The Scottish Government

« Previous | Contents | Next »

Listen

2. GOVERNANCE

2.1 Background

2.1.1 Part of the remit of the CoIoC was to identify any administrative and legislative changes needed in the role and functioning of the Crofters Commission as a regulator, in light of the analysis and vision they had produced on crofting. Evidence gathered by the CoIoC on current governance arrangements highlighted that respondents felt the Crofters Commission should be more accountable; have greater area representation; enforce regulations more effectively; be better aligned with other relevant partners; and should have closer communication with local people and Grazings Committees.

2.1.2 The CoIoC recommended a separation in the functions of (1) crofting regulation and enforcement, (2) crofting development and (3) the maintenance of the crofting register. It considered that greater local accountability and ownership was required in the implementation of the regulation and enforcement function.

2.1.3 The Government accepted this recommendation and agreed that there should be a separation in the functions of (1) crofting regulation and enforcement, (2) crofting development and (3) the maintenance of the crofting register. It agreed that crofting regulation and enforcement should be retained by the Crofters Commission, crofting development should be undertaken by Highlands and Islands Enterprise ( HIE) and a new Crofting Register should be established by the Registers of Scotland.

2.1.4 The CoIoC recommended that the Crofters Commission should be wound up and that the regulation and enforcement function should be discharged in future by a new Federation of Crofting Boards, a single organisation consisting of 7-10 elected Local Crofting Boards and an executive supplying staffing support, finance and other central services to these Boards.

2.1.5 The Government did not agree with this recommendation. It considered the Crofters Commission to have experience and knowledge of crofting issues, which was important to preserve. However, it agreed that the Commission needed root and branch reform to make it more transparent, democratic and accountable. The Government response stated that the Crofters Commission should be retained but radically reformed and reconstituted. The response went on to state that the Crofters Commission had recently made some strides towards becoming more sensitive to local circumstances through establishing Area Commissioners and reinvigorating the assessors network and the Government welcomed these developments but believed the Commission could go much further. It proposed that the Crofters Commission should remain a Non-Departmental Public Body ( NDPB) but be reconstituted with subordinate Area Committees. The Board of the NDPB would be made up of the Chairpersons of the Area Committees and a minority of ministerial appointees, including the Convenor of the NDPB. The reconstituted NDPB would assume responsibility for staff, finance and other central services but would look to share corporate services in line with the principles of Efficient Government.

2.1.6 The Government proposed that there should be a maximum of six Area Committees to ensure that they are sufficiently large enough to avoid conflicts within communities. Legislation might provide for the following Committees to be established:

• Orkney and Shetland
• Western Isles
• Northern Highlands
• Southern Highlands
• Skye, Lochalsh and Lochaber
• Argyll, Bute, Arran and Cumbrae.

The Committees would cover both the existing Crofting Counties and the other crofting areas to be designated elsewhere in the Highlands and Islands under the 2007 Crofting Reform Act.

2.1.7 In proposing the Area Committees, consideration had been given to the workload, ease of travel within the Area Committee area and alignment with Local Authority boundaries. Each Area Committee would take regulatory decisions for its area. However, the Area Committees would be subordinate to the Crofters Commission Board and would exercise delegated powers in the name of the Crofters Commission. Their regulatory policies and individual decisions may be subject to appeal to the regulator before any appeal may be made to the Land Court.

2.1.8 The Government response stated that each Area Committee might be expected to comprise up to twelve members, with a majority being crofters. Seven members of an Area Committee would be crofters elected by crofters and two members would be nominated by the relevant Local Authorities. Having Local Authority representation on Area Committees would ensure that crofting regulatory decisions took account of Local Authority housing, planning and economic development policy. A further three members of the Area Committee would be appointed by the Board of the Crofters Commission in order to ensure appropriate representation of other crofting interests, such as landlords and community trusts. Each Area Committee would elect its own Chair from amongst the crofter representatives and crofters would always be in the majority on the Area Committee and on the Commission itself.

2.1.9 The CoIoC recommended that responsibility for the development of crofting should be given to a powerful Crofting and Community Development body, ideally within HIE.

