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Overview of community interest concerns
4.1 Mostly, community interests thought that the White Paper took too narrow an approach. There was a real concern that, in making the legislation as watertight as possible, many cases that the legislation should be there to help would be excluded. Mainly, community interests looked for:
Overview of landowning interest concerns
4.2 Many landowners would naturally prefer no legislation at all. Landowning interests were mostly concerned about:
Registration of community interest
Land eligible for registration
4.3 Many landowning interests argued that the provision should be limited to remote fragile areas. This was the original recommendation of the Land Reform Policy Group, but Ministers decided to widen the scope to all rural areas. This was strongly criticised by landowning interests.
| Outcome: The draft Bill defines registrable land as all of rural Scotland. Ministers believe that communities in remote fragile areas are by no means the only ones who would benefit from a right to buy. |
4.4 Some landowning interests argued that urban land should be included, on the grounds that this would remove the suspicion that community right to buy is a policy designed by townies to do down those who live in the countryside. Some community interests argued that urban communities should also be able to benefit.
| Outcome: The draft Bill provides that only rural land is registrable. Ministers believe that the lives of people who live and work in towns and cities are not constrained by landownership in the way that those in the country are. There is not therefore the same rationale for a community right to buy in the urban context. |
4.5 A number of respondents such as Highlands and Islands Enterprise pointed out that, by using the definitions of "rural" mentioned in the White Paper, relatively small settlements such as Golspie might be defined as urban and their communities would be denied the opportunities provided by the legislation. A more inclusive definition would be that used for the purposes of the Scottish Rural Challenge Fund, which employs postcode sectors, unitary authority boundaries and settlement boundaries, with reference to population densities. Another suggestion was to include all settlements below a population of 2,500, 5,000 or 10,000 people.
| Outcome: The draft Bill provides that rural Scotland ("registrable land") will be defined by reference to population. Ministers propose that the order to be made under this section will define registrable land by excluding urban settlements with a population of over 3,000. Ministers have therefore chosen a population threshold which has precedent in defining rural areas. The 'settlements' approach to defining rural areas is based upon work by the General Register Office for Scotland. (See paragraphs 6.14 and 6.15.) |
Exemptions
4.6 One landowning body with charitable status claimed that their land should be exempted from the legislation.
| Outcome: The draft Bill does not exempt any class of landowner. Ministers believe that all landowning bodies should be treated equally under the new legislation. |
4.7 Highland Council suggested that common good land should be exempt, on the grounds that it is already in common ownership.
| Outcome: The draft Bill does not exempt any class of land. Ministers believe that all landholdings should be treated equally under the new legislation. In practice it seems less likely that such land would be put up for sale but, in the event of a sale of 'sensitive' land, the protecting conditions would continue to operate. |
4.8 The East of Scotland Water Authority asked for exemption of land that is important for service supply purposes.
| Outcome: The draft Bill does not exempt any class of landowner or land. Ministers believe that all landowning bodies should be treated equally under the new legislation. In practice it seems less likely that such land would be put up for sale but, in the event of a sale of 'sensitive' land, the legislation protecting the supply would continue to operate. |
Sporting/salmon fishing/mineral rights
4.9 A number of written responses representing community interests asked for the community right to buy to be extended to sporting/salmon fishing/mineral rights, and the point was also raised at many of the local seminars.
| Outcome: The draft Bill allows communities who exercise the right to buy the land to buy the salmon/mineral rights also, as an accessory to the land either at the same time or after purchasing the land to which they relate. Communities who exercise the right to buy the land will acquire also the sporting rights (though such rights may be subject to leasehold interests). |
Minimum size
4.10 Some landowning interests asked that a minimum size of landholding be set, to exempt smaller landholdings from the legislation.
| Outcome: The draft Bill does not set a minimum size. Ministers believe that in many cases it is the smaller pieces of land that may most attract community interest (for small-scale economic activity, housing etc) and excluding them would detract significantly from the benefits of the right to buy. |
Registration stage
4.11 A number of individuals and bodies representing the community interest argued that there should be no requirement for a registration stage.
