Land reform in a Net Zero nation: consultation analysis

5. Regulating the market in large-scale land transfers: a new Public Interest Test, and a requirement to notify an intention to sell

The consultation paper highlights diversification of ownership of land as a key focus of land reform proposals. It is also noted that the Bute House Agreement sets out the Scottish Government’s aim to ensure the public interest is considered in transfers of large-scale landholdings, and the intention to introduce a pre-emption in favour of community buy-out where it is in the public interest. This section considers views on these aspects of land reform proposals.

A public interest test for large-scale land transfers

The SLC has recommended that the forthcoming Land Reform Bill should include a public interest test at the point of transfer for significant landholdings, and the consultation paper proposes that:

• The test would apply to large-scale landholdings, or transfers which would create a large-scale landholding, as defined in Part 4 of the consultation paper.
• The seller would need to demonstrate whether the landholding fell within the scope of the test, and a test would also be applied to the buyer.

The Scottish Government’s aim is that in order to meet its key policy objectives for the Bill, which include increasing diversity of land ownership, and improving opportunities for community groups, there are three potential outcomes of the test if it were to be conducted on the seller before sale:

i. The seller is permitted to sell the land where there is insufficient public interest to warrant interference.

ii. The sale can only proceed if the land is split into lots that cannot be acquired by one party as a whole unit.

iii. The sale can only proceed if the land is offered in whole or part to constituted community bodies.

Question 14 – We propose that a public interest test should be applied to transactions of large-scale landholdings. Do you agree or disagree with this proposal?

Responses to Question 14 by respondent type are set out in Table 31 below.

Table 31 Question 14 – We propose that a public interest test should be applied to transactions of large-scale landholdings. Do you agree or disagree with this proposal?

	Agree	Disagree	Don’t know	Total
Organisations:
Academic group or think tank	4	0	0	4
Community or local organisations	20	1	0	21
Government and NDPB	9	0	6	15
Landowner	7	23	2	32
Private sector organisations	3	8	3	14
Representative bodies, associations or unions	13	8	4	25
Third sector or campaign group	19	3	3	25
Total organisations	75	43	18	136
% of organisations	55%	32%	13%
Individuals	259	59	11	329
% of individuals	79%	18%	3%
All respondents	334	102	29	465
% of all respondents	72%	22%	6%

The majority of respondents, 72% of those answering the question, agreed with the application of a public interest test to transactions involving large-scale landholdings. Of the remaining respondents, 22% disagreed and 6% did not know. The level of agreement was lower for organisations than individuals, primarily due to the majority of Landowner organisations disagreeing with the proposal.

Please give some reasons for your answer

Around 285 respondents provided a comment at Question 14.

Support for the principle of a public interest test

Most of those commenting were in favour of the public interest test as set out in the consultation paper, and some noted that the test was a central recommendation of the SLC. It was suggested that it will be key to addressing issues around the scale and concentration of land ownership, increasing transparency and ensuring that the overall approach to land reform supports long-term public interest.

There were also references to the range of existing measures designed to support community rights; respondents described the public interest test as consistent with the focus of these measures in terms of supporting community empowerment and community wealth building. While some respondents felt that the public interest should be a guiding principle for all large landholdings, it was suggested that a specific test around land transactions will provide an opportunity to make progress against land reform objectives.

Comments in support of the public interest test also highlighted the potential impact of concentrated land ownership on local communities and how the benefits associated with land are shared. There was support for a public interest test as a means of preventing the potential negative effects of concentrated land ownership.

Respondents also highlighted a range of potential benefits that could flow from applying a public interest test, including some who felt that the rationale set out in the consultation paper is too narrowly focused on potential economic impacts. The most commonly suggested benefit was supporting the delivery of climate and nature policy objectives. There was specific reference to the relevance of the public interest test in assessing contributions to decarbonisation, biodiversity and nature restoration, and flood management, and there were calls for the test to be framed specifically around the climate and nature.

The potential to support community empowerment and community wealth building was also highlighted, along with possibilities around supporting the resilience and sustainability of communities, and delivering community-priorities (such as protecting natural or historic assets and housing).

Respondents also noted that a public interest test would bring the Scottish planning system in line with some European countries. Examples of overseas land regulation in the public interest were highlighted as potentially relevant resources to inform development of legislation.

Concerns about the principle and design of a public interest test

Some of those raising concerns about proposals for a public interest test repeated issues discussed earlier, including at Question 1, around the definition of ‘large-scale’ set out in the consultation paper. For example, it was suggested that the risk of excessive power associated with a landholding is dependent on more than the size of the holding. Some also wished to see the definition of ‘large-scale’ landholding take account of factors such as location in relation to local communities, and the financial and community value of built assets.

A number of respondents also questioned the specific targeting of large-scale landholdings and rurality of land. Some were of the view that the proposed threshold for large-scale landholdings is too high and suggested that, as currently defined, the public interest test would apply to very few land transactions each year. In this context, there were calls for the scope of the public interest test to be extended to include smaller landholdings, and it was suggested that aggregate holdings should also be included. Some respondents argued that the public interest test should be structured to enable its use in urban areas, where land ownership patterns could lead to excessive power acting against the public interest.

Others raised concerns that a single size threshold is too crude a measure to support a public interest test, and it was suggested that research around the impact of large-scale landholdings indicates that the size of holdings is not the most significant factor. Land use and management were identified by some as more relevant factors and there were calls for the regulatory framework to focus primarily on effective land use and management of large-scale landholdings.

In addition to concerns around the proposed approach to the public interest test, some respondents questioned the need for a test. This reflected a view – primarily from Landowners and Representative body respondents – that the consultation paper does not do enough to justify proposals that could have a significant impact on the ECHR property rights of those wishing to buy or sell land. There was reference to SLC research indicating that a balance can be found between unnecessary interference with property rights and the public interest. The risk of legal challenge to a public interest test on the basis of breach of ECHR was also highlighted as having potential to add to uncertainty for buyers and sellers of land.

Some of those opposed to a public interest test also suggested that existing powers and controls on land transactions and use are sufficient to make determinations in the public interest, particularly given proposals to strengthen LRRS and Land Management Plan regulations.

Concerns were also raised with respect to how a public interest test could impact the market for large-scale landholdings. For example, it was suggested that it could add to uncertainty for landowners and potential buyers around their ability to resell landholdings in the future. This was seen as having the potential to have an impact on land values, act as a barrier to investment, and lead to some landowners choosing not to sell. An associated point was that this could undermine the aims of the wider proposals by reducing opportunities to diversify land ownership. There were also calls for clarity around any compensation for loss of value, and for a more streamlined process to avoid excessive administrative burden.

There was also specific concern that a public interest test could disincentivise investment in larger-scale and longer-term projects – including those required to support the transition to net zero – for example, if landowners cannot be confident of their ability to pass on land to future generations.

Defining public interest

The definition and interpretation of ‘public interest’ was a particular issue for some respondents raising concerns around the proposed public interest test. It was suggested that further consideration is required around the definition and scope in terms of whether public interest should be interpreted at the local, regional or national level. A number of respondents – including a number of Landowners – highlighted the potential for conflict between local and national interests, sometimes citing examples of local community interests being at odds with national climate and carbon objectives. While some noted that the national interest would ordinarily be given priority over local interests, there was also a view that greater weight should be given to local community interest, given the focus of land reform proposals on community empowerment.

It was also suggested that changes in government can lead to a shift in policy priorities and what is considered in the national public interest, and that this could add to uncertainty for markets.

Some of those raising concerns around the interpretation of public interest commented that any measure would be subjective and open to interpretation. This was a particular issue for some Landowner respondents who again highlighted the potential for a public interest test to add to uncertainty for buyers and sellers; they were looking for a strong evidence base to support any assessment of public interest.

Applying the public interest test

Some respondents suggested that the consultation paper lacks sufficient detail on how the public interest test would be applied, particularly given concerns around the potential impact on landowners’ rights. Some of these respondents felt unable to comment definitively on how a public interest test would operate, and the potential impacts.

There were also a number of queries about how the public interest test would be framed including:

• How ‘public interest’ is to be both defined and measured, including who will be responsible for the assessment?
• How a public interest test would support a just transition to net zero?
• How the process will ensure parties are not required to disclose commercially sensitive information, such as rental rates?

It was also stressed that a public interest test must not prevent public bodies from acquiring sufficient land to deliver statutory duties.

There were also queries about how and when the test would be applied. These included:

• How an open and transparent process will be achieved? This was sometimes connected to concerns about a public interest test being used to justify land transactions for carbon credits or carbon offsetting.
• What checks and balances will be put in place, and how any appeal process would operate?
• How the public interest test would operate alongside other measures, such as compulsory purchase provisions?
• Whether the intention is to take forward both the public interest test and prior notification to sell, and if so how these will work together?
• Whether the public interest test would apply to part-sale of large-scale landholdings, for example sale of land or other assets? Some wished to see these transactions included in the public interest test, for example if sales are above a minimum percentage or hectarage. Others felt that disposals and acquisitions should be treated differently, including suggestions that part disposal of assets can help to diversify land ownership and, as such, should not be within the scope of a public interest test.

Question 15 – What do you think would be the advantages and/or disadvantages of applying a public interest test to transactions of large-scale landholdings?

Around 340 respondents answered Question 15.

A number of respondents, particularly Landowners, noted that the balance of advantages and disadvantages associated with the public interest test would depend on the detail of the proposed approach – including for example the criteria against which land transactions would be assessed. These respondents included some who felt unable to comment on the potential advantages or disadvantages without more detail on the proposals.

However, most of those who commented identified specific advantages and disadvantages associated with proposals for a public interest test.

