Social Land Ownership

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Not-for-Profit Landowning Organisations in the Highlands and Islands of Scotland

Sector Review 2001

Andy Wightman and Graham Boyd, April 2001

Contents

INTRODUCTION

In December 1996 a paper was prepared profiling the range of not-for-private-profit (NfP) organisations in the Highlands and Islands that owned, leased, or aspired to own or lease land (Wightman, 1996). This paper reviews the 1996 findings and updates these to take account of recent developments in the NfP sector. The following chart summarises and compares the key changes in the NfP profiles:

Summary of Key Changes 1996 - 2001

WHAT ARE NFP ORGANISATIONS?

Not-for-private-profit (NfP) organisations are bodies set up to pursue social, environmental, economic and democratic aims for a defined constituency of people. They have been around for over 150 years and can trace their origins back to the Chartist, Co-operative and Friendly Society movements of the mid-19th century. Their aim is to bring social benefit to their members either through economic activity or collective action. They range from local community associations, self-help groups and voluntary associations to large consumer and producer co-operatives, national voluntary conservation organisations and mutual financial institutions. Not-for-profit organisations are defined through their legal structure and constitutions as being organisations in which:

In addition, NfP organisations are characterised by certain values and attributes. For example:

It should be stressed that NfP organisations are not necessarily non-profit making. The critical issue is that any profits made cannot be distributed to shareholders but are retained by the organisation (or its members in the case of co-operatives and mutuals) in order to further its objectives.

WHO ARE THE NfP LANDOWNING ORGANISATIONS?

This report is concerned with those NfP organisations which own land, lease land, manage land by agreement, or aspire to own land in the Highlands and Islands and who do so as a primary or major part of their activities.

Organisations are included that own significant landholdings (generally in excess of 1 acre). In addition, some organisations are included which, although they may not meet the strict definitions outlined above, aspire to do so through sharing many of the values and attributes of NfP organisations. Such bodies include the Woodland Trust, Clan Donald Lands Trust, Hoy Trust and Hebridean Trust whose membership has no role in the election of their Board or Council (therefore lack a democratic structure) but who nevertheless share all other characteristics of NfP organisations.

A number of such organisations have been set up specifically to purchase or receive gifts of land in the Highlands and Islands. The Stornoway Trust was the first to succeed in a significant way, being gifted 69,000 acres in Lewis in 1923. Earlier, in 1908, the Glendale Estate on Skye was partially transferred to its crofting tenants by the Government’s Congested Districts Board through a 50-year purchase arrangement, which saw the full transfer of the property to the crofters in 1958. Three other crofting communities – Eoligarry 1900 (Barra), Staffin 1904 (Skye) and Syre 1899 (Sutherland) - were also offered similar 50-year purchase arrangements but in 1911 they declined the Board’s offer to purchase the properties in favour of remaining crofting tenants.

The National Trust for Scotland (NTS) embarked on a series of purchases starting in 1931. Most notable were Glencoe and Kintail, which were made possible by the fundraising efforts of mountaineers including the wealthy benefactor Percy Unna. After the war there was a steady expansion of ownership by NTS but few other NfPs were involved. The major expansion came in the late 1970s and 80s when national voluntary conservation organisations such as the RSPB, SWT and JMT began purchasing large areas of land primarily for natural heritage purposes.

In the early 1970s the innovative Clan Donald Lands Trust - a cultural organisation with a global membership - bought from the Clan Donald chief the last remaining 20,000 acres of clan land in the possession of the MacDonald family in the Sleat peninsular of Skye. In 1973 on Hoy in the Orkney Islands the Hoy Trust was being formed to receive a gift of 12,500 acres of land from the owner of Hoy estate.

In 1982 a little reported Strathspey community enterprise - Dalnavert Community Co-operative - was forging a new approach to social ownership. It was the first non-crofting community group in the region to buy land and mange it on a co-operative basis as a club farm. In doing so it was reconnecting with the region's earlier crofting history of club farms of 1820 – 40 and those such as Glendale and Keodale which were established at the beginnings of the 20^th Century. Ten years after Dalnavert in the early 1990s crofters again began taking ownership of land - in Assynt (1993), in Borve & Annishader (1993) and more recently in Melness (1994), Bhaltos (1999) and Kylesku (2001).

Wider community-based groups too have become very active. Bodies such as the Laggan Forestry Initiative have emerged with aspirations to own land. Most recently, partnerships or consortia of community-based groups, conservation interests and The Highland Council have been formed and have successfully bought the Isle of Eigg and the Knoydart Estate.

CHANGES SINCE 1996

The NfP sector is significant in the Highlands and Islands (defined as land north of the Highland line and comprising around 10 million acres). Existing NfPs own, lease or manage by agreement 658,308 acres or 6.58 percent of the land area.

This is equivalent to over 65 percent of land owned by the Forestry Commission in the region, two and a half times the area of the Scottish Executive Rural Affairs Department Crofting Estates and almost nine times the land area of Scottish Natural Heritage in the region (see Table 1).