2.1.10 The Government response stated that a number of different agencies impact on crofting and that they should all contribute to the development of crofting. Recognising the contribution that crofting can make towards the socio-economic development of the Highlands and Islands, it believed that it was important that crofting and community development should not fall to a separate "body" within HIE but should instead be treated as an integral part of the agency's mainstream economic and social development work. The crofting development function would be carried out by HIE in exercise of its functions under the Enterprise and New Towns (Scotland) Act 1990. This would ensure that the contribution of crofting and crofting community development is considered within the broader context of rural development in the Highlands and Islands, particularly in the more remote and fragile areas. The function would be transferred to HIE as soon as was practicable and, following the transfer, would be overseen by HIE's Strengthening Communities Group, working closely with HIE's area based teams.

2.1.11 The ColoC recommended that there should be an annual "State of Crofting" Report. The Government agreed with this recommendation insofar as it will expect the reconstituted Crofters Commission to report to Ministers and Parliament in this way. Current legislation requires the Crofters Commission to make an annual report to the Scottish Ministers on the exercise and performance of their functions and requires Scottish Ministers to lay a copy of the report before Parliament with such comments as they may think fit to make. Similar arrangements would be likely to apply to the Commission in any new legislation, so it was considered that this requirement would be rolled up into the new arrangements, with the "State of Crofting" report having within it the formal report and accounts of the Commission.

2.2 Issues for consideration

2.2.1 Main functions of the Crofting Commission

2.2.1.1 The Government's response agreed that there should be a separation of the Crofters Commission's functions. This will enable the Crofters Commission to focus on the regulation and enforcement of crofting. The CoIoC collected evidence that a higher proportion of crofters considered the Crofters Commission to be more ineffective than effective in both its development role and in its regulatory role. The Government agreed with the Committee's assessment that there is a tendency for the regulatory workload of the Crofters Commission to "crowd out" its capacity for crofting development work. The Government considers that there is a clear benefit to the crofting community in having a body that will devote its entire resources and effort solely to the regulation and enforcement of crofting. Also, the Government considers that crofting and community development should be an integral part of the work of the development agency for the Highlands and Islands, which is HIE. By focusing on the regulation and enforcement of crofting, this will ensure that the Commission is able to address some of the key concerns expressed to the ColoC in relation to the regulation of crofting, such as absenteeism and the neglect of crofts.

2.2.1.2 In order to focus the Crofters Commission on the regulation of crofting, it is necessary to amend the current duties of the Commission. The draft Bill removes certain duties from the Commission that are relevant to crofting development rather than the regulation of crofting. HIE will exercise its new functions under existing powers provided under the Enterprise and New Towns (Scotland) Act 1990, which established HIE.

2.2.1.3 The draft Bill proposes that the name of the Crofters Commission be amended to the Crofting Commission. This proposed change is intended to reflect the fact that the body will be focused on regulating crofting to ensure that it makes a full contribution to the sustainable rural development of the Crofting Counties.

2.2.2 Constitution of Area Committees

2.2.2.1 The Government aims to make the Commission more democratic and accountable through the creation of Area Committees. Area Committees will be part of the Crofting Commission and will take regulatory decisions for the areas they cover.

2.2.2.2 The draft Bill provides the power to establish the Area Committees, which will exercise powers and duties delegated to them by the Crofting Commission. Ministers will be able to prescribe the powers and duties that must be delegated to the Area Committees and these are likely to include the main regulatory decisions such as assignations, absentee action and action to tackle neglect.

2.2.2.3 It is proposed that there should be six Area Committees as set out in the Government's response:

• Orkney and Shetland
• Western Isles
• Northern Highlands
• Southern Highlands
• Skye, Lochalsh and Lochaber
• Argyll, Bute, Arran and Cumbrae.

2.2.2.4 The table below shows the proposed areas to be covered by Area Committees. The areas to be covered refer to Local Authority areas and former Local Authority District areas:

2.2.2.5 The draft Bill provides a power for making subordinate legislation which will determine the number of Area Committees. However, this consultation provides an opportunity to seek initial views over the proposed boundaries of the Area Committees. The proposed areas are considered to be large enough to avoid local disputes but small enough to reflect regional variations in crofting.