Advantages of a public interest test for large-scale landholdings

The most commonly cited advantages reflected those set out in the consultation paper in relation to diversifying land ownership, increasing transparency and providing further support for community land ownership.

Some respondents – particularly Community, Government or NDPB, Third sector and Individual respondents – saw addressing adverse impacts associated with the scale and concentration of land ownership as a key focus for land reform proposals as a whole, and enabling new entrants to the land market was identified as a key advantage of application of a public interest test, particularly for rural areas.

Respondents also focused on increased transparency and accountability for land transactions and ownership, seeing the opportunity for public interest test-driven community engagement as especially important for improving transparency around land transactions. It was suggested that this could contribute to better decision-making around land ownership and management, helping to ensure that land ownership contributes to the wider public interest. Some also noted that a public interest test would provide an opportunity to assess the suitability of prospective buyers in terms of community interests.

Respondents also highlighted potential for a public interest test to further support community land ownership and noted that this has been a long-standing public policy objective. Again, opportunities for effective community engagement around land ownership were highlighted as an advantage of a public interest test. It was also suggested that proposals may be especially beneficial in circumstances where there is a clear need and plan for community-led development, with the public interest test ensuring that land is made available for this purpose.

Respondents also referred to the potential for wider advantages if a public interest test ensures that the management of landholdings contributes to other relevant government priorities. There was reference to:

• Tackling the climate and nature crises, and ensuring a just transition to net zero, including specific reference to opportunities to increase natural capital and enhance ecosystem services.
• Community wealth building and community empowerment, including specific reference to potential for a public interest test to support the community right to buy. Respondents also suggested that the public interest test would provide an opportunity to support community priorities such as housing supply, other community assets such as theatres and cinemas, and woodland and green spaces.
• Supporting rural regeneration and strengthening rural economies, including calls for an approach that ensures that rural economies are consistent with the principles of a just transition, community empowerment and community wealth building. There was specific support for the potential to realise new employment and economic development opportunities.
• Addressing the issue of vacant and derelict land, noted as a long-standing policy challenge in some areas.

Disadvantages of a public interest test for large-scale landholdings

Other respondents saw a range of potential disadvantages associated with public interest test proposals.

The risk of interference with landowner rights under ECHR was one of the most commonly referenced concerns. Landowners were particularly likely to raise such issues, with a suggestion that Article 1 of Protocol 1 (A1P1) rights and succession rights of family members could be affected. There was also concern that the proposals could be interpreted as discriminating based on the size of landholdings. It was suggested that a public interest test should maintain sufficient protection of rights under ECHR, while avoiding lack of clarity or uncertainty, and there was a concern that legal challenges to the public interest test could be likely if application of the test resulted in a loss of land value.

A number of respondents – primarily Landowners – highlighted the potential for the market for large-scale landholdings to be adversely affected if landowners and prospective buyers cannot be confident about their ability to sell landholdings in the future. There was an associated concern about the potential for the interpretation of the public interest to change over time, for example as government policy priorities change. There was a view that concerns about uncertainty could have an adverse impact on the value of large landholdings, and it was suggested that proposals may ‘skew’ the market by incentivising land transactions marginally below the definition of large-scale landholdings. However, some of those in favour of the proposals suggested that constraints on rising land prices could be in the public interest.

Respondents also suggested that the proposals would add to the legal complexity, administrative burden and timescales around large-scale land transactions, and suggested that this would result in increased costs. For example, it was noted that applying the public interest test process is likely to require input from professional advisors.

A number of respondents suggested that the disadvantages noted above – uncertainty in the market and increased costs – could disincentivise some land transactions and deter investment in land and rural economies. It was suggested that this could undermine the policy aim of increasing diversification of land ownership, in addition to other potential impacts such as reducing Land and Buildings Transaction Tax income and increasing land prices (if supply of land is reduced). There were also concerns that the public interest test could be a barrier to the long-term investment required to support other national policy objectives, with respondents making specific reference net zero, nature recovery, renewable energy and strengthening rural economies.

Issues relating to the further development of the proposals were also highlighted. This reflected a view noted earlier that the consultation paper does not include sufficient detail on the approach to a public interest test. Specific concerns included:

• The complexity of developing and implementing the public interest test, and the resources required. This included a view that significant work will be required to clarify test criteria and processes, and it was suggested that aligning the test with wider planning system reform will be a challenge. However, others were of the view that a public interest test approach could require fewer planning authority resources than the current compulsory purchase order process.
• Balancing different aspects of the public interest will be challenging. Respondents highlighted specific concerns around the potential for conflict between national and local interests. It was suggested that the test must be based on an ‘holistic’ understanding of the public interest which balances the range of relevant policy considerations. This included specific concern around the potential for an emphasis on use of landholdings for carbon offsetting to have negative impacts on other aspects of the public interest. Some respondents noted that the consultation paper does not include any proposals for how these considerations would be balanced.

Respondents also highlighted some practical considerations that will need to be considered, including timescales and appeals processes. It was suggested that, when developed, these details could have a significant impact on the effectiveness (or otherwise) of a public interest test.

Other potential disadvantages highlighted by respondents included:

• Potential jobs losses if landowners are required to reduce the size of their landholdings.
• Weakening of the trust between landowner and communities, especially if engagement becomes a ‘tick box’ exercise.
• The potential for the public interest test to be misused by individuals or groups wishing to pursue their own interests.
• The potential for the benefits of a public interest test to be limited by a lack of community capacity to exercise a pre-emptive right to buy land – including in terms of human, financial and social capital.

Question 16 – Do you think the public interest test should be applied to:

• The seller only
• The buyer only
• The seller and buyer
• Don’t know

Responses to Question 16 by respondent type are set out in Table 32 below.

Table 32 Question 16 – Do you think the public interest test should be applied to: The seller only / The buyer only / The seller and buyer / Don’t know

	Seller only	Buyer only	Seller & Buyer	Don’t know	Total
Organisations:
Academic group or think tank	0	2	1	1	4
Community or local organisations	1	0	17	0	18
Government and NDPB	0	1	5	5	11
Landowner	0	9	6	14	29
Private sector organisations	0	3	3	5	11
Representative bodies, associations or unions	0	4	11	8	23
Third sector or campaign group	0	2	13	6	21
Total organisations	1	21	56	39	117
% of organisations	1%	18%	48%	33%
Individuals	4	32	234	41	311
% of individuals	1%	10%	75%	13%
All respondents	5	53	290	80	428
% of all respondents	1%	12%	68%	19%

Percentages may not sum to 100% due to rounding

The majority of respondents, 68% of those answering the question, thought that the public interest test should be applied to both the seller and buyer for transactions involving large-scale landholdings. Of the remaining respondents, 12% favoured the buyer only option, just 1% the seller only and 19% did not know.

Please give some reasons for your answer.

Around 250 respondents provided a comment at Question 16, although some indicated that they had no strong view on the issue, or felt unable to offer a clear view due to a lack of detail on how proposals would work.

A number of respondents suggested that the public interest test should be applied to the land transaction rather than a specific party; these respondents highlighted what were seen as general principles for the public interest test, suggesting that the test should consider these principles to determine whether there is a public interest case for alternate ownership or management. Reference to specific principles or questions included how the landholding has been managed historically, how land management might change under new ownership, and how land management might compare under different potential owners.

Reasons for applying a public interest test to the seller

Other respondents felt that there are compelling arguments for both the seller and buyer to be subject to a public interest test and, reflecting the answers to the closed question, most of the points in favour of applying a test to the seller were from those who wished to see a public interest test applied to both parties.

Potential benefits identified by these respondents included the opportunity to assess the existing public interest value of a landholding, and highlight any existing concerns around whether the landholding is being managed in the public interest. Conversely, it was also suggested that a public interest test should be able to identify where a transaction is likely to lead to management approaches that are less beneficial to the public interest.

Respondents also suggested that a public interest test would ensure that both parties have fully considered the public interest implications of the transaction, and that any tenants are treated fairly and have had their voices heard as part of the transaction.

In terms of particular circumstances when it would be appropriate to apply a public interest test to the seller there was reference to the landowner being a public body and the sale resulting in land being lost to public use, to prevent profit in instances where the seller should not benefit from sales income, and where it may be appropriate for a proportion of any profits to be shared with the community.

However, it should be noted that some respondents expressed a view that the public interest test should still apply predominantly to the buyer, or that a different kind of public interest test should be applied to the seller - for example to identify sale options that would best serve the public interest. An associated view was that a public interest test is likely to deliver more limited benefits when applied to the seller.

Reasons for not applying a public interest test to the seller

Most of those referring to application of a public interest test to the seller raised concerns, with the rationale for moving away from the SLC recommendation of a public interest test applying only to the buyer questioned. It was noted that the consultation paper states that applying a test to the seller could be ‘more beneficial in meeting our land reform aims’ but does not expand on how these benefits would be realised. Some respondents were also unclear on the potential benefits of applying a public interest test to the seller, noting that it is not possible to prevent an owner from selling their land.

Respondents also highlighted that landowners will have had to comply with a range of standards, such as the LRRS and Land Management Plans, to ensure their ownership is not contrary to the public interest. In this context, it was suggested that, if a landlord has been subject to a LRRS-based review, it would be inappropriate to then also subject them to a public interest test.

There was some concern that applying the public interest test to sellers could discourage owners from bringing large-scale landholdings to market. It was noted that this could undermine the policy objective of diversifying land ownership, in which respect it was suggested that a landowner choosing to sell a large-scale landholding would always be in the public interest in terms of diversifying land ownership.

