Building Community Wealth in Scotland: consultation analysis

5. Land and Property Pillar

The land and property pillar seeks to grow the social, ecological, financial and economic value that local communities gain from land and property assets. This pillar focuses on maximising the use of land and property including through:

• productive and sustainable use of land and assets to support communities and enterprise;
• promoting and enabling diversified ownership and management of land and buildings;
• supporting community capacity building to grow community ownership;
• tackling vacant and derelict land and buildings to support regeneration including within town centres, increase community wellbeing, create employment opportunities, tackle climate change and protect our natural capital.

The consultation paper explains that, as part of early engagement on CWB legislation, stakeholders have suggested a focus on the following areas:

• review compulsory purchase powers and the case for introducing alternative land assembly mechanisms such as compulsory sales orders;
• explore the scope of existing mechanisms for securing development contributions, such as Section 75 planning obligations;
• explore new mechanisms for enabling land value uplifts to be reinvested in economic, social and community facilities.

Question 5: Are there ways in which the law could be changed which are not already covered in the proposals for the Land Reform Bill to advance the land and property pillar of Community Wealth Building?

Responses to Question 5 by respondent type are set out in Table 8 below.

A majority of respondents, 70% of those answering the question, thought that there are ways in which the law could be changed which are not already covered in the proposals for the Land Reform Bill to advance the land and property pillar of CWB. This rose to 77% of organisations.

Please provide a reason for your answer. In your response you may wish to consider the stakeholder suggestions outlined above which have arisen from early engagement.

Around 135 respondents provided a comment at Question 5.

Views on the land and property pillar

Some respondents who did not see ways in which the law could be changed further to advance the land and property pillar, noted support for the proposals set out in the consultation paper while others expressed a view that Land Reform and Community Empowerment legislation provides the necessary legal framework. There were also concerns around the financial sustainability of some CWB projects and it was argued that benefits delivered for local residents are more important than community ownership per se.

However, the majority of respondents who commented at Question 5 did think that there are ways in which the law could be changed to advance the land and property pillar.

Views on stakeholder suggestions from early engagement

Reviewing compulsory purchase powers and the case for introducing alternative land assembly mechanisms such as compulsory sales orders

Proposals to review compulsory purchase powers were welcomed, with suggestions that the present Compulsory Purchase Order (CPO) process needs to be streamlined or modernised, including to reduce uncertainty, and amend wording that currently limits intervention or proposals to bring forward CPOs. Among benefits that it was anticipated could arise from such reform were: bringing more vacant and derelict land into use; supporting town centre regeneration; reducing costs to the public sector; enabling greater land value capture for public benefit; and supporting implementation of the NPF4 'infrastructure first' policy. It was proposed both that communities should be given the right to initiate a CPO procedure, and that local authorities should receive funding to operate the CPO process.

Introduction of Compulsory Sales Orders (CSOs) was also supported, with views that this could prove more efficient than using CPOs for dealing with vacant and derelict land (VDL) or unused buildings, and that giving local authorities power to sell property that has been vacant or derelict for a defined period could incentivise owners to 'use or lose' their assets. It was argued that CSOs could offer an efficient, low-cost way to bring more land into community ownership, thereby supporting a range of CWB projects, and that it might be an easier route for communities than negotiating the current Right to Buy process. It was suggested that appropriate community groups should both be able to ask the local authority to initiate a CSO and be given notice of a CSO being taken forward.

An alternative view was that it is unclear what CSOs could deliver that CPOs do not, and that proposals for CSOs are unlikely to be legally admissible or deliverable in practice. It was also suggested that administration of CSOs could place a significant resource burden on local authorities, that community groups might not be successful bidders at auction, and that a future CPO could still be required to bring an asset under the ownership of either a council or community body.

It was also argued that use of any CPO/land assembly powers should require a clear evidence base, and that analysis of the land that would potentially be impacted should be undertaken before the proposal is developed further.

Exploring the scope of existing mechanisms for securing development contributions, such as Section 75 planning obligations

The proposal to explore the scope of developer contributions was welcomed, with the complexity of existing developer contribution process and related delays in infrastructure delivery cited as reasons the process should be simplified. It was also suggested that, in the absence of private sector capital being available at the outset of a project, local authorities need access to public sector investment and capital borrowing that can subsequently be recouped through legal agreements.