2.2.2.6 The coverage of Area Committees will extend beyond the existing Crofting Counties to those areas designated by Ministers under the Crofting Reform etc. Act 2007. The effect of such designation is to allow the creation of new crofts and the conversion of Small Landholders Act holdings to crofts. However, an anomaly has been discovered in the 2007 Act provisions which potentially blocks such smallholdings from conversion when they have been amalgamated. Accordingly, the Government will legislate to ensure that small landholders can convert their holdings to crofts in the new designated areas so long as all parts of the holding, whether amalgamated or not, come within the Small Landholders (Scotland) Acts 1886-1931. All Small Landholders Act holdings were treated as crofts prior to the establishment of the Crofters Commission in 1955. In the circumstances, consideration will also be given to the possibility of transferring to the Crofting Commission responsibility for exercising Ministerial powers under the Small Landholders (Scotland) Act 1911 within any new designated crofting areas.

2.2.2.7 The draft Bill requires Area Committees to produce policies on how they will carry out their delegated functions. These policies will be shaped through consultation with crofters, Local Authorities and other crofting interests in the area before ratification by the Crofting Commission. In order to ensure greater transparency, these policies will be made publicly available.

2.2.2.8 The network of assessors is widely valued and supported and the draft Bill proposes to build on this success. It proposes that assessors should sit on the Area Committees. It provides for three types of assessors. These are "elected assessors", "local authority assessors" and "appointed assessors". The Government response proposed 12 assessors; seven elected assessors, two local authority assessors and three appointed assessors although the draft Bill allows for the number of assessors to be varied. The elected assessors will be crofters elected by crofters and will ensure that policies and crofting regulatory decisions represent the views of crofters in any given area. The local authority assessors will help to ensure that crofting policies and regulatory decisions take account of Local Authority housing, planning and economic development policy and, likewise, ensure crofting issues are considered in Local Authority, housing, planning and economic development policy. Appointed assessors will ensure that each Area Committee includes appropriate representation of other crofting interests, such as landlords and community trusts. Appointed assessors will be appointed by the Crofting Commission once it has been formed. Any expenses and loss of earnings accrued by assessors whilst performing their duties would be met by the Commission.

2.2.3 Area Committee elections

2.2.3.1 The draft Bill contains powers for Local Authorities to hold elections to the Area Committees. It is proposed that elected assessors will be crofters elected by crofters through the Single Transferable vote ( STV) system that is currently used for Local Authority elections in Scotland. It is proposed that the geographical area relating to each Area Committee will form one multi-member constituency, from which seven assessors will be elected. Elections would be held every five years.

2.2.3.2 The details of the elections will be contained within subordinate legislation. It is proposed that a person can only be nominated, elected or hold office as an assessor provided they are over 18 years of age and they are registered as a tenant crofter or owner-occupier of a croft. A person must be at least 16 and registered as a tenant crofter or owner-occupier in order to vote during Area Committee elections. It is proposed that ballot papers would be posted to crofts registered on the Crofting Register. Information contained on the existing register and the proposed Crofting Register would be used to compile an electoral roll for these elections. It will be necessary to update the details of crofters contained in the existing register ahead of these elections. In order to ensure the voting system is equitable, where more than one person is registered as the tenant crofter or owner occupier of a croft, only one ballot paper will be issued in respect of that croft for the first named crofter to determine who they wish to vote for. Where persons are listed as the tenant crofter or owner-occupier of more than one croft, they should be precluded from voting in respect of more than one croft. The entire process will be overseen by the Returning Officer for the Local Authority in order to ensure transparency and fairness.

2.2.3.3 In the event that there are too few nominees to fill the seven positions for elected assessors, it is proposed that the Crofting Commission be able to appoint additional assessors. Should a vacancy arise for an elected assessor before the next round of elections, it is proposed that this vacancy should be filled by recounting ballot papers from the STV election and enabling the candidate with the next highest number of votes to fill the vacancy.

2.2.4 Constitution of the Crofting Commission

2.2.4.1 In order to reflect the creation of Area Committees, it is proposed that the constitution of the Commission be amended. Currently, the Board of the Crofters Commission consists of a maximum of nine members (Commissioners), appointed by Scottish Ministers. It is proposed that the Board of the Crofting Commission will consist of nine members. Six will be Area Committee Chairpersons and three will be Ministerial appointees, one of whom will be the Convener. The inclusion of Area Committee Chairpersons will ensure that crofters represent the majority of Board members.