There was also a view – primarily amongst Landowner respondents – that applying a public interest test to the seller is counter-intuitive as it would be in the public interest for the sale to proceed if the current owner was deemed unsuitable, and there would be no reason to prevent the sale. In this context, there was concern that additional administrative burden could be placed on sellers for no clear benefit.

Finally, respondents suggested that the application of a public interest test to the seller would involve further property rights considerations. This included some Government or NDPB and Representative body respondents who suggested that this would add to the risk of proposals breaching A1P1 rights under ECHR, for example if sellers are forced to sell landholdings without adequate compensation.

Applying a public interest test to the buyer

A number of respondents highlighted benefits associated with applying a public interest test to the buyer; respondents did not raise any significant concerns or opposition to the application of a public interest test to the buyer, other than those opposed to the principle of such a test.

Many of those commenting in support of a test for the buyer held a view that the land management intentions of the buyer, including as evidenced by their previous land management record, are most relevant to the public interest and whether LRRS responsibilities will be fulfilled. This included specific suggestions that applying conditions of acquisition to a buyer is more likely to make a positive contribution to net zero and other policy objectives than applying a public interest test to the seller.

Respondents also highlighted that applying a public interest test to the buyer will be essential in ensuring the transaction does not result in a further concentration of land ownership with potential for negative monopoly effects. There was also reference to the importance of transparency, with the public interest test seen as an opportunity to explore the prospective buyer’s intentions, and to ensure clarity around expectations on the buyer.

Question 17 – If the public interest test was applied to the seller, do you think the test should be considered as part of the conveyancing process?

Responses to Question 17 by respondent type are set out in Table 33 below.

Table 33 Question 17 – If the public interest test was applied to the seller, do you think the test should be considered as part of the conveyancing process?

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	2	0	2	4
Community or local organisations	8	3	5	16
Government and NDPB	2	1	6	9
Landowner	7	13	9	29
Private sector organisations	2	8	3	13
Representative bodies, associations or unions	4	8	7	19
Third sector or campaign group	8	5	7	20
Total organisations	33	38	39	110
% of organisations	30%	35%	35%
Individuals	159	53	95	307
% of individuals	52%	17%	31%
All respondents	192	91	134	417
% of all respondents	46%	22%	32%

The largest proportion of respondents, 46% of those answering the question, agreed that, if applied to the seller, the public interest test should be considered as part of the conveyancing process. Of the remaining respondents, 22% disagreed and a relatively large proportion – 32% – did not know. Among organisational respondents, a majority of Landowners, Private sector organisations and Representative bodies disagreed with considering the public interest test as part of the conveyancing process.

Please give some reasons for your answer.

Around 175 respondents provided a comment at Question 17.

A number of respondents – including Landowner, Private sector and Individual respondents – repeated their opposition to applying a public interest test to the seller and highlighted some of the concerns discussed at Question 16. Others felt unable to offer a view on how the public interest test is applied without further detail on the test process, with some noting that they could not judge the extent to which the test would fit within the conveyancing process without further detail. There were specific questions around how the test will be triggered, who will conduct the test, and expected timescales.

Points in favour of a public interest test as part of conveyancing

Some respondents noted their support for the proposal to incorporate a public interest test as part of the conveyancing process. For some, this reflected a view that it would be logical for the public interest test to sit alongside the other compliance considerations that form part of the conveyancing process.

There was also reference to the potential for the public interest test to result in conditions on the sale that should be considered as part of the conveyancing process. In this context, it was suggested that incorporating the public interest test could further strengthen compliance around large-scale land transactions.

It was also noted that robust processes are already in place to support conveyancing around large-scale land transactions, and it was argued that incorporating the public interest test here would be the simplest approach and would avoid the creation of an additional statutory process. Including the test as part of conveyancing was also seen as a means of ensuring that the test is applied to all relevant transactions, with some referencing the potential for avoidance of the test.

Some of those expressing support for the proposal did see potential for it to add uncertainty and delays to the process, dependent on how the test is applied. It was suggested that the conveyancing process may require a facility for pre-clearance against the public interest test prior to conveyancing, and/or for buyers to seek advice in advance of conveyancing on the likelihood of meeting the public interest test.

Concerns around incorporating a public interest test as part of conveyancing

Similar concerns were highlighted by those who objected to consideration of the test as part of the conveyancing process; it was suggested that the complexity of legal argument and the lack of existing case law could make the application of the public interest test a lengthy process. It was reported that, in any case, conveyancing for large-scale land transactions is a lengthy and expensive process, and the concern was that the test could result in further delays, uncertainty and cost. Some respondents suggested that both buyers and sellers require certainty from the outset before significant costs are incurred and that the test risks loss of sale value and/or transactions failing. An associated suggestion was that provision for compensation may be required.

There was also a view that key elements of the public interest test must be satisfied before the conveyancing process can begin. For example, it was noted that a public interest test may require lotting, impose other conditions or provide community bodies with the opportunity to buy land. A number of respondents suggested that the public interest test should therefore be considered in advance of the conveyancing process.

Some respondents recommended that the public interest test is conducted well in advance of conveyancing, including a suggestion that this should be prior to any marketing. It was also proposed that the test should be conducted at the point that the seller chooses a buyer (but prior to conveyancing).

As noted earlier, some respondents felt unable to comment on proposals without further detail on what a public interest test would involve. Several of those commenting on how the test should be incorporated in the transaction process also noted that the detail of the approach will require careful consideration. This included specific calls for clarity in relation to compliance, enforcement and sanctions. There was also concern that conveyancers may not have the skills and capacity to apply a public interest test.

Question 18 – Do you think that all types of large-scale landholding transactions (including transfers of shares and transfers within or between trusts) should be in scope for a public interest test?

Responses to Question 18 by respondent type are set out in Table 34 below.

Table 34 Question 18 – Do you think that all types of large-scale landholding transactions (including transfers of shares and transfers within or between trusts) should be in scope for a public interest test?

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	4	0	0	4
Community or local organisations	16	0	2	18
Government and NDPB	5	0	5	10
Landowner	6	25	0	31
Private sector organisations	4	6	3	13
Representative bodies, associations or unions	8	5	9	22
Third sector or campaign group	16	0	4	20
Total organisations	59	36	23	118
% of organisations	50%	31%	19%
Individuals	251	51	17	319
% of individuals	79%	16%	5%
All respondents	310	87	40	437
% of all respondents	71%	20%	9%

The majority of respondents, 71% of those answering the question, agreed that all types of large-scale landholding transactions should be in scope for a public interest test. The level of agreement was lower for organisations than individuals, at 50% and 79% respectively, with the majority of Landowners and Private sector organisations disagreeing with the proposal.

Please give some reasons for your answer.

Around 240 respondents provided a comment at Question 18.

Rationale for including all types of large-scale transaction

Those supporting the inclusion of all types of large-scale landholding transaction sometimes commented on transactions involving transfer of shares and transfers within or between trusts, as well as on inheritance and changes of beneficial owner that do not involve shares. Respondents noted that these types of transaction can contribute to issues around the scale and concentration of land ownership, and have a bearing on the interests of local communities. It was suggested that application of the public interest test should reflect the potential impact of the transaction, rather than the model of land ownership.

It was also suggested that options agreements for developers to purchase land within a specified time period should be explored as a potential trigger for the public interest test, and it was noted that these were highlighted by the SLC as being unconducive to transparency in land transactions. Reflecting concern that information on options agreements is not publicly available, it was suggested that further research is required to explore the issue.

Support for the proposal also reflected a view that the test must be comprehensive if it is to be effective in delivering against policy objectives. Many of those commenting, including some Community respondents, were concerned that excluding some types of transaction could significantly weaken the effectiveness of proposals in terms of transparency, effective monitoring of large-scale land ownership and addressing concentration of land ownership. For example, it was noted that a substantial number of large-scale landholdings are currently held by trusts or companies, and some referred to ‘secrecy’ around trusts and similar land ownership models as a potential issue.

These comments were also linked to concern that excluding some types of transaction from the public interest test could provide an opportunity for landowners to avoid proper scrutiny of large-scale land transactions. For example, there was reference to the potential for landowners to transfer land to trusts or shareholder companies to avoid future public interest tests.

Reserved powers

It was suggested that the devolution settlement does not permit the Scottish Government to make the necessary legislative changes to ensure these transactions are in scope for the public interest test. While there was support for the Scottish Government engaging with the UK government to resolve this issue, there was also concern around the likelihood that this engagement will be successful in making the necessary legislative changes. It was also noted that this process could add significant delay to introduction of the public interest test.

Others raised more significant concerns that key land reform measures are being proposed before the Scottish Government has the competencies to deliver them. These respondents suggested it would be more appropriate to implement proposals once agreement with the UK government is reached. It was also suggested that, if the UK government refuses to ensure all transactions are in scope of the public interest test, proposals would result in discriminatory differences in how large-scale land transfers are treated dependent on the model of ownership.

Other concerns or reservations

A number of respondents, including some Landowner respondents, raised other issues and concerns about the proposal. They included that the Scottish Government has not provided evidence to justify applying the public interest test to all types of transaction, and that the approach is not compatible with the Scottish Government’s Better Regulation agenda.

In terms of specific types of transaction, some respondents agreed that it could be appropriate to apply a public interest test where there is a change of control of a company, although it was suggested that transfer of shares would not necessarily affect the concentration of land ownership as the land would still be held by the company.

Similarly, a number of respondents suggested that land transfer through generational succession of ownership or change of trustees would not have a material impact on concentration of land ownership and should not be subject to a public interest test. Many of those expressing concern about the proposals suggested that applying the public interest test to these transactions could impinge on succession and inheritance rights under A1P1 of the ECHR. This was highlighted as a particular issue if the public interest test were to apply to transfers for no consideration between family members as part of legitimate succession planning.