With respect to the level of contributions, it was noted that the capacity for local authorities to seek and for developers to pay Section 75 contributions is largely determined by the viability of a development, taking account of land values, development costs, and the strength of the local market. It was also argued both that Section 75 contributions tend to be relatively small compared with the total land value uplift and, specifically, that the Community Benefit of £5,000 per MW for renewable energy projects is outdated in the face of inflation.^[5] There was a broader view that existing mechanisms for securing development contributions cannot support the wider aspirations of CWB and that new mechanisms are required.

Specific suggestions included that there should be:

• Greater transparency around developer contributions, including uploading agreements to the relevant planning portal.
• Greater involvement for communities in decisions on how funds are used, and making funds available for community projects rather than solely for local authority use.
• A requirement to assign contributions to specific projects in the community where development is taking place, rather than being used in other areas.
• Flexibility with respect to developer contributions in respect of community-led affordable homes which, it was suggested, should either be seen as a contribution in their own right, or should be subject to a flat rate rather than being agreed by negotiation.
• A requirement for developers to demonstrate how a project contributes to a wellbeing economy and CWB objectives, for example by supporting local supply chains and creating local job opportunities.

The need to ensure that any changes are based on a collaborative approach and are fair to all parties was also highlighted.

Exploring new mechanisms for enabling land value uplifts to be reinvested in economic, social and community facilities

Proposals to explore new ways to capture land value uplifts were welcomed, with Scottish Land Commission work on Land Value Capture and Public Interest Led Development highlighted as considering practical ways to capture and share land value uplifts for the public good. Points made by respondents included that:

• Land value uplifts arising from public investment in infrastructure and remediation should be captured for public benefit.
• Active planning approval for a site should not be allowed to inflate the value of vacant land and that compulsory purchase rules could be amended to avoid compensating landowners on the basis of what land would be worth if it ever got residential planning permission rather than its value at the time.
• Where purchase of a long-term vacant site is required to support delivery of CWB, a realistic market value should take account of both costs of development and any liabilities associated with the site.
• Public authorities should be able to acquire land at near use value to ensure uplift in the value of land can be captured to support CWB initiatives.
• Under exceptional circumstances, communities using Right to Buy powers should be able to acquire land at below market value.

While there was a view that only a small amount of land value uplift is presently captured through Section 75 contributions, it was also argued that the current model does enable the public sector to capture some of the uplift accruing through planning processes, and that the cost of these contributions is taken into account in the amount a developer agrees to pay the landowner. In this context, concerns were raised that unrealistic additional requirements could have the potential to block delivery of new homes and that land value should be captured by developer contributions or land value capture, but not both.

Inflated land prices resulting from natural capital investment were also highlighted, and, while the Scottish Land Commission's best practice guidance for natural capital projects was welcomed, it was also suggested that legal changes may be needed to ensure that communities share in the financial benefits associated with land use change. One proposal was that community benefit should be embedded in the carbon credit system.

Other suggested changes

In addition to comments on the actions suggested by stakeholders at the early engagement stage, respondents identified a range of issues where action might be taken to advance the land and property pillar.

Ensuring alignment between CWB and other land rights legislation

Some respondents called for clear alignment of CWB legislation with the Community Empowerment Act 2015 and/or the Land Reform Bill, or specifically for care that clauses in the CWB Bill do not undermine clauses in the Community Empowerment Act. As an example, it was noted that the Act gives communities the right to request the transfer of any public asset on the basis of management, lease or ownership, and it was argued that the right to seek transfer of public assets into community ownership should take precedence over any other access rights that may be introduced in CWB legislation.

Other points raised with respect to the Community Empowerment Act in the context of CWB included that:

• Greater emphasis on alternative use of assets referenced by the Act could provide greater flexibility for communities.
• Greater commitment to delivering part 9 of the Act is required to provide food growing opportunities – for example through allotments.

There were also calls to review or strengthen Community Right to Buy powers, including a view that more action is needed to address a perceived imbalance between the powers of communities and landowners. Other suggestions included: improving awareness of Community Right to Buy and providing clear guidance; removing the requirement to identify an owner from the registration process; allowing a wider range of community bodies to use the provisions; and extending the statutory time-period for exercising provisions to a minimum of 12 months.