| Outcome: The draft Bill provides for an initial registration stage as the norm. Ministers believe that this is important as it allows the other provisions of the legislation to be focused only on land where a community interest has been registered. Its omission would require all rural land to be subject to the legislation, with a consequent massive increase in administration and compliance costs and potential compensation costs. |
Defining community body and local community
4.12 Many community interests felt that focusing membership of a community body on those who live and/or work on the land in question was too restrictive. The point was made e.g. by Highlands and Islands Enterprise that nearby owner-occupiers would be excluded by the definition in the White Paper, and such people are likely to have a legitimate interest in the community and to be key members of the community body. This has certainly been the case in previous community buy-outs.
| Outcome: The draft Bill provides a far more inclusive approach: a community body will require to demonstrate to Ministers that it is sufficiently representative of and supported by the local community. The Bill also provides that the local community for these purposes will normally be defined as comprising all who are on the electoral roll for the polling district or polling districts in which the land is situated, with scope for Ministerial discretion. This is consistently the smallest unit for which data are publicly available. |
Nearby land
4.13 The issue of being allowed to register interest in nearby land was raised by a number of community interests. The issue about neighbouring forest land was a recurring one. Equally, many landowning interests expressed concern about any such extension. Ministers had stressed that they were in principle in favour of this, if the technical definitional problems (essentially, where do we draw the line?) could be resolved.
| Outcome: The draft Bill gives Ministers discretion to approve the registration of community interest in any nearby land in which a community body is able to demonstrate a direct community interest. |
Communities of interest
4.14 Some respondents, mainly environmental Non-Governmental Organisations,asked for "communities of interest" to be allowed to use the legislation. They hoped that the White Paper proposals could be a possible vehicle for achieving purchase by Scottish Natural Heritage/Non-Governmental Organisations. They pointed to sites where there is no resident community and no community interested in acquisition, but environmental management is required to regenerate the land.
| Outcome: The draft Bill does not allow for this. Ministers believe that other measures are available for such cases; this legislation is to create a community right to buy. |
Proxy registration
4.15 Respondents such as Highland Council and Highlands and Islands Enterprise suggested that the process would be simplified by incorporating a "general presumption of community interest", which allowed for councils, local enterprise companies or community councils to register an interest in land on behalf of the 'community'. The underlying argument goes that local communities will be unsure of their own minds at that stage, and the 'proxy' applicant will be putting up a marker against land that might be suitable for community development purposes should it come up for sale.
4.16 Other support for proxy registrations came from bodies with an interest in rural housing (e.g. Shelter), who considered that registered housing associations, co-operatives and other housing bodies should be able to register an interest in land needed for housing on behalf of the community/social interest.
| Outcome: The draft Bill does not allow for proxy registration, because Ministers believe that this departs from the ethos of a community right to buy. But where a community shares the aspiration of acquiring land for local housing, it may embrace the housing association as a partner body. |
Eligibility criteria for community bodies
4.17 Respondents such as Highlands and Islands Enterprise, the Scottish Crofters Union and Abriachan Forest Trust voiced concern that to expect community bodies to form themselves as trusts/companies limited by guarantee at the stage of registering an interest is unduly cumbersome for that stage of the process. They cite the expense and ensuing legal/accounting requirements from that point to the stage where land comes onto the market.
| Outcome: The draft Bill continues to require incorporation. Ministers believe that it is vital that bodies seeking to register land must have serious intent, even at that early stage. But there will be help for community bodies, to make the process as easy as possible. |
4.18 Some respondents (e.g. Highlands and Islands Enterprise and the John Muir Trust) argued for dropping the White Paper's proposal that community members should constitute a voting majority within a registered community body. They gave examples of existing landowning partnerships involving community bodies where much needed capital has been contributed e.g. by conservation bodies, but no single partner interest has majority control.
| Outcome: The draft Bill continues to require this, because Ministers believe that to do otherwise would depart from the ethos of a community right to buy. |
4.19 There was considerable support, mainly but not exclusively from landowning interests, for the proposition that there should be a minimum size for a community body. It was pointed out that the smaller the community body, the more it is likely to represent private rather than community interests. Without a minimum size, a single family could constitute themselves into a community body, for example.