There was also wider concern that proposals would introduce unnecessary uncertainty in succession of ownership, potentially impacting on investment in long-term projects if current landowners perceive there to be a risk to intergenerational land transfers. It was suggested that this could lead to increased complexity in land ownership structures to mitigate the impact of proposals; connected to this were concerns that the proposals could frustrate the internal reorganisations that are sometimes necessary for effective ongoing management of large-scale landholdings. This was seen as having potential to lead to a deterioration in management of landholdings.

In relation to trusts, there was a view that use of existing regulations would be a more appropriate approach to improving public scrutiny. There was specific reference to tax compliance regulations. There were also suggestions for circumstances when an exemption from the public interest test might be appropriate. These included a proposed grace period, for example for 12 months, following inheritance of land to allow time for a new Management Plan to be put in place. An exemption in the case of default on land mortgages where the lender must be able to take ownership and control of the land was also proposed.

Other issues or concerns raised included that:

• A public interest test would be disproportionate where the practical issue of concentration of ownership is not affected, and could add unnecessary administrative burden to the transaction process.
• Further detail is needed on how the test would be applied in practice. For example, it was also noted that transfers of shares and transfers within or between trusts are not typically recorded in the Land Register, meaning that this would not be available as an information source to support enforcement.

Some respondents also proposed measures to mitigate the practical impact of the public interest test, such as an initial review process to identify whether a full public interest test is required prior to transfer. It was also suggested that consideration be given to the potential need for support to ensure that the application of the test is not too onerous.

Question 19 – We have proposed that if a public interest test applied to the seller concluded there was a strong public interest in reducing scale/concentration, then the conditions placed on the sale of the land could include:

i. The land in question should be split into lots and could not be sold to (or acquired by) one party as a whole unit

ii. The land, in whole, or in part, should be offered to constituted community bodies in the area, and the sale can only proceed if the bodies consulted, after a period of time, indicate that they do not wish to proceed with the sale

Do you agree or disagree with these conditions?

Responses to Question 19 by respondent type are set out in Tables 35 and 36 below.

Table 35 Question 19(i) – The land in question should be split into lots and could not be sold to (or acquired by) one party as a whole unit. Do you agree or disagree with these conditions?

	Agree	Disagree	Don’t know	Total
Organisations:
Academic group or think tank	2	1	1	4
Community or local organisations	11	2	3	16
Government and NDPB	6	0	4	10
Landowner	5	24	2	31
Private sector organisations	3	6	2	11
Representative bodies, associations or unions	10	7	6	23
Third sector or campaign group	17	0	4	21
Total organisations	54	40	22	116
% of organisations	47%	34%	19%
Individuals	217	69	29	315
% of individuals	69%	22%	9%
All respondents	271	109	51	431
% of all respondents	63%	25%	12%

Table 36 Question 19(ii) – The land, in whole, or in part, should be offered to constituted community bodies in the area, and the sale can only proceed if the bodies consulted, after a period of time, indicate that they do not wish to proceed with the sale. Do you agree or disagree with these conditions?

	Agree	Disagree	Don’t know	Total
Organisations:
Academic group or think tank	3	0	1	4
Community or local organisations	15	1	0	16
Government and NDPB	6	0	4	10
Landowner	6	24	1	31
Private sector organisations	3	5	4	12
Representative bodies, associations or unions	11	8	4	23
Third sector or campaign group	17	0	5	22
Total organisations	61	38	19	118
% of organisations	52%	32%	16%
Individuals	234	63	21	318
% of individuals	74%	20%	7%
All respondents	295	101	40	436
% of all respondents	68%	23%	9%

Percentages may not sum to 100% due to rounding

A majority, 63% of those answering the Question 19(i), agreed that if a public interest test applied to the seller concluded there was a strong public interest in reducing scale/concentration, then the conditions placed on the sale of the land could include that the land in question should be split into lots and could not be sold to one party as a whole unit. The level of agreement was lower among organisational respondents than Individuals, at 47% and 69% respectively.

A slightly larger majority, 68% of those answering Question 19(ii), agreed that the land, in whole or in part, should be offered to constituted community bodies in the area. Again, the level of agreement was lower among organisational respondents than Individuals, at 52% and 74% respectively.

At both 19(i) and (ii) a majority of Landowner and Private sector organisation respondents disagreed with the proposals.

Please give some reasons for your answer and suggest any additional conditions.

Around 260 respondents provided a comment at Question 19.

Some of these respondents expressed their general support for one or both of the proposed conditions, reflecting a view that both are beneficial to the public interest. It was also noted that both conditions are directly relevant to the stated objectives of the public interest test in terms of addressing the concentration of land ownership (Condition (i)) and supporting community land ownership (Condition (ii)). However, other respondents repeated concerns noted at earlier questions, particularly around potential for what was described as ‘significant interference’ in the land market to discourage capital investment in rural land and economies.

Condition (i): Splitting landholdings into lots

The most commonly raised issue in relation to Condition (i) was concern that lotting has the potential to impact the viability and market value of landholdings, with potential for sellers to lose value on the land. This was a particular concern for Landowner, Private sector and some Representative body respondents. There was a view that it would be disproportionate to disadvantage landowners in this way based only on the scale of their landholding. Some Landowner respondents also suggested that significant loss of land value, without appropriate compensation, would increase the risk of breaching a landowner’s A1P1 property rights.

Some respondents also noted potential for Condition (i) to result in negative impacts associated with fragmentation of ownership. This included reference to the potential for lotting to undermine the economies of scale that may be essential to the financial viability of landholdings, and to result in deterioration in landscape-scale land management, creating the potential for biodiversity loss.

While some of those commenting had fundamental concerns about the application of Condition (i) to large-scale land transactions, others sought clarity or proposed amendments to ensure the proposal is effective. These included:

• How any lotting of landholdings will be determined, including a suggestion that this detail is required for respondents to provide a meaningful view on the proposals.
• The approach to lotting should seek to maximise the public benefit of land; it was noted that the basis for lotting will be a key factor in the success of Condition (i). Some respondents suggested that the process may be complex, requiring detailed knowledge of the landholding and surrounding area (including local economies and employment) and an assessment of how each lot would operate.

The scale of lots was also identified as particularly significant, including because the scale could determine a community group’s capacity to purchase but also in terms of economic viability. It was also suggested that subdivision of landholdings may be more appropriate in some circumstances than others, for example dependent on landscape character.

Other points highlighted in relation to Condition (i) included:

• Lotting could be on the basis of an expression of interest exercise where local individuals, groups and businesses can register their interest in particular areas of land.
• Lotting would need to take account of and maintain the viability of any crofting tenancy.
• There is a need for safeguards to ensure that subdivided landholdings continue to comply with the LRRS and other relevant provisions.
• The approach must ensure that application of Condition (i) can prevent aggregated ownership of lots, including reference to potential for use of complex company arrangements to circumvent proposals.

Condition (ii): Land is offered to constituted community bodies

A number of those commenting on Condition (ii) – including Landowner, Private sector organisation and Representative body respondents – noted that there are already mechanisms in place to enable community bodies to register an interest and acquire land. While some noted that there may be scope for improvement to existing mechanisms, a number of respondents suggested that the consultation paper does not do enough to justify the need for additional legislation.

There were also concerns that community groups may lack the capacity or skills to take on large-scale landholdings. This was most commonly raised in relation to the initial land purchase, including a view that the market value of large-scale landholdings is likely to be beyond the means of most community organisations. An associated concern was this lack of capacity could add significant delays to the transaction process, with potential for loss for the seller.

Respondents also highlighted the importance of prospective landowners being in a position to manage and maintain the economic viability of the landholding. This included concern that community groups may lack the skills and experience to ensure rural landholdings contribute effectively to national policy objectives. Reference was also made to the capacity of community groups to manage funds realised from the land, and deal with the risk of litigation arising from management of the landholding.

Potential challenges were also highlighted in relation to assessment of the value of landholdings. The Land Court was cited as having expertise in dealing with issues around land valuation, and reference was made to the recruitment and training requirements of any other body required to adjudicate on land values. However, there was also a view that community groups should not be required to meet market prices for land where the public interest test has been failed and/or the purchase is to enable communities to live on the land. Some respondents suggested that a new approach to valuation of the landholding is required to ensure a fair price is paid where the buyer is acting in the public interest. This included a proposal that land valuation should take account of the impact of any mismanagement of landholdings on local communities.

In terms of ensuring application of Condition (ii) is effective and addresses the issues noted above, there were queries about the types of constituted community organisation that would be eligible and reference to other types of organisation that may be in a better position to purchase land on behalf of, or in collaboration with, community groups. This reflected concerns noted above around the likelihood of community groups being able to raise the funds to meet market values for large-scale landholdings. In this context, there were calls for communities to have the option to nominate a third party to purchase and manage the landholding on its behalf.

Respondents referred to several specific types of organisation as potential nominees. These were primarily public bodies or third sector organisations such as environmental bodies, local authorities, housing associations, conservation charities or other third sector organisations, and the Scottish Government. It was also suggested that it may be appropriate for a private company to take on a landholding, where arrangements are in place to ensure the community receives some or all of the benefits from the land.

