Change is coming to the landed estates in Scotland

Recommendations made to the Scottish Government by the Scottish Land Commission could have far-reaching consequences for rural land ownership, writes Hamish Lean.

12 April 2019

The Scottish Land Commission recently published their report into what it describes as the issues associated with largescale and concentrated land ownership in Scotland. 

The report draws a number of conclusions and makes recommendations to the Scottish Government about potential future legislative change that might have far-reaching consequences for rural land ownership.  

The Commission takes the view that the evidence which it has gathered indicates that the issues associated with largescale and concentrated rural land ownership directly impact economic and social wellbeing. 

The Commission recognises some advantages in the current pattern of land ownership predominantly related to economies of scale. However, it considers that these advantages are outweighed by disadvantages related to imbalances of power or to a deficit in participation created by the concentrated pattern of land ownership and by inadequate land use decision making processes.  

It finds that the pattern of market and social power evident in concentrated land ownership has parallels with monopoly power and the Commission takes the view it should be controlled in the same way. 

The Commission concludes that a concentration of land ownership has a direct influence on the public interest.

There is evidence of the adverse effects of excessively concentrated market and social power causing significant detriment to communities, and there is a need for a statutory framework to mitigate those risks. Such a framework would allow the Scottish Government to deliver on its ambitions for land reform and the goals set out in the Scottish Ministers Land Rights and Responsibilities Statement.

It is to the effect that “the overall framework of land rights, responsibilities and public policies should promote, fulfil and respect relevant human rights in relation to land, contribute to public interest and wellbeing, and balance public and private interests. The framework should support sustainable economic development, protect and enhance the environment, help achieve social justice and build a fairer society.”

The Commission makes a number of recommendations to Scottish Government. Whilst these fall short of imposing a cap on land ownership the Commission does recommend that Scottish Government introduce a power to apply a public interest test and approval mechanism at the point of a significant land transfer. 

The Commission envisages criteria based on scale, value, location, proposed land use and fragility of community and suggests that the power to apply the tests should sit with local authorities, with a potential appeal to Ministers, and that the Scottish Government introduce a legal requirement for landholdings above a certain size to prepare and engage on a management plan incorporating community engagement.  

The Commission also recommends that Scottish Government introduce a power to the Commission of statutory review underpinned by codes of practice to assure accountability on the operation of landholdings in relation to the principles of land rights and responsibilities.  

This is a potentially very significant recommendation. At the moment, the Land Reform (Scotland) Act 2016 gives power to the Tenant Farming Commissioner to issue codes of practice and to investigate breaches of the code. The TFC is not able to impose a penalty in respect of a breach of the code but his findings are made public. The Scottish Land Commission has no such power. 

Recently however, it did try to introduce a “code of practice” in relation to community engagement in respect of management decisions relating to land.  There was considerable resistance to this suggestion not least of all from NFUS pointing out quite correctly that the SLC had no power to impose a code of practice. The SLC eventually relented and have in fact introduced what it describes as a “protocol” which is simply a suggested guide to good practice but it has no statutory authority.  

It seems clear that the SLC regard its inability to impose codes of practice as a shortcoming and is seeking an extension of its powers. It would be concerning if in due course the Commission gained the power to impose penalties on parties whom it found to be in breach of a code of practice and the industry will be monitoring matters with close interest. 

The Commission makes a number of other recommendations to Scottish Ministers. To be absolutely clear, the Commission does not conclude that private ownership of land is a bad thing and in fact takes the view that it is in the public interest to encourage a more diverse private ownership of rural land in Scotland. Its concern revolves around largescale concentrated landholdings and the implications which they have for local communities.

It is clear that change is coming to the traditional landed estate in Scotland. The Commission proposes to hold a conference in October of this year to discuss its report and recommendations. 

It is vital that all those with an interest in the sector pay close attention to and actively engage in the process in order to help shape the likely outcomes.  

This article was first published in the April 2019 edition of Farm North East magazine