| Outcome: The draft Bill provides that the community body should normally have at least 30 members (i.e. at least 16 community members) but Ministers will have a degree of discretion on this. |
4.20 Some respondents representing both landowning and community interests suggested that there should be a 3/5/10 year residency test for community members. This was based on fears that the legislation will be used by incomers who want to change everything against the wishes of long-standing residents.
| Outcome: The draft Bill does not provide for this. Ministers believe that such discrimination would be unfair. |
4.21 Some landowning interests argued that more than 10% (say, 25-50%) should have to support registering an interest. Some community interests also favour a higher figure at this stage.
| Outcome: The draft Bill provides that 10% of the local community (using the wider definition at 4.12 above) must support registration, with scope for Ministerial discretion. This will allow Ministers to be satisfied that the bid to register a community interest has sufficient support from the local community. |
Consultation on bids for registration
4.22 Several landowning interests and agents (e.g. Strutt and Parker) considered it important that the landowner should be informed (by Ministers) and his/her views sought when an application is made to register an interest in his/her land (rather than post-registration, at appeal stage).
| Outcome: The draft Bill includes this. Ministers believe that there are potential advantages in this for the landowner and for the community body as it may lead to dialogue - and sometimes a sale - without the need for recourse to the process in the legislation. It should also reduce the likelihood of subsequent appeal. |
4.23 The Scottish Landowners' Federation was among a number of landowning interests that considered that the right to appeal against registration should extend to other members of the community with an interest.
| Outcome: The draft Bill provides for this. Ministers believe that this is only fair. |
Appeals
4.24 A number of landowning interests (particularly at the seminars) expressed concern about the cost of appeal.
| Outcome: The draft Bill provides for summary application to the sheriff. This will (comparatively speaking) be cheap, accessible and local, and preferable to a petition for judicial review or formal appeal to the Court of Session. |
Compensation
4.25 Landowning interests insistently expressed fears that registration of a community interest will cause an immediate collapse in the value of the land. They therefore argued for compensation for this as part of the Bill.
| Outcome: The draft Bill does not provide for compensation for this. Ministers have concluded that in itself registration changes nothing, since registration has no effect until the landowner chooses to place the land on the market; and even then it should not reduce the land value since the community buyout will be at market price. |
Effect of registration
4.26 A few landowning interests raised concerns that the registration of a community interest in a piece of land would give the community body rights over that land (e.g. to be a statutory consultee on relevant planning applications) before the landowner decides to put the land on the market.
| Outcome: The draft Bill does not provide for the community body to acquire any such rights through registration. |
4.27 Also, a few landowning interests argued that registration should automatically be cancelled if planning consent for development is secured by the landowner. The concern here is that disposal of the land before/after development will be affected by the right to buy.
| Outcome: The draft Bill does not provide for this. The valuer appointed by Ministers will take appropriate account of material aspects in setting a price. |
4.28 Certain landowning interests sought a moratorium of (say) 2 years between registration of interest and operation of the right to buy. Some cited this as an opportunity for the community body to consolidate in terms of viability and continuing commitment.
| Outcome: The draft Bill does not provide for this. Ministers believe that such a hold on the body's ability to proceed with a right to buy would also give the landowners an opportunity to sell without the new right having effect. |
Multiple registrations of interest
4.29 It is clearly possible for more than one community body to want to register an interest in the same land. A more likely scenario is for bids to be overlapping at the boundary. A number of community interests wanted to allow for this.
| Outcome: The draft Bill allows for more than one community body to have a registered interest in any piece of land; and then for Ministerial discretion to approve which community body should be given the right to buy. |
Time to assess community interest
Late registration
4.30 Many representing the community interest argued that communities should be able exceptionally to register an interest after land comes on the market. Many pointed to cases (e.g. Great Cumbrae) where the idea of community purchase only arises when the opportunity unexpectedly presents itself.
| Outcome: The draft Bill allows community bodies to apply on an exceptional basis to Ministers to register an interest after land has come on the market (provided that the closing date for offers has not been reached, or missives have not been concluded, before the application is received). On receipt of an application, Ministers may impose a period of 30 days delay on the proposed sale. Within that period, the community body would have to meet the eligibility criteria. |
Minimum period
4.31 Highlands and Islands Enterprise thought that 30 days for the minimum period between notice to sell and closing date was too short, and proposed that it should be extended up to 90 days. However, tasks that they suggest the community body will need to undertake in that period (e.g. considering the price set and producing business plans) are not in fact essential at that stage. Most community bodies however supported the 30-day period.