Other comments around the design and operation of Condition (ii) included:

• There may be a need for community bodies to demonstrate they have the resources to effectively manage the landholding, before the transaction can proceed.
• Additional support – financial and otherwise – may be required by prospective community owners. Specific reference was made to challenges in areas where community engagement is less well established and/or local trusts are less effective. However, some respondents were of the view that many community groups would require support to take on landholdings. Respondents saw a need for specific support around raising funds (including calls for additional funding via the Land Fund), and staff time to co-ordinate the process.
• Potential community buyers should be given sufficient time to undertake an appropriate appraisal of options, notify an intention to buy, negotiate terms and secure funds. Again this reflected points noted above around the challenges facing community bodies in securing required funds, and it was suggested that community groups should have the option to bid for smaller lots within the landholding. It was also suggested that 6 months is unlikely to be sufficient time for community groups to raise funds, and that community bodies may require more time where they are seeking to acquire part or parts of a landholding.
• There is the potential for conflict between community interest and a tenant’s interest, and mediation may be required to resolve this.
• The approach must ensure that landowners cannot avoid application of Condition (ii) by inflating the asking price of the landholding beyond the means of any community buyer.

Application of conditions

Respondents also highlighted a range of other considerations around the practical approach to application of the conditions. This included a view that both conditions will require complex procedures requiring time and resources to implement effectively. This was most commonly in relation to how the two proposed conditions should be sequenced. For example, a number of respondents – including Community and Third sector respondents – proposed that options for community ownership (Condition (ii)) should be applied before lotting of land (Condition (i)) is considered. It was suggested that this would strengthen proposals in terms of supporting community land ownership, and that a similar approach is taken to surplus sales by Forestry and Land Scotland.

Queries were also raised in relation to how the proposed conditions would relate to other legislation and mechanisms. There was specific reference to the proposed prior notification of intention to sell, existing community rights to buy, and community-led plans such as Local Place Plans.

Some respondents saw a need for flexibility in the application of conditions, for example to take account of which condition may be most appropriate in light of local circumstances. Specific suggestions included taking account of potential loss of employment as a result of lotting of large-scale landholdings, and allowing sale of multiple lots to a single owner if other purchasers do not come forward.

Other suggested conditions

A number of other options or conditions were proposed if the public interest test has not been met. These included:

• Allowing the acquisition of landholdings (whole or in part) by an organisation acting on behalf of an eligible community body or to support delivery of specific activities in the public interest. This included specific reference to public or non-statutory bodies such as environmental organisations or housing associations as potentially being better placed than some community groups to take on landholdings
• Enabling local authorities to take on landholdings for the common good, for example if constituted community groups invoke their right of first refusal.
• Government taking ownership of landholdings as an interim measure, to allow time for any lotting of land and/or to maximise the opportunity for community organisations or others to bid for land. It was suggested that this approach would be more effective in supporting diversification of land ownership by maximising opportunities for communities and others to take on landholdings, and would provide sellers with a greater degree of security.
• The landowner being required to create crofts within the landholding, with the number and size of crofts reflecting the outcome of the public interest test and land management in the area.
• Where there are tenanted farm holdings, land being offered for sale to the current tenants.
• In areas that have been substantially depopulated, offering landholdings to a constituted group that has registered interest to establish a new community.

Question 20 – Do you think that a breach of the Lands Right and Responsibilities Statement should be taken into account when determining the outcome of a public interest test?

Responses to Question 20 by respondent type are set out in Table 37 below.

Table 37 Question 20 – Do you think that a breach of the Lands Right and Responsibilities Statement should be taken into account when determining the outcome of a public interest test?

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	3	1	0	4
Community or local organisations	16	0	0	16
Government and NDPB	6	0	5	11
Landowner	5	24	2	31
Private sector organisations	6	6	1	13
Representative bodies, associations or unions	10	7	5	22
Third sector or campaign group	14	1	5	20
Total organisations	60	39	18	117
% of organisations	51%	33%	15%
Individuals	236	57	20	313
% of individuals	75%	18%	6%
All respondents	296	96	38	430
% of all respondents	69%	22%	9%

Percentages may not sum to 100% due to rounding

The majority of respondents, 69% of those answering the question, thought that a breach of the LRRS should be taken into account by the public interest test. Of the remaining respondents, 22% did not think so and 9% did not know.

Please give some reasons for your answer.

Around 210 respondents provided a comment at Question 20.

Points for clarification

A number of respondents highlighted points requiring clarification around how LRRS breaches would be taken into account by the public interest test. This reflected a view – primarily from Landowner respondents – that the consultation paper provides very little detail on how the proposal would work in practice.

Some respondents sought clarity on whether the proposal would apply to LRRS breaches by the seller and/or the prospective buyer. One view was that LRRS breaches by the seller would not be relevant, with some noting that previous breaches by the seller would only add to the case for a change of ownership and would not have a bearing on the likelihood of a new owner breaching LRRS requirements.

Respondents also saw a need for further detail on the following points:

• How a breach of LRRS would be taken into account in practice by a public interest test?
• The timescales within which a breach would be considered relevant to the public interest test.
• Whether the LRRS breach would be linked to the landowner/manager or the landholding?

Arguments for LRRS breaches being taken into account

Some respondents were of the view that prior breaches of the LRRS by the prospective buyer would be relevant. It was suggested that such breaches should raise concerns around the extent to which the prospective buyer would be an appropriate manager of the landholding under consideration, and would justify further scrutiny to determine the buyer’s commitment to management of the landholding in the public interest.

It was also noted that taking account of LRRS breaches would be consistent with status of the LRRS as mechanisms for ensuring sustainable management of landholdings. Some suggested that taking account of breaches in this way could incentivise landowner compliance with LRRS, for example if the sale price for landholdings was reduced if the purchaser was required to remedy the seller’s breach of the LRRS.

In terms of practical application of the proposal, it was suggested that clear definitions within legislation and guidance of what constitutes a breach of the LRRS would be required. Respondents also proposed that the weight ascribed to any LRRS breaches should reflect the number and severity of those breaches. There was an associated suggestion that the public interest test should only give significant weight to persistent and or serious breaches of LRRS. Some also wished to see the public interest test take account of the reasons for the breach, and any action taken by the landowner – for example whether this was remediation, mitigation, compensation or finding a solution to the breach.

Arguments against LRRS breaches being taken into account

The most commonly cited argument against the proposal reflected a view discussed earlier at Question 4, that the LRRS should remain a set of voluntary principles, and compliance should not be made a legal duty. This was then connected to not being used in a public interest test. This view was expressed by a range of respondents including Landowners, Representative body, Private sector respondents and Individuals. These respondents also suggested that, as a set of principles, the LRRS is too ambiguous to support an objective assessment of a breach. There was an associated concern that the LRRS cannot support an objective assessment of the seriousness of any breach, for example to inform how much weight this should be given by the public interest test.

In this context, it was suggested that preventing a buyer from purchasing a landholding on the basis of a breach of LRRS principles would be disproportionate, especially if the breach was fully remedied. It was also suggested that that any potential breaches could be subject to legal challenge, and could add significant delays to any process involving a public interest test.

In addition to these concerns about the suitability of the LRRS to inform a public interest test, there was also a view that the outcome of the public interest test should not be used to further penalise landlords for prior breaches of LRRS. It was argued that any breaches of LRRS should be dealt with separately from the public interest test.

Question 21 – Do you think that a public interest test should take into account steps taken in the past by a seller to:

a) Diversify ownership

b) Use their Management Plan to engage with community bodies over opportunities to lease or acquire land

Responses to Question 21 by respondent type are set out in Tables 38 and 39 below.

Table 38 Question 21(a) – Do you think that a public interest test should take into account steps taken in the past by a seller to diversify ownership

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	1	3	0	4
Community or local organisations	11	4	1	16
Government and NDPB	7	1	3	11
Landowner	6	21	4	31
Private sector organisations	2	8	2	12
Representative bodies, associations or unions	8	9	5	22
Third sector or campaign group	9	3	8	20
Total organisations	44	49	23	116
% of organisations	38%	42%	20%
Individuals	195	76	42	313
% of individuals	62%	24%	13%
All respondents	239	125	65	429
% of all respondents	56%	29%	15%

Percentages may not sum to 100% due to rounding

Table 39 Question 21(b) – Do you think that a public interest test should take into account steps taken in the past by a seller to use their Management Plan to engage with community bodies over opportunities to lease or acquire land

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	1	3	0	4
Community or local organisations	11	4	1	16
Government and NDPB	8	1	2	11
Landowner	7	20	4	31
Private sector organisations	3	7	2	12
Representative bodies, associations or unions	9	8	5	22
Third sector or campaign group	9	3	7	19
Total organisations	48	46	21	115
% of organisations	42%	40%	18%
Individuals	215	67	29	311
% of individuals	69%	22%	9%
All respondents	263	113	50	426
% of all respondents	62%	27%	12%

Percentages may not sum to 100% due to rounding

A small majority of respondents, 56% of those answering the question, thought that the public interest test should take account of previous steps taken by the seller to diversify ownership. However, this fell to only 38% of organisational respondents.

A majority, 62% of those answering the question, thought a public interest test should take account of a seller’s use of their Management Plan to engage with community bodies around leasing or acquisition of land. Again, the figure was lower among organisations, where only 42% agreed.

Please give some reasons for your answer.

Around 210 respondents provided a comment at Question 21.

Taking account of a seller’s prior behaviour

Many of those commenting referred to the principle of taking account of the seller’s prior actions, in addition to comments around the specific actions (a) and (b).

A number of respondents noted their support for proposals to take into account the seller’s prior behaviour. This reflected a view that good practice, such as taking steps to diversify ownership or engage with local communities, is a potential indicator of effective and sustainable land management practice and hence is relevant to the public interest. There was also a view that taking account of these factors in the public interest test could incentivise good practice from landowners and help to create a culture of compliance. However, it was also suggested that the past behaviour of the seller is only relevant if it relates to the landholding under consideration, and that any activities in relation to other landholdings should not be taken into account.