With respect to Community Asset Transfer there were suggestions that the process should be:

• Faster or less onerous. A presumption against restrictive covenants, burdens or clawbacks was suggested.
• Less costly.
• Transparent and supported at a local level.
• Open to all third sector organisations and not just to charities.
• Consistent in approach across public sector bodies to help minimise confusion for those looking to take on assets.

Other actions suggested to strengthen asset transfer included introducing greater accountability (and sanctions) for public authorities who fail to meet their obligations, and limiting the removal of public assets (for example by transferring them to arms-length bodies) from the scope of the legislation. It was also proposed that mechanisms should be developed to broaden asset transfer criteria to support landownership (or lease) by organisations with a wider range of membership structures, where such acquisitions can be demonstrated to be in the public interest. There was also a view that community asset transfer will become progressively more challenging, and that alternative approaches might need to be explored.

The need for local authorities to have adequate resources to process applications was also highlighted.

A number of respondents suggested changes to the draft Land Reform Bill including a proposal to require that community bodies receive prior notice of a landowner's intention to sell, with a period to raise funds then allowed if a community body expresses interest in acquiring the land. It was also argued that some provisions in the draft Land Reform Bill should go further than presently envisaged, for example: by giving communities longer periods to notify their interest or raise funds; by applying provisions in urban areas; by further strengthening the LRRS or placing compliance with the statement and associated guidance on a statutory basis; by extending the requirement to produce management plans beyond large landowners; by introducing a public interest test for transfer of large-scale holdings; or by restricting eligibility for grant funding to land recorded in the Land Register or to owners who are resident in the UK for tax purposes.

Specifically with respect to land reform in urban areas, it was noted that, when the Scottish Government excluded urban areas from provisions in the Land Reform Bill, it committed to including land reform issues of urban relevance within CWB legislation. However, it was argued that the consultation paper does not address urban land reform in a meaningful way.

Other suggestions included:

• Strengthening obligations around community engagement, including a requirement on significant landowners to engage meaningfully with local communities, to produce appropriate community plans as part of their management proposals and to ensure benefit of the community is a key consideration. It was also argued that broad community engagement on the use of land and property are central to building sustainable local economies and supporting a clear stewardship of community assets.
• Introducing new provisions to encourage community-led initiatives to acquire or manage woodland and forestry, for example a requirement for owners of forests and woodlands over 100 hectares to work with local communities, or a legal duty on absentee forest landowners to make a proportion of each forest holding available for community development.
• Creating a presumption in favour of the rights of those accessing land in order to take exercise over the rights of landowners.

Some respondents commented on the impact of land values on the ability of community organisations to acquire assets. Suggestions included that:

• Public sector organisations should not necessarily be required to obtain best financial value when assets are disposed of. The concept of 'best value' could be redefined to incorporate CWB values and ensure the best outcomes for communities, and disposal of assets to the private sector should be tested against CWB principles.
• Subject to consideration of the legal implications, there should be circumstances where communities are able to purchase land at below market value, for example if the existing use does not contribute to sustainable development.
• Community groups coming to the end of Community Asset Transfer long leases should be given the opportunity to take over the asset at no or nominal value or that council owned property could be notionally gifted to groups until they no longer require it.

Defining communities and community organisations

Some respondents addressed issues relating to the definition of communities, particularly in the context of Community Right to Buy or Community Asset Transfer. There were concerns around how an appropriate community can be defined – for example in urban areas where the physical boundaries of a community may not be clear, or where a community of interest covers a large geographical area. It was suggested that, if the areas and populations involved are too large, it may be impossible for a community organisation to conduct a ballot at the scale or response rate required. There were also concerns that:

• Decisions in relation to what is an appropriate community may be left to individual officers within public bodies, such that a change in personnel can result in a change of view, presenting difficulties for relevant community organisations.
• Use of the electoral roll to determine who should be entitled to a vote can disenfranchise both refugees and other residents who are not on the electoral roll. This is likely to be a particular issue in disadvantaged communities.

With respect to defining community organisations, there was a suggestion that this should be broadened to allow third sector organisations to operate facilities for the benefit of a local community.

It was also suggested that a way must be found to develop and fund facilities in areas where no appropriate community organisations are in place and/or there are no vacant assets that could be subject to asset transfer.