4.32 On the other hand, a few landowners said that such a delay is unacceptable and would cost them sales. (They proposed 15 days instead.) However land agents did not object to this period of delay, and thought that it is workable.
4.33 Bell Ingram (Rural) suggested that it would be more effective to prevent interference with the land market by requiring the landowner to give the community body a minimum of 30 days notice of an impending sale of registered property before it is publicly advertised. That way, the body can opt to continue its interest and the sale process can take effect as a matter between the owner and the body. It is argued that this would prevent 'blight' and reduce compensation claims at this stage. A landowner who ignored his/her obligation to give a community body notice prior to going to the market would remain obligated, and any blight would be his/her own responsibility.
| Outcome: The draft Bill provides that the 30-day period may occur prior to the property going on the market. |
Community right to buy
Eligible transfers
4.34 A few landowning interests argued that it would be inappropriate or too difficult to include transfers for value other than sales.
| Outcome: The draft Bill includes transfers for value as defined. Ministers believe that excluding all transfers for value, while making the legislation a lot simpler, cannot be an option: it would mean that landowners would just switch from market sales to private sales and other mechanisms and thus evade the legislation. |
4.35 Many of the landowning interest responses raised difficult (and entirely legitimate) questions about how eligible transfers will be defined. The knottiest issues were around inter-family and inter-company transfers of various kinds.
| Outcome: The draft Bill provides a definition of what is included and what is excluded. |
4.36 A few consultees representing community interests wanted to give communities a right to buy every time land is transferred by inheritance. They pointed out that this is the only way to free up land that never comes on the market.
| Outcome: The draft Bill does not provide for this. The European Convention on Human Rights/compensation cost implications of this are too great. |
"Cherry-picking"
4.37 This was one of the main points raised by landowning interests. What happens if the area(s) offered for sale do not conform exactly to the area in which community interest has been registered? Many landowners expressed great concern that a community body would cherry-pick a small bit of the estate, leaving the remainder much less valuable. They pointed out that the compensation cost implications of this would be considerable.
| Outcome: While the draft Bill provides for communities to buy the land as lotted rather than as registered, there clearly is scope for a mutually agreeable solution to be negotiated between the parties. Ministers have concluded that the European Convention on Human Rights/compensation cost implications of providing otherwise in the legislation are too great. |
Maximum settlement period
4.38 Some responses representing community interests argued for a longer period, citing that previous community buy-outs have taken longer than 6 months. However, most community-oriented responses were content.
4.39 Equally, some responses representing landowning interests and the National Farmers' Union of Scotland argued for a shorter period (say 3 months) than 6 months. But most landowning interests seemed content with 6 months, provided that compensation was available. However concerns were expressed consistently that the period would in effect be much longer than 6 months.
4.40 A number of land agents suggested that (a) the various processes to set the price and (b) the community's fund-raising efforts should go ahead simultaneously rather than sequentially. Deadlines would have to be set for each stage. Further, the right to buy processes of balloting, approving and seeking funding could proceed on the basis of the initial assessed price, with later modification if there was a successful appeal by either side. The advantages of this approach are that everything is greatly speeded up (with benefits to all concerned).
| Outcome: The draft Bill provides for a 6-month period to run from the date of the community body's confirmation that it will exercise its right to buy the land, with the various processes going ahead simultaneously. Deadlines will be set for each stage. Ministers recognise that 6 months is necessary for the Scottish Land Fund's decision-making process, and, since it is likely that many community purchases will look for Land Fund support, anything less than 6 months would mean that communities would have grave difficulty in securing the funds required. But equally Ministers believe that the new preparatory stage and other support mechanisms will make a 6-month period for raising the cash workable. |
Decision not to buy
4.41 A few landowning interests suggested that, once a community body has opted not to exercise its right to buy, it could be prohibited from ever re-registering an interest.