** Organisations added to survey, which existed in 1996 but were omitted from the survey, include:

Overall an additional 113,920 acres of land (from 544,388acres to 658,308acres) have become owned, managed or leased since 1996, an increase of 21 percent. This increase is attributable to:

The NfP sector has seen growth take place in three specific areas: additional property acquisitions by existing NfP owners; aspiring NfP bodies becoming owners; and the emergence of new NfP organisations. In addition the survey shows that 8 NfPs aspire to own, manage or lease some 39,035acres.

Expanded estates of conservation bodies

Success in moving from aspirations to purchase or management

Expansion of community initiatives

Emergence of new NfP land owning bodies

With the exception of Kingsburgh Common Grazings (formed in 1920), Keoldale Sheepstock Club (formed in 1926), the Hebridean Trust (formed in 1982), and Plantlife (formed in1989) all the following organisations have been set up since 1996. They are all new to the field of owning, leasing, co-managing or aspiring to own land in the Highlands and Islands. Kingsburgh and Keoldale have, of course, been engaged in co-management as crofting tenants since their formation.

KEY CHARACTERISTICS

Not-for-Profits range from local organisations with only a few members and negligible turnover to large UK bodies with thousands of members and turnover in the £ millions. Some of the key characteristics of such organisations are as follows.

Legal Status

A range of legal structures is available for NfP organisations depending on their purpose. Historically, Friendly Societies and Co-operatives were the most common but in recent years more organisations have taken advantage of the flexibility of a company structure under the Companies Acts.

The most common legal structure for NfP landowners in Scotland is the company limited by guarantee with no share capital. This structure allows for the full participation of members who control the company and whose personal liability is limited, usually to under £10. The absence of share capital prevents members benefiting personally from their involvement with the company.

Trusts are set up through a Trust Deed, which sets out the objectives and structure of the trust. It is unusual for a Trust to be a democratic body although this is possible as, for example, in the case of the Stornoway Trust because it is incorporated in Parliament. It is less flexible than a company but this can be of benefit where land is intended to be held in perpetuity for fixed purposes. It should be noted that the word "trust" is often used in the names of organisations which are not legally trusts (e.g. Scottish Wildlife Trust, John Muir Trust, Assynt Crofters' Trust) but which are actually companies without a share capital. The main purpose behind using the word Trust in the company’s name is to convey to the wider public, public agencies and charitable funders that the organisation’s primary purpose is social and/or charitable.

In addition to the legal structure, some NfP organisations enjoy charitable status. In Scotland this is obtained via the Inland Revenue. In England and Wales, charities are registered with the Charity Commissioners.

Of the 46 bodies in this report:

Objectives

The objectives of NfP land owning bodies range from:

Scale

The scale of NfP land ownership varies widely. Some organisations consist of a small number of local people (to whom membership is restricted) whose sole function is to own and manage a local landholding and whose financial turnover is low. At the other end of the scale are organisations with a national (Scottish or UK) scope, owning parcels of land across the country with thousands of members and financial turnover in the £ millions.

Broadly speaking the smaller organisations tend to have:

The larger organisations tend to have:

Land Ownership

Organisations may own a small local area for local community benefit or be national organisations with national objectives owning large areas of land across the country.

CONTEXTUAL CHANGES SINCE 1996

Sector Development

The not-for-profit sector is becoming more mature, complex, diverse, experienced and innovative. In 1996 the contemporary idea of community ownership of land was being fought out against the background of titanic struggles in Eigg and Knoydart. In the intervening period almost everything that could happen to change the context for the sector has changed. The most obvious developments are:

Such developments have dramatically altered the prospects for communities wishing more say in the way in which land is owned and used to the extent that aspirations to own, lease or co-manage land are now mainstream.

Broader Developments

At the same time as these developments have taken place, other related changes have been taking place.

Following the 1997 General Election, public bodies now have greater freedom to operate in the land market. This is typified by the purchase by HIE of the Orbost Estate on Skye. Significantly, this initiative marked a break with traditional public sector activity in that it actively sought to promote a partnership with the local community (although with mixed success).

There is also a growth in land ownership by private charitable trusts (e.g. the Applecross Trust and the Blair Charitable Trust). These are set up by private landowners with charitable status but are not membership organisations. The forthcoming review of Scottish Charity Law by the McFadden Commission may have implications for such private charities and possibly provide opportunities for communities to have a greater stake in the running of such bodies.

Finally, there are signs that tenant farmers are becoming more active in buying land. The tenant farmers on the Island of Great Cumbrae successfully purchased their farms when the island was put up for sale. Similarly, tenant farmers on the Panmure Estate in Angus have been keen to pursue a tenant farmer buyout. Although such initiatives appear currently to be promoting individual ownership, it might not be long before some co-operative initiatives are pursued in similar circumstances.

Focus on Management

A significant development since 1996 has been the growth in co-management initiatives between local communities and Forest Enterprise. One new example (Minard) is included in this survey together with the older Laggan initiative but there are now a growing number of such projects running across Scotland. The Forestry Commission has set up a Forestry for People Panel to explore ways of improving the level of community involvement in forestry. Inevitably there will be continued demands from some quarters for full-scale ownership as exemplified by the aspirations of the North Sutherland Community Forest Trust.