2.2.4.2 A number of measures have been included in the draft Bill to ensure the transparency and accountability of the Board of the Crofting Commission. Any meetings and proceedings of the Commission would require a quorum of five members, the majority of whom should be the Chairpersons of the Area Committees. Members of the Commission would be required to disclose any potential conflicts of interest in relation to any matter at its meetings and must refrain from any part of deliberation or decision of the Commission in relation to that matter.

2.2.4.3 The draft Bill contains a requirement that at least one member of the Board of the Crofting Commission must speak the Gaelic language and, where a situation arises that none of the Area Committee Chairpersons meet this requirement, the Scottish Ministers must ensure that one of their appointees speaks the Gaelic language.

2.2.4.4 Ministerial appointments will continue to be regulated by the Office of the Commissioner for Public Appointments in Scotland ( OCPAS) in order to ensure openness and transparency in the public appointments process.

2.2.5 Review and appeal

2.2.5.1 At present, a person who wishes to appeal a decision of the Crofters Commission has a right to appeal to the Land Court. The ColoC recommended that consideration be given to a non-statutory appeal mechanism for resolving disputes. The Government agrees that it would be desirable for crofters and others to be able to have a review of regulatory decisions prior to the Land Court, which can often be a lengthy and expensive process. Therefore, it is proposed that an applicant, or any person with an interest in an application, should be able to request that the Crofting Commission review a decision taken by an Area Committee. The Crofting Commission would have the authority to overturn a decision by the Area Committee. This process would not interfere with the existing right of appeal to the Land Court.

2.2.6 Powers and duties of the Crofting Commission

2.2.6.1 In order to give the Crofting Commission greater flexibility and responsibility in taking forward its regulatory and enforcement role, the draft Bill provides the Commission with a number of enhanced powers. Included in the draft Bill is provision for the Scottish Ministers to provide grant-in-aid to the Commission which will enable it to have greater control over the use of its resources. At present, the Scottish Ministers determine how the resources provided to the Crofters Commission should be used. Consequently, the draft Bill contains a requirement for the Commission to present the Scottish Ministers and the Auditor General with its annual accounts each financial year. The Commission will be required to establish an Audit Committee and such other committees as it sees fit in order to carry out its statutory functions.

2.2.6.2 It is also proposed that the Crofting Commission should also be able to appoint employees on such terms and conditions as it may determine, subject to Ministerial Direction. However, there will be no change to the current powers of the Scottish Ministers to provide staff and resources to the Commission. This means that civil servants can continue to be provided to the Commission by the Scottish Ministers. Where the Scottish Ministers do provide the Commission with civil servants, the cost of staff supplied will be deducted from any grant-in-aid.

2.2.6.3 The draft Bill also gives the Crofting Commission the power to enter into contracts to procure goods and services, which will provide the Commission with greater flexibility in the way it chooses to carry out its functions. It also proposes that the Commission should be able to acquire and dispose of land, subject to acquiring the consent of the Scottish Ministers. The Scottish Ministers should be capable of transferring property rights and liabilities to the Commission and delegating any of their functions to the Commission. A provision has also been included to enable the Scottish Ministers to add or amend powers of the Commission by a Statutory Instrument requiring an affirmative resolution of the Scottish Parliament.

2.2.6.4 In order to cover some of its expenses, the draft Bill enables the Crofting Commission to fix and recover charges for services provided in the course of carrying out its functions. The table below show the cost associated with the processing of each regulatory decision. With a renewed focus on regulation, the Commission should become more effective and efficient at handling regulatory casework, but it is considered that the entire cost of regulation should not be borne by the taxpayer.

2.2.6.5 Overall, the changes to the powers of the Commission are intended to result in a body that has greater autonomy to undertake its duties and address the needs of crofters.

2.2.7 Annual "State of Crofting" Report

2.2.7.1 In response to the ColoC's recommendation that there should be an annual report on the "state of crofting", the draft Bill requires the Crofting Commission's annual report to provide a broad account of the state of crofting. It requires the Commission to consult with Local Authorities in the Crofting Counties and with HIE in the production of a more comprehensive annual report, which will include an assessment of the issues affecting crofting communities and the contribution of crofting to the sustainable development of Scotland.