| Outcome: The draft Bill provides that a registered interest should automatically fall in the event of the land coming on the market and the community body opting not to buy; but that the community body can apply to re-register its interest. |
Price
4.42 A number of community interests (and Highland Council) were opposed to paying the open market price of land in Scotland, which tends to reflect the amenity/status value of the land rather than the real rate of return that the land could conceivably earn. They suggested that the latter is the "real" value, and that the valuation should reflect this and this alone.
| Outcome: The draft Bill provides for open market value. The European Convention on Human Rights/compensation cost implications of doing otherwise are too great. |
4.43 Many landowning interests argued that the community purchaser should have to match the highest bid on the open market, on the basis that this provides a real rather than notional market price.
| Outcome: The draft Bill provides that the price is as assessed by the valuer appointed by Ministers. Ministers believe that a system of matching the highest bid is unfair to that bidder, and that there would be scope (indeed incentive) for price manipulation by means of collusion between seller and prospective purchaser. |
4.44 The Scottish Landowners' Federation made reference to precedent in the compulsory purchase legislation, suggesting that the price should be negotiated, and assessed only if there is disagreement. They also proposed reference to the "open market value" basis of assessment (used by the Royal Institution of Chartered Surveyors in Scotland).
4.45 A number of responses pointed out the scope for disagreement over the conditions of sale as well as the price. Given the interaction between price and conditions (e.g. moveables), they suggest that the valuer Ministers appoint should take account of both.
| Outcome: The draft Bill provides for the appointed valuer to invite the landowner and the community body to make written representations before completing his/her valuation. This would give the landowner an opportunity to set down those aspects which will require to be covered in the valuation and as conditions of sale, and would give both parties a chance to indicate their expectations as to price. However Ministers consider it important that the valuer should make an independent assessment rather than negotiate a price, and should follow the basis of valuation set down in the Bill. |
Eligibility criteria for community bodies
4.46 Landowning interests tended to feel most strongly that more than 50% of the members of the community should have to support exercising the right to buy (suggesting anything between 2/3rds and 80%); but the concept that there should be a community majority in favour of the community purchase was more widely shared. On the other hand, Highland Council argued that it should only be 50% of those voting, with no requirement for wider community support.
| Outcome: The draft Bill provides that at least 50% of the local community (as defined at 4.12 above) must vote, and a majority of those voting must approve the purchase. There will be scope again for Ministerial discretion. Ministers believe that this strikes the right balance, given the scale of the local community. |
4.47 A number of respondents suggested that the community body should be required to meet some sort of quality test. Two different sorts of quality test were proposed by a significant number of respondents (both landowning and community interests): an (economic) viability test and an (environmental) sustainability test. In effect, Ministers would need to see and approve the community body's plans for using the land before giving them the right to buy it.
| Outcome: The draft Bill provides that, before approving the right to buy, Ministers must be satisfied that the community body's plans for the land are compatible with its sustainable development. |
4.48 A few representing landowning interests argued that community bodies should have to come up with at least 25% of the funding themselves. They saw this as providing evidence that community bodies are organised and can demonstrate tangible commitment to support their enthusiasm for ownership.
| Outcome: The draft Bill does not provide for this. Ministers believe that this would be an unrealistic hurdle. |
4.49 A number of landowning interests pointed out the need for conditions to prevent community bodies that had exercised the right to buy from being able to sell off the land so acquired.
| Outcome: The draft Bill provides for controls on the community body's freedom to re-sell or dispose of the land so acquired; it also provides controls relating to surplus company funds and assets, and arrangements for disposal in the event of the winding up of a community body. |
4.50 There was a suggestion by a few landowning interests that the selling landowner should for 10 years after the sale share in any planning gain. This is a reflection of the terms of the individual crofting right to buy legislation, where the land changes hands at a capped value of 15 times the annual rental.
| Outcome: The draft Bill does not provide for this. The community right to buy price will be an open market valuation and will, as appropriate, reflect any planning applications pending. There is therefore no justification for subsequent sharing out of betterment, any more than in the case of an ordinary sale. |
New compulsory purchase power in the public interest
Time limit
4.51 A few consultees representing community interests have suggested a period longer than 10 years, but no particular arguments have been put forward to justify this.