Building capacity within communities

As at other questions, the need for capacity building within communities was a frequently raised issue, and there were calls for communities looking to take on land or buildings to be provided with sufficient support and resources. Among specific aspects noted were the pressures on volunteers taking over assets previously managed by paid staff and the pressures on volunteer trustees in particular. It was suggested that community organisations should follow the principles set out in the Volunteer Charter^[6].

Suggestions with respect to appropriate support included:

• Training to develop appropriate skills and knowledge and a mechanism to share experience and good practice.
• Improving Community Councils' understanding of CWB principles.
• Help to identify owners of properties or land, and the mechanisms/funding available to bring these into community ownership. Free legal support for communities purchasing land and early-stage support from local authorities.
• A post-acquisition service for all community asset owners, including audits, mentoring, peer support and training.
• Access to necessary skills in dealing with deteriorating buildings and potential contamination.
• Help to overcome particular challenges facing some communities – for example in areas with high levels of poverty or remote rural areas. Support to enable a diverse range of people and communities to be involved.
• Funding to be made available, not only to buy land but also to provide ongoing support to avoid assets becoming liabilities.

The need for longer term funding was also highlighted, with the short-term nature of current funding models seen as impacting ability to access funding, retain staff and resources, and spend funding allocations within limited timescales.

Tackling Vacant and Derelict Land

Respondents suggested that further action is necessary if vacant and derelict land is to contribute to CWB objectives and there were calls for enhanced powers and funding, and for simplified or longer-term funding streams for local authorities to bring VDL back into use. There were also calls for more capital grant funding for community organisations that own assets. Although the Regeneration Capital Grant Fund and Vacant and Derelict Land Investment Programme were both noted it was reported that the former is generally oversubscribed, and that both programmes require local authorities to be the lead applicants, creating a risk that projects can miss out on funding opportunities if authorities do not have sufficient staff to support communities in developing and submitting bids. Exploring ways to streamline the application process was suggested.

It was also suggested that, at present, good projects with longer term benefits may be overlooked in favour of the 'shovel ready' projects that fit better with short-term funding programmes. A requirement for funding to help community groups meet costs associated with making sites safe was also highlighted.

A small number of respondents commented specifically on problems associated with small sites, including that the VDL register requires sites to be at least 0.1 hectares. However, a pilot programme was also reported to have been successful in addressing smaller sites, often in built up areas/town centres, and it was suggested that the approach could be developed further. The value of CWB approaches to town centre regeneration were noted.

Derelict croft land was also seen as a potential barrier to CWB if it results in a lack of land for housing or other development. This was highlighted as an issue more likely to affect island communities.

Respondents also suggested a range of other actions that could help in tackling VDL including requiring owners to engage with communities and groups who wish to use VDL and specific action on absentee landlords. It was proposed that owners, particularly remote institutions, should be incentivised to invest in their property assets and evidence their commitment to proactive asset management: failure to do so should trigger an option for communities to take over vacant, underutilised property. However, there was also caution that additional burdens placed on landowners should not cause sites to become undevelopable or economically unviable.

Other suggestions in the context of VDL included: ensuring empty properties are maintained in a reasonable condition until ready for re-use; developing 'meanwhile' use of land or buildings earmarked for future development; giving communities the opportunity to lease land to create community activity space or community gardens; turning brownfield sites into greenspaces for growing local food in a social enterprise manner; and greening of spaces for environmental and biodiversity benefits.

There were also calls for action to prevent land banking, with some respondents citing examples of land banking acting as a barrier to regeneration.

Clarifying land ownership

Greater transparency in terms of who owns land in Scotland was suggested as an area requiring further action, with calls for easy access to clear online information. Problems associated with historic deeds were also highlighted.

A recent consultation on a proposed transfer scheme for ownerless property was noted^[7] and it was suggested that, if properly designed and implemented, this scheme, which aims to bring ownerless properties back into productive use, has potential to deliver significant benefits for communities.

Considering different ownership models

A small number of respondents commented on the scope for different models to deliver CWB benefits with one argument that, as well as community ownership, there should be a focus on diversified tenure and collective/co-operative rights of use. It was argued that as a form of land use bringing significant community benefits, crofting should be explicitly supported in CWB legislation. Other suggestions included consideration of opportunities for:

• Shared ownership – for example in relation to commercial windfarms.
• Collective/co-operative ownership and democratic decision making. This included a call for employees who come together in a co-operative to be afforded the same rights to buy land or property being sold by their employer as are afforded to communities of place.