2.2.8 Conclusion

2.2.8.1 The proposals contained in the draft Bill provide for a reformed Crofters Commission that is focused on more effective regulation of crofting. It achieves this by removing some of the functions connected with development activity, which is being transferred to HIE. It provides the Commission with greater powers relating to its corporate functions so that it can operate with greater autonomy.

2.2.8.2 The draft Bill also contains measures to ensure the Crofting Commission's accountability and transparency. The introduction of Area Committees is designed to ensure that policies and decisions on regulation and enforcement better reflect the wishes of crofting stakeholders in each region of the Crofting Counties. The constitution of both the Board of the Commission and the Area Committees is designed to be representative of a number of interested parties in crofting. It is considered that through devolving power to crofters, problems faced by crofting communities such as absenteeism and neglect of croft land will be addressed more effectively.

2.3 Regulatory and Equality Impact Assessment

2.3.1 Issue

2.3.1.1 A rural development and crofting survey conducted by the CoIoC found that 32% of crofters thought that the Crofters Commission was effective in its development role whilst 36% of crofters thought that it was ineffective in this role. 33% of crofters thought that the Crofters Commission was effective in its regulatory role whilst 41% of crofters thought that it was ineffective. The CoIoC collected evidence that the Crofters Commission was out of touch with crofters. Key recurring issues were the need for the Crofters Commission to be more democratically accountable; have greater area representation; enforce regulations more effectively; be better aligned with other relevant partners; and have closer communication with local people and grazings committees.

2.3.2 Objective

2.3.2.1 The objective of the draft Bill is to increase the effectiveness of the Crofters Commission and to ensure that it is more accountable to its customers.

2.3.3 Risk assessment

2.3.3.1 Potential risks associated with changes to the governance arrangements for crofting include:

• Confusion over the role and responsibilities of different agencies following changes to the governance arrangements
• A lack of interest by crofters to participate in any reforms designed to make the reformed Crofters Commission more accountable
• Neighbourhood disputes where regulatory decisions are taken at too local a level.

2.3.4 Options

2.3.4.1 In broad terms there are three options available:

(i) Do nothing;

(ii) Wind up the Crofters Commission and discharge the regulation and enforcement function in the future through a new Federation of Crofting Boards, as recommended by the ColoC; or

(iii) Reform the Crofters Commission by clarifying its responsibilities and reconstituting it to make it more democratic and accountable.

2.3.5 Benefits

2.3.5.1 Option 1 involves no change and would do nothing to increase the effectiveness of the Crofters Commission or the confidence of those it regulates.

2.3.5.2 Option 2 would increase the accountability of the regulator but would involve a greater degree of administrative upheaval associated with the winding up of an existing NDPB and its replacement by a more complicated system of governance.

2.3.5.3 Option 3 would retain the existing NDPB but would involve reforms to make it more effective and accountable.

2.3.5.4 The Government decided to proceed with Option 3 and its proposals are set out in section 2.2 of this document.

2.3.6 Impact on Stakeholders

Crofters

2.3.6.1 It is considered that crofters will benefit from the reforms to the Crofters Commission since policies and decisions made by Area Committees will better reflect the views of crofters in any given region. A focus on regulatory work should see an improvement in the effectiveness and efficiency with which regulatory cases are dealt with by Commission staff. The draft Bill contains powers to enable the Crofting Commission to charge a fee to recover the cost of processing a regulatory application.

Crofters Commission and other NDPBs

2.3.6.2 The proposals will require reform of the Crofters Commission to focus all of its resources on regulation, which will involve some changes to the organisation. The introduction of Area Committees will require elections and Crofting Commission staff will prepare regulatory cases for decisions by the Area Committees. It is expected that Area Committees will meet approximately once a month to consider regulatory applications. Powers have been included to enable routine decisions that have not been contested and which are consistent with area policy to be delegated to officers of the Crofting Commission. The Board of the Commission will review decisions taken by the Area Committee where a review has been requested, which it is hoped will reduce the volume of cases coming before the Land Court and avoid associated costs.