Others disagreed with the principle of the public interest test taking account of the past actions of the seller. These respondents reiterated a view discussed at Question 20 that the public interest test should focus on future ownership of the landholding. It was also noted that the SLC’s Land and Human Rights Forum has questioned the relevance of the sellers’ record in assessing the risk that a transaction might add to a localised monopoly. There was also concern around potential for the proposals to add to the legislative burden on sellers for little benefit to the public interest. It was suggested that this could limit land sales and thus restrict opportunities to diversity ownership.

Prior steps to diversify ownership

Some respondents, including Community, Government and NDPB, Representative body and Individual respondents, thought that landowners taking steps to diversity ownership can be seen as a positive sign of effective and sustainable land management. However, others noted that selling land in the past may not have been appropriate or possible for the landowner, and there was a view that this should not be given weight by a public interest test. A number of Landowner respondents also expressed concern that using the public interest test to dictate if and when a seller should diversify their ownership represents undue interference, and would not be compatible with landowners’ private property rights.

Other comments focused on the practical application of the proposal. They included that the public interest test should take account of efforts by landowners to diversify ownership, even if these have not been successful. In this context, it was noted that work to diversify ownership may not always be effective, for example where there is insufficient interest. It was also noted that this information could inform the outcomes of a public interest test; for example a lack of interest in the seller’s previous attempts to sell small parcels of land could indicate that lotting might not be a suitable option.

In terms of other potential challenges for landowners in diversifying ownership, it was reported that it may be difficult to accurately assess a landowner’s efforts in this area, and there was a suggestion that clear guidance would be required on what constitutes meaningful steps by a seller to diversify ownership. Respondents also sought clarification around what should be considered as diversified ownership. For example, it was suggested that steps to diversify land use, such as through leasing to community organisations or creation of tenanted holdings, should be taken into account even if they do not result in a change of land ownership.

Prior steps to engage with community bodies

Some respondents saw a landowner’s prior engagement with community bodies as good practice in terms of effective and sustainable land management, and thus relevant to the public interest. However, others highlighted potential challenges for the public interest test in taking account of prior engagement. For example, some respondents noted that landowner engagement with communities is encouraged where it is consistent with the effective management of the landholding, suggesting that the public interest test should not penalise landowners where this engagement would not have made business sense.

Respondents also raised issues around how a public interest test would determine that any prior engagement with community bodies was genuine and conducted appropriately. It was suggested that clear guidance would be required on what constitutes meaningful steps by a seller to engage with community bodies. This guidance was also noted as potentially useful for landowners, in terms of providing clarity on when they have been compliant with this measure.

It was also suggested that guidance will be required on the range of suitable community bodies for engagement by landowners, and a that all relevant community engagement should be taken into account irrespective of whether this was part of the Management Plan or other local mechanisms.

Practical considerations

Respondents also raised several issues relating to the practical application of the proposal. These included that further detail is needed around how these factors would be balanced with other considerations in the public interest test. There was a specific concern that consideration of the past actions of the seller should not deflect from the importance of a proper assessment of the prospective buyer. As noted earlier, a number of those commenting were of the view that the prospective buyer’s potential future management of the landholding is more relevant for the public interest test. It was suggested that prior behaviour of the seller should therefore be given only limited weight.

c) What time period do you think this should cover?

Around 215 respondents answered Question 21(c).

Many of these respondents did not express a specific view on the time period but restated their opposition to the public interest test taking the seller’s past behaviour into account. However, others identified a range of factors that should be taken into account when considering the appropriate time period for the assessment.

Relevant factors

A number of respondents suggested that the time period should be linked to the length of the current land ownership. For some, this was associated with a concern that current landowners should not be judged on decisions made by previous generations. Others suggested that the assessment should be based on the time period of the Land Management Plan and LRRS.

In terms of other factors that should inform the time period, there was reference considering the seriousness and impact of any prior poor management by the seller. Associated suggestions included that more recent issues should be weighted more heavily by the public interest test, and that any historical poor management should be given less weight if the seller can demonstrate that there have been improvements.

However, it was also noted that opportunities for sellers to diversify ownership or engage with community bodies around leasing or acquisition of land, may not arise often; there was an associated concern that a shorter time period could discriminate against sellers in areas with a limited history of community purchase and/or where community acquisition could take a longer period.

Some suggested that it may not be appropriate or possible to agree a definitive time period. There was a view that judgement should be used to determine an appropriate time period on a case-by-case basis, depending on the specific circumstances and history. For example, some of those suggesting shorter periods noted that it may be appropriate for the public interest test to consider any consistent ongoing processes that pre-date this period.

There was also a view that different time periods for diversification of ownership and community engagement would be appropriate, including a suggestion that consideration of prior engagement with community groups should be over a shorter timeframe.

A concern was also raised about the potential for sellers to challenge the public interest test, if the definition of an appropriate time period for the assessment is seen as subjective.

Specific proposals

Many of those commenting suggested specific times periods for consideration of sellers’ prior behaviour. Reflecting the range of potentially relevant issues noted above, suggestions ranged widely from less than 6 months to more than 50 years.

Respondents were most likely to agree with the 5-year period proposed in the consultation document. Other respondents were split between those suggesting shorter time periods and those preferring a time period of 10 years or more.

Further comments from those proposing a shorter period included that circumstances affecting landowners’ ability to diversify ownership and/or engage with community groups can change relatively quickly, and a specific suggestion that sellers should be encouraged to engage with community groups immediately prior to bringing a landholding to market.

Further comments from those proposing longer time periods (of 10 years or more) included a suggestion that a longer timeframe is necessary to identify the seller’s ‘pattern of behaviour’ in relation to the landholding. Some respondents also wished to see the public interest test consider past actions over the whole period of the landholding, including the potential for the public interest test to consider ‘historical harm’.

Question 22 – Do you think the responsibility for administering the public interest test should sit with:

• The Scottish Government
• A public body (such as the Scottish Land Commission)

Responses to Question 22 by respondent type are set out in Tables 40 and 41 below.

Table 40 Question 22 – Do you think the responsibility for administering the public interest test should sit with the Scottish Government?

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	1	1	1	3
Community or local organisations	2	5	6	13
Government and NDPB	0	4	4	8
Landowner	1	26	2	29
Private sector organisations	2	7	2	11
Representative bodies, associations or unions	2	12	7	21
Third sector or campaign group	2	10	7	19
Total organisations	10	65	29	104
% of organisations	10%	63%	28%
Individuals	98	111	43	252
% of individuals	39%	44%	17%
All respondents	108	176	72	356
% of all respondents	30%	49%	20%

Percentages may not sum to 100% due to rounding

Table 41 Question 22 – Do you think the responsibility for administering the public interest test should sit with a public body (such as the Scottish Land Commission)?

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	2	1	1	4
Community or local organisations	12	0	3	15
Government and NDPB	4	0	5	9
Landowner	4	14	12	30
Private sector organisations	3	7	3	13
Representative bodies, associations or unions	7	8	6	21
Third sector or campaign group	10	4	5	19
Total organisations	42	34	35	111
% of organisations	38%	31%	32%
Individuals	204	54	42	300
% of individuals	68%	18%	14%
All respondents	246	88	77	411
% of all respondents	60%	21%	19%

Percentages may not sum to 100% due to rounding

Only 30% of those answering the question thought responsibility for the public interest test should sit with the Scottish Government. This figure dropped to only 10% support from organisations. In contrast, most respondents, 60% of those answering the question, thought that responsibility should sit with a public body such as the SLC.

Please give some reasons for your answer and suggest any additional conditions.

Around 240 respondents made a comment at Question 22.

Some of these respondents repeated their opposition to the principle of a public interest test, while others suggested that the consultation paper provides insufficient detail on what the test will involve for them to form a clear view.

A number of those commenting also raised issues covered at earlier questions, in relation to the kind of organisation that should be responsible for dealing with potential breaches of the LRRS (Question 5(c)) or enforcing compulsory Land Management Plans (Question 11).

Reasons for responsibility to sit with the Scottish Government

As noted above, a minority of respondents supported the Scottish Government taking responsibility for the public interest test.

Specific reasoning provided in favour of this position included that the Scottish Government is democratically accountable in a way that other public bodies are not. Reference was also made to research indicating that land transaction approval is most effective when conducted at the national level, with appropriate support. In this context it was suggested that it may be beneficial for the Scottish Government to have access to advice and support from SLC.

Some also suggested that the Scottish Government could choose to delegate responsibility for the public interest test to another public body at a later date.

Reasons for responsibility to sit with a public body such as SLC

As at Questions 5(c) and 11, respondents who thought responsibility should sit with a public body often argued that this should be the SLC. Respondents referred to SLC’s wider responsibilities in relation to land ownership, including specifically in relation to ensuring compliance with the LRRS and Land Management Plans, and suggested that administration of the public interest test would be consistent with this role. Some also highlighted SLC’s independence from government as potentially significant for administration of the public interest test.

It was also noted that the SLC has the necessary experience and knowledge to undertake the public interest test. However, concerns were also highlighted around the need for additional resourcing to support this role. Further comments included that the SLC may benefit from working in collaboration with other relevant bodies, such as NatureScot and SEPA.

Neither

A small number of respondents felt unable to make a choice between the two options, including because this would depend on how plans develop.

Others suggested that neither Scottish Government nor the SLC would be suitable choices as they lack the independence required to ensure fair application of the public interest test. An associated view was that their involvement would in effect make these bodies ‘judge and jury’ of the process and that there would be potential for conflict of interest given the Scottish Government’s responsibility for passing land reform legislation, and the SLC’s role in providing recommendations to the Scottish Government around land reform. It was suggested that having taken public, pro-reform policy positions should disqualify either organisation from the process. Reference was also made to the Scottish Government as a large-scale landholder that could itself be subject to a public interest test.

