotland might be enabled to intervene in a similar way when an estate subject to a prospective community purchase is sold to another buyer.

Private buyers of Highlands and Islands estates above a certain size, it has been suggested, might be required – in advance of their purchases being sanctioned by a Land Commission of the type suggested by Mr Macdonald – to prepare management statements summarising what they intend to do with their estates. These statements might include a range of developmental, environmental and other objectives. Purchasers might also be required to lodge a substantial bond with the Land Commission at the point at which purchases are sanctioned – this bond to be forfeited, at the end of a stipulated period, in instances where owners do not perform in accordance with their management statements.

One beneficial consequence of regulation of this sort would be to reduce speculative pressures of the type which have been produced by the wholly unregulated market in Highlands and Islands estates. Any ensuing fall in land prices would, of course, make matters easier for communities contemplating estate purchases.

15. Progressing Community Ownership: An Agenda for Action

Scottish Office Industry Minister Brian Wilson MP announced on 12 June 1997 that Highlands and Islands Enterprise (HIE) has been asked to establish a project unit to assist with initiatives intended to achieve community ownership. This is very much welcomed. At the time of writing (20 June), it remains to be seen how this project unit will operate. In principle, however, the unit could progress most, or all, of the suggestions made in this paper.

For this to happen, the unit – to which staff might be seconded, as required, from other agencies and organisations such as SOAEFD, the Crofters Commission, Scottish Homes, local authorities and the like – would be required both to promote action on the ground and to develop thinking on reforms, which can only be achieved, in the longer term, by means of legislation.

A unit constituted in this way would be in accordance with Mr Wilson’s view that approaches to rural development in the Highlands and Islands require to be more integrated, more inter-agency based, than hitherto.

Integrated action of this type would also be in accord with current thinking at the European Union (EU) level – the EU’s recent Cork Declaration, for example, having stated that rural development policy should be "multi-disciplinary in concept and multi-sectoral in application" (Bryden, 1997).

The project support unit, then, might immediately:

The support unit project might also open discussions with the Forestry Commission and Scottish Natural Heritage on how communities might more readily become involve directly in either the management or the ownership of publicly-owned plantations and nature reserves (Section 8).

The foregoing paragraphs require no legislative change and constitute, therefore, an agenda for prompt action. While such action goes forward, however, the community ownership support unit project might also give consideration to the legislative and other reforms that would be required to:

These particular reforms might be undertaken, in due course, by the Scottish Parliament. It would be good, however, if they could be given some detailed consideration in advance of the Parliament coming into existence.

If the community ownership project support unit were to be asked to take on responsibilities of the type suggested here, thought might be given to equipping the unit with something in the nature of a consultative panel which MPs, councillors and other appropriate individuals might be invited to join. The panel could conceivably be a sub-committee of the Convention of the Highlands and Islands. But irrespective of how exactly such a grouping were to be constituted, its function would be to ensure the widest possible input into, and the widest possible backing for, measures intended to promote the community ownership of land and associated resources.

References

Convention of the Highlands and Islands, Minutes of Second Meeting, 3 March 1997

Scottish Labour Party, New Life for Scotland’s Rural Communities, Glasgow, 1997

J. Hunter, Towards a Land Reform Agenda for a Scots Parliament, Rural Forum, Perth, 1995

Small Landholders (Scotland) Act, 1911

J. Hunter, The Claim of Crofting: The Scottish Highlands and Islands, 1930 –1990, Edinburgh, 1991

J. Bryden, What Might Cork Mean for Rural Scotland? Rural Forum Discussion Paper, Perth, 1997

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