2.3.6.3 There will be not be any impact on the existing staff of the Crofters Commission, who will continue to work as civil servants on crofting issues. Some may transfer to another part of the civil service as part of the proposals to focus the reformed Commission on regulation. Others will stay and continue to carry out regulatory casework for the reformed Commission. The Government has given a commitment that there will be no compulsory redundancies or relocation and the draft Bill will not amend provisions allowing Scottish Ministers to provide civil servants to the reformed Crofters Commission. Those civil servants working at the Crofters Commission will continue to work under the same terms and conditions of service as they currently have.

2.3.6.4 The proposed reforms to the Crofters Commission includes the removal of community development related functions, which will now be taken forward by HIE. Provision has been made to help HIE integrate crofting community development into their new Growth at the Edge approach. Resources were transferred from the Crofters Commission to HIE on 1 April 2009 to help enable HIE to take forward this work. Responsibility for the new Crofting Register will transfer to the Registers of Scotland and this is considered further in Chapter 3.

Local Authorities

2.3.6.5 The proposal will require elections to Area Committees to be held once every five years and it is proposed that Local Authorities should conduct these elections. Local Authorities currently undertake a number of elections and will be able to make use of their knowledge and experience to conduct elections for this limited franchise.

Land Court

2.3.6.6 The proposals to reform the Crofters Commission should tend to reduce the volume of cases referred to the Land Court as decisions will better reflect the views of crofters in any given area, who will help to shape policies on certain issues. The provision of a review process to consider contested decisions may also help to reduce the number of cases referred to the Land Court.

Scottish Government

2.3.6.7 Part of the proposals to reform the Crofters Commission include removing the administration of grant schemes that it currently operates. The Scottish Government's Rural Payments and Inspections Directorate will administer the Crofting Counties Agricultural Grants Scheme in future and further consideration is being given to the administration of the Croft House Grants Scheme ( CHGS). This is not expected to have any impact on the staff responsible for administering these schemes or for the CHGS office in Tiree.

2.3.7 Costs

2.3.7.1 Currently, the Crofters Commission spends £148k per annum on the salaries and pensions of its eight Commissioners. The chosen option proposes that the Crofting Commission expands the number of its Commissioners to nine, increasing total Commissioner costs to £166k. The Crofters Commission reimburses assessors for any loss in earnings and travel expenses incurred through their role. Given that Area Committees will meet on average once a month, it is anticipated that the total spend on Area Committee assessors will increase to approximately £100k per annum.

2.3.7.2 The Government's proposals would also involve costs for Area Committee elections. It is proposed that Area Committee elections would take place once every five years and each election would incur a cost of £100k, with the exception of the first election, which would have an estimated additional one-off cost of £25k due to the additional costs associated with establishing the crofting electoral register. The Scottish Ministers propose to fund the additional Commissioner and Area Committees through savings in the administration of the Commission.

2.3.8 Small Firms Impact Test

2.3.8.1 It is not considered that the proposals relating to the reform of the Crofters Commission will have any impact on small firms.

2.3.9 Competition Assessment

2.3.9.1 It is not considered that the proposals relating to the reform of the Crofters Commission will create any comparative advantage or disadvantage within the sector.

2.3.10 Enforcement and Sanctions

2.3.10.1 These proposals are concerned with changes in the governance arrangements for crofting and do not create any new sanctions.

2.3.11 Equity and Fairness

2.3.11.1 The reform of the Crofters Commission and the introduction of Area Committees is designed to be fair and equitable. The proposal to establish Area Committees through democratic elections and to ensure the Board of the Crofting Commission contains a majority of crofters would enhance the transparency and representativeness of the Commission. However, it is also important to ensure that the Area Committees are large enough to reduce the risk of discrimination. The proposal to have a process for reviewing decisions of the Area Committee will also act as a safeguard against any potential acts of discrimination.

2.3.11.2 As is currently the case under the Crofting Acts, the reformed Crofters Commission will continue to discharge its functions in a manner which encourages equal opportunities and in particular, the observance of the equal opportunity requirements. As Area Committees will form part of the Crofting Commission, they will also be required to observe the equal opportunity requirements.

2.3.11.3 There are no barriers of race, sex, income, religion, sexual orientation or disability which would prevent a crofter from standing for election to Area Committees or voting during Area Committee elections. The only barrier to both is a minimum age requirement which reflects current election policy within Scotland.

« Previous | Contents | Next »