4.52 Rather more landowning interests have suggested a shorter period, though again without specific reasons.
| Outcome: The draft Bill provides for a 10-year period. |
Community interest
4.53 The White Paper says simply that Ministers will establish whether there is interest in the property from relevant community bodies. Some landowning interests suggested that a formal ballot was required before the exercise of compulsory acquisition powers.
| Outcome: The draft Bill provides for a ballot on the same basis as for exercise of the community right to buy. |
Other proposals
4.54 It is not surprising that many landowning interests did not want to see community right to buy legislation enacted at all. They drew attention to numerous technical details to be resolved, and argued that this legislation should be given more time.
| Outcome: In preparing this draft Bill for consultation, time has been devoted to further development of technical details. Ministers now intend there should be no delay in having the Bill made ready for introduction to the Scottish Parliament in the Autumn. |
4.55 A number of commentators have suggested that a community purchase should be explicitly in the public interest, in order to meet European Convention on Human Rights obligations.
| Outcome: The draft Bill provides an explicit requirement for Ministers to satisfy themselves in each case and at each stage that it is in the public interest for the community right to buy to proceed. |
4.56 A small minority wanted the community right to buy to be available at any time.
| Outcome: The draft Bill does not provide for this. The European Convention on Human Rights/compensation cost implications of this are too great. |
4.57 A number of environmental bodies and like-minded individuals suggested that a new power of compulsory purchase was necessary to deal with bad landowners.
| Outcome: The draft Bill does not provide for this. The existing compulsory purchase powers of various bodies (e.g. local authorities, Scottish Enterprise, Highlands and Islands Enterprise, Scottish Natural Heritage) may well suffice, and in September 1999 Ministers reminded such bodies that these powers are there to be used in appropriate circumstances. |
4.58 A few consultees representing community interests suggested that all public land put up for sale should first be offered to communities.
| Outcome: The draft Bill does not provide for this. However, the community right to buy applies equally to all landowners in rural Scotland, including the public sector. There is also a long-standing requirement on all public bodies to dispose of property (including land) as soon as it is not needed. The general rule is that this should be to the highest bidder, so as to maximise the benefit to the taxpayer. However there are some schemes whereby communities get first option to buy. The Forestry Commission for example already has an initiative to offer surplus land for sale to local community groups in this way. Ministers intend to see if this approach could be augmented/extended to other public bodies. |
4.59 A few landowning interests felt that the State should regulate community landownership (and seize back any land being inadequately managed by communities).
| Outcome: The draft Bill does not provide for this. Ministers believe that this would be undesirably interventionist, over-bureaucratic and costly to administer. |
4.60 A number of tenant farmers advocated that they should be given a right to buy.
| Outcome: The draft Bill does not provide for this, nor will the forthcoming Agricultural Holdings legislation. The provisions of the Agricultural Holdings legislation will however focus on other legislative means of freeing up present constraints on tenant farmers. |
4.61 A few landowning interests suggested that it would be better to encourage voluntary sales of land to communities, and that this might be made more attractive if such sales received some sort of tax break.
| Outcome: The draft Bill does not provide for this. Any such incentive could not be part of the land reform legislation as such tax matters are reserved to Westminster. But Ministers will consider putting the suggestion to the Chancellor as a Budget idea in due course. |
4.62 A few respondents argued that land value taxation is the single land reform action needed.
| Outcome: The draft Bill does not provide for this. The Land Reform Action Plan however includes a commitment to consider a comprehensive economic evaluation of the possible impact of moving to a land value taxation basis. To take matters forward in advance of that study would clearly be premature. |
4.63 A number of those representing landowning interests took the opportunity to argue against the re-introduction of sporting rates.
| Outcome: This is outwith the scope of the draft Bill. The Land Reform Action Plan however includes a commitment to consider an evaluation of the possible impact of abolishing national non-domestic rate relief on sporting rights and reducing or abolishing national non-domestic rate relief on agriculture and forestry. To take matters forward in advance of that study would clearly be premature. |
Summary of the resulting changes to the draft provisions:
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