Inclusive ownership models are considered in more detail at Question 6.

Improving use of publicly owned assets

A number of points were made with respect to use of the existing public estate to further CWB principles, including that CWB considerations should be central to management of land owned by the Scottish Government and other public bodies. It was also suggested that there could be better or more sustainable use of the public estate for community and SME use, including that anchor organisations should identify their own VDL and develop a plan for its development for community benefit, supporting community enterprises to take ownership of underused land and property assets. Some respondents argued the need for cultural and legislative changes to encourage public bodies to see the value in community ownership of land and pro-actively drive this agenda.

There was also a view that development of Community-led Action Plans and Placemaking Plans has encouraged communities to consider future options for use of public assets in their area.

As an alternative to communities acquiring land, it was suggested there may be scope for Scottish Ministers to delegate responsibility for land management to community or other appropriate bodies for public benefit. It was noted that this approach would reduce demand on the Scottish Land Fund and other potential funding sources as land would remain in the ownership of Scottish Ministers.

Other suggestions included:

• Maximising opportunities for co-location within anchor organisations and other public agencies. Making better use of existing buildings – for example by using schools in the evening.
• Mandating and supporting public bodies to identify and safeguard sustainable unused land to provide community growing sites.
• Developing small-sale landholdings such as woodland crofts, woodland small-holdings and woodlots for ownership or tenancy on Scottish Ministers' land.
• Making it easier for community groups to acquire land currently owned by Forestry and Land Scotland.
• Ensuring funding to access anchor organisations' facilities has a programme-based approach.

Applying CWB principles to energy projects

Some respondents argued that local communities should benefit more directly from opportunities in relation to generation of renewable energy, including a presumption in favour of a community's right to lease land for its own renewable energy projects, and giving communities a stake in commercial wind farm licences in the form of shared ownership.

Supporting local supply chains

Consideration of how to support local spending and the use of local materials and contractors through the procurement processes was suggested, with particular reference to benefits this approach could bring to the supply chains associated with retrofitting energy efficiency measures to buildings. It was argued that the existing Supplier Development Programme should be promoted to energy companies and their supply chains.

Supporting food growing

As well as creating the impetus for allocation of more land as growing sites, it was suggested CWB legislation should support community growing in smaller spaces, such as corner plots. Other proposals included:

• Including provisions for food partnerships in every local authority area.
• Ensuring that CWB principles are used to guide development of Good Food Nation food plans were also proposed.
• As above, allocating sustainable unused land to provide community growing sites, allowing CWB to dovetail with the forthcoming Local Growing Strategy.

Supporting housing delivery

Comments with respect to housing included a call for an ongoing commitment to delivery of affordable homes, action on second homes and holiday lets, and the desire to protect green spaces in existing developments from further building. It was also argued that new or retrofitted, buildings should be designed in line with circular economy principles.

Specifically in relation to social housing, one respondent reported that a number of community-controlled housing associations have been taken over by larger regional or national associations, arguing that this is contrary to CWB principles as it means not only loss of influence on the part of the community-led association, but also equates to the loss of assets built up by the community. They proposed that, to protect community empowerment and CWB principles, the Scottish Housing Regulator should be directed to make survival of local housing associations the default option.

It was also reported that RSLs often struggle to acquire both existing housing stock and sites for development, for example limiting opportunities to develop key worker accommodation or to bring properties up to required standards. Additional or more flexible funding was seen as important if a CWB approach is to enable strategic housing development.

Using taxation

Suggested changes to the taxation system included:

• Levying Annual Ground Rent to encourage owners to dispose of land.
• Imposing additional taxes or fines for neglected land and buildings.
• Bringing all land, including agricultural land into the tax system.
• Applying business rates at a level comparable to activities such as forestry to moorland used for shooting.
• Increasing council tax rates for second homes.
• Reforming other local taxes – for example replacing council tax with a proportionate property tax, replacing non-domestic rates (NDR) with a land value tax for commercial land, introducing a local carbon emissions land tax, and introducing a progressive annual wealth tax on household assets above £1 million.
• Working with the UK Government to investigate whether reducing VAT on retrofitting would increase viability of this option.