A Re-Evaluation of History

The Glendale Estate is included in this review having been omitted from the 1996 review. Glendale has often seemed to get dismissed rather readily in discussions of crofting and community ownership. Part of the reason for this is because of the perception that the share-ownership model of ownership has failed. Each shareholder has been free to sell their share (which comprises a house, a croft, a share in the common grazings and a share in the club property). Some crofting activists have argued that the structure of the Glendale crofting community has broken down. However when examined in a wider context what has happened in Glendale is exactly the same as has happened in many other crofting communities following the 1976 Crofting Act except that croft ownership happened some 68 years earlier. What crofting activists have failed to grasp is that Glendale has in fact been in a stronger position to ensure that its common grazings and club property are collectively run because they cannot be sold independent of the house and croft. In addition Glendale has enabled crofters to sell up and for newcomers to gain entry. In many ways this is similar to communities such as Birse, Stornoway, and Eigg which are made up of local residents. Some people sell their home and move out and others buy them and move in. Such a model may be inappropriate for a pure crofting trust but may be perfectly satisfactory for a community trust.

The historical context is also being brought to the fore by the efforts of the Birse Community in reviving ancient commonty rights. Across Scotland these rights still exist but are seldom recognised or actively managed. Similarly the Forres Community Woodlands Trust, who own former Common Good Fund land, reminds us that Municipal mutualism once flourished and that some of these assets are still held in trust for the community (sometime quite profitably as in the case of the Dornoch Firth Mussel Fishery run by the Tain Common Good Fund and Highland Council). Suggestions that the eastern part of the Cuillin on Skye might be a Crown common also highlight the possible implications for community land management of ancient common rights.

THE FUTURE

The Not-for-Profit Sector is undergoing a period of very active growth and development. New legislation on community and crofting right-to-buy together with greater openness by public agencies to joint or co-management is likely to increase the scope for the sector to become involved in the management of land assets.

For the dramatic successes of recent years to be consolidated and extended the sector requires:

As the sector matures it will increasingly be faced with the challenge of deciding how to retain momentum, create innovation, improve performance and support weaker NfP members. To do this it will increasingly have to work towards devising approaches, which create the conditions for coalition-building and fight against the forces, which seek fragmentation. Social movements in many different places and at differing times have had to grapple with these societal tendencies. In Scotland it has been no different. Older NfPs have struggled in isolation and with limited resources for many decades. That they have survived is testimony to their determination and perseverance in the face of indifference and in some instances hostility. Currently community ownership is a fashionable idea but fashions change like the seasons and the NfP sector will need to be capable of withstanding and adapting to these changes. To do this the sector needs to begin seeking out how other sister social land movements in other countries have confronted and overcome these challenges. The Trust for Public Land and the Land Trust Alliance in the United States and other social land movements in Europe could provide the sector with a useful set of road maps for the journey ahead.

SUMMARY OF KEY NfP LANDOWNING FEATURES

In this section a summary of the key features of the NfP landowning sector is provided in table format. It covers the following three areas:

Table 3: Legal Structure and Charitable Status

Table 4: Membership Levels and Financial Turnover

Table 5: Land Ownership

The NfP Organisational Profiles 1996 and 2001 provides additional details and sources of information on each organisation.

ACKNOWLEDGEMENTS

This report was commissioned by Highlands and Islands Enterprise Community Land Unit in partnership with Scottish Natural Heritage as part of the preparations for the Not-for-Profit Landowners Project Group Seminar in Plockton on 27-28 April 2001.

As authors we are grateful to all the individuals who took the time to assist in gathering details about the not-for-profit land sector.

Thanks go to:

Claire Belshaw, Alexander Bennett, Duncan Bryden, Pamela Burnside, Robin Callander, Eoghan Carmichael, Alan W Cowe, Alastair Cunningham, Margaret Davidson, Angela Douglas, Michael Foxley, Ellanne Fraser, Maggie Fyffe, Nigel Hawkins, Trish Haworth, Robert Hollingdale, Andrew Little, Euan MacAlpine, Anna MacConnell, Peter Macdonald, Iain Maciver, Norman MacKinnon, Hugh MacLellan, Rhona Macleod, Peter Mayhew, Bill Middlemiss, Alaistar Nicolson, Jan Nicolson, Roy Osborne, Ian Rees, Wilma Robertson, Scott Russell, Michael Scott, Neal Stephenson, John Toal, Fabio Villani, Angela Williams and Sue Wylie.

REFERENCES

Wightman, A. (1996), Not-for-profit Landowning Organisations in the Highlands and Islands of Scotland. Organisational Profiles. Report prepared for Highlands and Islands Enterprise and Scottish Natural Heritage, Inverness.

FURTHER INFOMATION

Further information on individual NfP organisations can be found in the documents – NfP Organisational Profiles 1996 and 2001