It was also noted that, if Scottish Government were not involved in administration of the test, this would enable a final appeal process to Scottish Ministers.

Characteristics of the organisation administering the test

Those raising concerns around the independence of the SLC and the Scottish Government generally wished to see an impartial body, independent of government, take on administration of the public interest test. There was specific reference to the need for the test to be administered in a way that balances public and private interests.

Respondents also highlighted the need for adequate resourcing of whichever organisation takes responsibility for the public interest test, with a suggestion that this is a more significant issue than which body takes on the responsibility. The importance of ensuring that the responsible organisation can support effective assessment against the public interest was highlighted, including specific concerns around the potential for delays to land transactions and for the administration of the public interest test to detract from the responsible body’s other functions.

Suggested additions and amendments

Respondents referred to several alternatives for administration of the public interest test, reflecting some of the issues and concerns discussed above. The most frequent suggestion was for the local authority or other local body to take on this role. This was linked to a view that local knowledge may be relevant to the public interest test, and that a local body may be better placed to identify potential community group interest in acquiring land. There was also reference to the value of local democratic accountability. Some respondents proposed a role for RLUPs, noting that these partnerships (once operating) may also have the required local knowledge to administer the public interest test. However, there was also concern that local government may be unwilling to take on new duties in the context of ongoing pressures on their government budgets.

There was also a suggestion that the public interest test will require determinations of a judicial character, and that a non-judicial body taking on this role could increase the risk of decision being subject to legal challenge. It was also suggested that proposals may risk breach of A1P1 rights under the ECHR if the body with responsibility for the public interest test is not an independent, qualified tribunal. In this context, the Scottish Land Court was identified as a potentially appropriate body to take on the public interest test.

In addition to the above suggestions, some saw a need for an appeal process in relation to the public interest test. This included specific suggestions that this should be available via Scottish Ministers, the Scottish Land Court, or other judicial bodies.

Question 23 – Do you think the proposal that a public interest test should be applied to transactions of large-scale landholdings would benefit the local community?

Responses to Question 23 by respondent type are set out in Table 42 below.

Table 42 Question 23 – Do you think the proposal that a public interest test should be applied to transactions of large-scale landholdings would benefit the local community?

	Yes	No	Don’t know	Total
Organisations:
Academic group or think tank	4	0	0	4
Community or local organisations	18	0	1	19
Government and NDPB	6	0	4	10
Landowner	5	17	7	29
Private sector organisations	4	5	4	13
Representative bodies, associations or unions	11	4	6	21
Third sector or campaign group	15	1	5	21
Total organisations	63	27	27	117
% of organisations	54%	23%	23%
Individuals	239	43	29	311
% of individuals	77%	14%	9%
All respondents	302	70	56	428
% of all respondents	71%	16%	13%

A majority of respondents, 71% of those who answering the question, thought that applying a public interest test to large-scale land transactions would benefit local communities. Individuals were more likely to think this than organisations at 77% and 54% respectively.

These figures are very similar to those at Questions 6 (on whether making the LRRS a legal duty would benefit communities) and 12 (whether making management plans a legal duty would benefit communities). A large majority of those who agreed that public interest test proposals would benefit local communities gave the same answer at Questions 6 and 12.

Please give some reasons for your answer.

Around 215 respondents made a comment at Question 23.

A number of respondents raised concerns about the lack of detail on how the public interest would operate, with some feeling unable to comment on potential benefits without this detail.

Some respondents noted that the potential for the public interest test to secure benefits for local communities will depend, in part, on the details concerning how the test is implemented. There was specific reference to the categorisation of large-scale landowners, triggers for disposal of landholdings, the level of engagement with local communities, how ‘public interest’ is defined, and how an ‘objective’ assessment will be ensured.

Others repeated their support for the proposal as a means of mitigating the impacts of large-scale and concentrated land ownership on local communities. There was reference to research evidencing the potential for large-scale landholdings to have adverse community impacts, especially in rural areas, and it was reported that other land reform legislation has demonstrated that public interest tests can act as a catalyst for action.

The importance of the test being framed around delivery of community benefits was highlighted, for example by supporting community access to land. It was also suggested that implementation must ensure that the public interest test provides an opportunity to identify potential community benefits. This reflected a view that potential benefits are likely to vary from case to case, and that negotiation may be required to identify and deliver these.

Other comments in relation to whether a public interest test would benefit the local community, reflected many of the issues highlighted at Questions 6 and 12, including in relation to community land ownership, engagement with local communities, how the public interest is defined, and the potential for negative impacts.

How a public interest test may benefit the local community

Supporting community land ownership

Enabling community land ownership was seen as the primary way in which the public interest test can deliver local community benefits. Respondents highlighted the potential for the test to support identification of opportunities for community purchase, both in terms of identifying potential community interest and capacity and highlighting opportunities where landholdings which may be suitable for community acquisition (in whole or part). There was specific reference to:

• The potential for lotting of landholdings to facilitate community purchase.
• First refusal for communities in relation to suitable landholdings.

Community engagement

Respondents also highlighted the importance of the public interest test mandating engagement with communities as part of large-scale land transactions. This was identified as particularly important in improving relationships between landowners and communities, especially if landowners are not resident locally.

Access to information

The public interest test’s role in improving access to information was highlighted, with the test seen as having potential to contribute to transparency and accountability around land use and land transactions. There was specific reference to improving communities’ understanding around land ownership and the opportunities available to them.

Better land management

Some respondents noted that the public interest test may be an incentive for better land management practices. It was suggested that the local community would benefit if the public interest test can encourage more large-scale landowners to manage land in a way that is consistent with LRRS requirements and incorporates effective community engagement.

How a public interest test may not benefit the local community

Respondents also highlighted a range of issues that may limit the extent to which a public interest test can deliver positive impacts for local communities.

This included concerns around the proposed threshold for large-scale landholdings, and a view that limiting the number of transactions to which the test applies will also limit the scope for community benefits. There were calls to apply the test to a wider range of land transactions, including aggregate holdings, and also to landholdings that are being offered for sale. It was noted that the latter may otherwise continue to be managed in a way that does not reflect the public interest.

However, others suggested that a public interest test is likely to offer limited additional benefit where landowners already have effective management strategies that comply with LRRS requirements and involve effective engagement with communities. This reflected a view that only a small number of landowners do not currently manage their landholdings effectively. It was also suggested that the consultation paper does not present evidence to link large-scale land ownership with adverse impacts on local communities.

There was also a view that the outcome of a public interest test may not align with the interests of the local community, for example where the test must also take account of a national public interest. This reflected wider concerns around challenges in defining the public interest, and the range of criteria that may be considered relevant. It was also noted that a public interest test may be required to take account of multiple local communities with different – and potentially incompatible – priorities or interests. Some also noted that the public interest test may not create significant benefits over and above existing mechanisms for community acquisition of land.

There was also some concern around the capacity for local communities to take advantage of the potential benefits offered by the public interest test. These included that communities are unlikely to fully understand the range of issues that effective land management must consider and also the extent to which communities are likely to have the capacity and desire to take on ownership of landholdings, in whole or part. There was also reference to the potential for communities to disagree with conditions imposed following a public interest test.

Potential negative impacts

Respondents also noted the potential for a public interest test to have negative consequences for local communities. This was most commonly in relation to potential for a test to deter inward investment in large-scale landholdings, with a knock-on negative impact on rural economies. It was also suggested that a public interest test could inhibit land management activity that would be in the public interest, including concern that application of the test could lead to the creation of many small, less economically viable landholdings.

There were specific concerns that the introduction of a public interest test could delay or deter the investment required to contribute to net zero targets, such as peatland and environmental restoration.

Question 24 – Do you have any other comments on the proposal that a public interest test should be applied to transactions of large-scale landholdings?

Around 140 respondents made a comment at Question 24.

The majority of these respondents used the opportunity to reiterate issues considered at earlier questions. For example, reference was made to: the scope of a public interest test in terms of the types of transaction to which the test applies; how ‘community’ and ‘public interest’ are to be defined; potential outcomes of a public interest test in terms of the conditions placed on any sale of land and likely community capacity to take on landholdings; and the potential benefits of a public interest test.

Some respondents objected to the principle of a public interest test, raising concerns about the potential for such a test to have negative impacts, as well as the challenges of applying a test across a diverse range of large-scale landholdings. Respondents also highlighted questions around how a public interest test would operate alongside other land reform proposals, such as LRRS compliance and Land Management Plans.

The relevance of wider government policy objectives, particularly in relation to environmental and net zero targets, was also highlighted. Several international examples of public interest tests and other controls on land transactions were cited as demonstrating the potential for proposals to support land reform objectives.

In terms of ‘new’ issues raised, there was reference to oversight and monitoring of the public interest test. Some respondents saw a need for effective compliance systems ‘with teeth’. There were associated concerns about the need for safeguards to ensure that the public interest test is applied in all relevant circumstances and that avoidance is prevented. It was also suggested that enforcement of the public interest test could require significant resourcing, and that further consideration should be given to how landowner compliance can be encouraged.

Other issues and suggestions provided at Question 24 included:

• Calls for the public interest test to be applied to land that is being held without transaction, for example where the Land Management Plan is updated.
• Calls for the public interest test to provide opportunities for other forms of land ownership, in addition to community acquisition. This included reference to small-scale land-based enterprises.
• Reference to other means of addressing concentration of land ownership, including reform of legislation around succession.
• A perceived need for further work to identify and share good practice examples to support implementation.
• The potential to introduce additional requirements for foreign purchasers.