Removing barriers local energy generation

A Local Authority respondent highlighted issues acting as barriers to their own CWB-related energy generation projects. They called for:

• Improvement to the National Grid to allow uptake of new renewable projects.
• Reductions in the lead in time for grid connections.
• Amendment of the national Supply of Electricity Framework to allow for sleeving^[8] of electricity, so that power generated by renewable projects on their own land can be sold back to a council at a lower price.

Other legislative areas where action could be taken

As with respect to other pillars there was a recommendation that existing policy, guidance and legislation all provide potential to further support the land and property pillar and that mapping this should be the starting point before any further legislation is considered. The need to avoid duplication of effort or use of resources was highlighted. Others suggested a number of ways that legislation could change to advance the land and property pillar.

NPF4 and planning legislation

Although it was noted that NPF4 identifies CWB as a central policy for developing productive places and supporting delivery of a range of outcomes, including around Fair Work and communities there was also a view that CWB principles could have been embedded in the planning system. It was suggested that Statements of Community Benefit for development proposals – including affordable homes and service requirements – could be strengthened to demonstrate how a proposal contributes to CWB.

It was also suggested that development proposals should be required to demonstrate proof of engagement with local communities and an ambition to create local wealth in order to access public sector finance, and that a framework for assessing CWB could be developed.

With respect to the 'infrastructure first' principle set out in NPF4 (through which infrastructure needs and developer contributions are set out at the plan-stage) it was observed that, although positive in principle, the lengthy periods between the plan-led approach and eventual delivery means parameters including finance and the economy can change. It was also noted that the approach does not work well for small, community-led developments in rural and island locations.

NPF4 policy that directs development 'to existing city, town local and commercial centres and supports sustainable rural communities, limiting out-of-town and greenfield development' was also seen as having potential to disadvantage rural and island communities where, it was argued, there needs to be scope for building on some greenfield land.

There was support for strengthening the Place Principle and other place-based approaches in support of achieving CWB outcomes, including requiring public authorities to report on how they have applied the Place Principle or the Town Centre First Principle in their decision making. It was also suggested that Local Place Plans can play an important role in engaging communities in developing CWB approaches but that they require designated funding to support their development. Use of the Place Standard Tool to facilitate broader community engagement in decision making was also recommended.

Other issues raised with respect to the planning system included a call for planning regulations to be relaxed in order to allow local communities to repurpose vacant buildings, and to make it easier to install technologies that support transition to net zero. It was also suggested that:

• Assets of Community Value should be introduced as a designation, with a presumption against the loss of use of such assets.
• More opportunities for local employment could be created by extending enterprise areas.
• Community anchor organisations should benefit from the same reduced planning fees as community councils.
• Permitted development rights for 'greenwashing' commercial forestry operations should be removed.

A new Common Good (Scotland) Act

It was recommended that Common Good legislation should be reviewed, or a new Common Good (Scotland) Act should be introduced to ensure Common Good Funds can play a role in supporting CWB. A new statutory framework to modernise Common Good law would include a clear, legally defined asset lock on all Common Good Funds, enshrine the capacity for the Funds to accumulate new assets, and replace councillor-led governance of the Funds with permanent participatory councils. Other functions would include clarifying requirements for the repurposing of existing assets, enabling redefinition of the geographic boundary of existing Funds and enabling establishment of new Funds.

Amendment of the Scottish Crown Estate Act 2019

Amendment of Section 11(2) of the Scottish Crown Estate Act 2019 was proposed so that assets may be transferred at less than market value (including for no consideration) if the relevant transaction is likely to contribute to 'furthering the goals of the Community Wealth Building Act.' Modernised Common Good Funds could be designed to become the first-choice recipients for the transfer of land previously managed by Crown Estate Scotland.

Amendment of the Land Compensation Act 1963

Amendment of the Land Compensation Act was suggested so that no account is taken of prospective planning permissions with regards to compensation for land designated for housing and infrastructure.

The new Charities (Regulation and Administration) (Scotland) Bill

To ensure that charity law reflects ambitions related to CWB, it was argued that the Charities (Regulation and Administration) (Scotland) Bill should address current capacity issues experienced by trustees, and should respond to the current lack of diversity among trustees.