Prior notification of intention to sell

The consultation paper notes that further provision may be required to allow opportunity for the planning and fundraising that communities need to acquire land, particularly in the context of rising land values and increasing use of off-market transactions. It is therefore proposed that Land Management Plans should include a requirement for landowners to give prior notice to surrounding community bodies of any intended sale of land and that the community body or bodies would have 30 days to notify the landowner of whether they are interested in proceeding with a sale, and a further 6 months for negotiation of the sale.

This could include community bodies which are compliant with current Community Right to Buy requirements, and/or other community bodies whose aims are social or community benefit (for example, Registered Social Landlords).

Question 25 – We propose that landowners selling large-scale landholdings should give notice to community bodies (and others listed on a register compiled for the purpose) that they intend to sell.

Q25(a) Do you agree or disagree with the proposal above?

Responses to Question 25(a) by respondent type are set out in Table 43 below.

Table 43 Question 25(a) – We propose that landowners selling large-scale landholdings should give notice to community bodies (and others listed on a register compiled for the purpose) that they intend to sell. Do you agree or disagree with the proposal above?

	Agree	Disagree	Don’t know	Total
Organisations:
Academic group or think tank	4	0	0	4
Community or local organisations	21	0	0	21
Government and NDPB	9	0	3	12
Landowner	10	22	1	33
Private sector organisations	4	4	4	12
Representative bodies, associations or unions	17	3	4	24
Third sector or campaign group	20	2	3	25
Total organisations	85	31	15	131
% of organisations	65%	24%	11%
Individuals	262	49	10	321
% of individuals	82%	15%	3%
All respondents	347	80	25	452
% of all respondents	77%	18%	6%

Percentages may not sum to 100% due to rounding

A majority of respondents, 77% of those answering the question, agreed with the proposal for community bodies to be notified of intention to sell large-scale landholdings. Of the remaining respondents, 18% disagreed and 6% did not know

Please give some reasons for your answer

Around 250 respondents made a comment at Question 25(a).

Reasons for supporting prior notification to sell

Comments from those supporting the proposal included that it has the potential to contribute to wider land reform, community empowerment and community wealth building policy priorities. It was also suggested that engagement with communities should be good practice for landowners considering a sale, with some noting that this is already part of their land management approach.

Respondents also identified a range of issues which limit the ability of communities to participate in the land market. These include rising land values and the ‘pace’ of the land market and, in particular, the prevalence of off-market sales. The SLC’s Rural Land Market Insights Report was cited as identifying an increase in use of off-market sales in rural land markets. It was also suggested that rural communities are often small and lack the resources to compete effectively in the land market, with these cited as further reasons in support of prior notification in these areas.

In terms of other potential barriers to communities accessing land ownership, it was suggested that the process can be frustrated where there are not clear lines of communication between the landowner and the community. It was also suggested that some communities have been reluctant to express interest in land via existing community right to buy provisions, due to fear that this could be detrimental to good relations with the landowner. It was also noted that communities may need to explore purchase options and raise funds, and that this may be more challenging when community groups have limited resources and expertise. These types of issues were thought to make it more difficult for communities to participate in the land market, undermining land market transparency and limiting community wealth building. Prior notification was seen as helping to address these issues, enabling community groups to engage more effectively with landowners and the land market.

Prior notification was also seen as a possible means of supporting positive relationships between landowners and the community, including by increasing opportunities for communities to negotiate with landowners where they have an interest in acquiring particular assets or areas of land. Land for housing was identified as being subject to particular pressure, and it was suggested that advance notification may help community bodies to be more competitive.

Some respondents felt that allowing communities to express interest in subdivisions of landholdings will be important in facilitating community ownership, and that a landowner’s decisions about selling land could be influenced by knowledge of any such community interest. In this context, it was suggested that community groups with an interest in acquiring the landholding should be given the opportunity to put forward ‘better use’ plans for consideration by the public interest test.

Respondents also referred to other examples of prior notification across the planning system, including in relation to crofting. It was suggested that extending this requirement to owners of large-scale landholdings would improve equity and consistency of approach.

Concerns about prior notification to sell

Those raising concerns about the proposal sometimes reiterated points made about the proposals for a public interest test on large-scale land transactions. For example, respondents raised concerns that prior notification could add further administrative burden, uncertainty and delays to land transactions. This was identified as a potential risk to capital investment and sale of large-scale landholdings. It was suggested that the focus should be on supporting rural economies and services, rather than seeking to break up large-scale landholdings.

Many of those raising concerns around prior notification highlighted the range of existing provisions to support community access to land ownership (such as the community right to buy, crofting right to buy and tenant farm pre-emptive right to buy) and it was argued that a need for additional provisions has not been demonstrated.

There were also questions about the likely take-up of any provisions, including because:

• The levels of increase in land values across many parts of Scotland may mean that few community groups are likely to have access to the funds required to participate in the land market.
• Many community organisations lack the organisational capacity, resources or expertise to engage effectively with the land market, such that there may be relatively few large-scale landholdings where a compliant community body is present.
• Relatively few community groups may be interested in the acquisition of large-scale land holdings – the limited take-up of existing opportunities for community land acquisition was cited as evidence of a potential lack of interest.

In the context of concerns around potential capacity for community land ownership, some respondents wished to see the proposals strengthened by expanding the range of eligible community organisations and/or giving community groups the right of first refusal. However, others felt that an additional mechanism to support community acquisition of large-scale landholdings would be unnecessary and disproportionate – particularly if proposals are likely to apply in a limited number of circumstances.

There was also a view that engagement with communities around significant land transactions, while good practice for landowners, should not be made a requirement. There was reference to LRRS protocols and the SLC’s Good Practice and it was suggested that the focus should be on improving existing mechanisms to support community land ownership before new provisions are introduced. For example, it was proposed that the Register of Community Interests in Land could be made available for public inspection.

Proposed amendments or alternative approaches

Reflecting some of the issues and concerns noted above, respondents suggested specific amendments or alternatives to prior notification. Several respondents wished to see proposals extended to a broader range of cases including smaller rural landholdings, and landholdings in urban areas. This reflected concern that limiting prior notification to rural landholdings of 3,000 hectares or more could undermine the policy intention, and that community access could still be limited for a large number of substantial land transactions under the threshold of 3,000 hectares. Calls for proposals to be extended to urban areas included several urban-based community organisations. These respondents referred to potential for prior notification to support community acquisition of land for affordable housing. It was also suggested that urban and peri-urban communities are in particular need of support in terms of access to housing and amenities.

There were also calls to expand the range of eligible community organisations to be notified. In addition to support for proposals to include community bodies with social/community benefit purposes, respondents also wished to include representative or intermediary bodies (such as Community Land Scotland and Development Trusts Association Scotland), environmental NGOs, and communities of interest (such as small farm membership organisations). Wide local advertisement of an intended sale was also proposed, reflecting a view that this could enable communities to form an appropriate body where a landholding may be of interest to them.

Other issues highlighted included that:

• Prior notification may also be useful for other types of large-scale land transaction, such as succession and other forms of transfer of ownership where a community organisation may wish to take ownership of a key asset or area of land.
• Prior notification should not cut across existing community right to buy legislation, with a suggestion that existing guidance could be updated to ensure the two provisions work in parallel.
• Landowners should be assisted, with access to expertise and support.

A number of queries were also raised including: whether prior notification would be limited to community bodies in the local area; how prior notification would sit alongside existing community right to buy; and whether the landowner would be prohibited from selling during the notice period for community bodies. There was also a request for confirmation that landowners cannot be compelled to sell.

Q25(b) Do you agree or disagree that there should be a notice period of 30 days for the community body or bodies to inform the landowner whether they are interested in purchasing the land?

Responses to Question 25(b) by respondent type are set out in Table 44 below.

Table 44 Question 25b) Do you agree or disagree that there should be a notice period of 30 days for the community body or bodies to inform the landowner whether they are interested in purchasing the land?

	Agree	Disagree	Don’t know	Total
Organisations:
Academic group or think tank	1	2	1	4
Community or local organisations	4	13	2	19
Government and NDPB	4	3	5	12
Landowner	7	19	4	30
Private sector organisations	4	5	3	12
Representative bodies, associations or unions	12	8	4	24
Third sector or campaign group	4	12	6	22
Total organisations	36	62	25	123
% of organisations	29%	50%	20%
Individuals	153	133	25	311
% of individuals	49%	43%	8%
All respondents	189	195	50	434
% of all respondents	44%	45%	12%

Percentages may not sum to 100% due to rounding

Respondents were relatively evenly divided on the proposed 30-day notice period, with 44% of those answering the question agreeing, 45% disagreeing and the remaining 12% not knowing.

Please give some reasons for your answer

Around 275 respondents made a comment at Question 25(b).

Comments in support of a 30-day notice period

Those expressing support for prior notification sometimes agreed with the need for a defined notice period to ensure community organisations have sufficient time to consider options and notify the landowner. It was noted that communities may wish to establish a new body or amend the governance of an existing body before noting an interest in acquiring a landholding. There was also support for a defined notice period to streamline the prior notification process and avoid unnecessary delays to land transactions.

In terms of the length of notice period, it was suggested that this may depend in part on the specific approach to notification. As noted earlier, some respondents expressed concern that the approach to notification must ensure that all community bodies are notified in a timely manner.

Concerns raised with respect to a 30-day notice period

Some of those objecting to the proposed 30-day notice period indicated that they were opposed to the principle of prior notification. These respondents were sometimes concerned that any prior notification process will introduce delays and uncertainty to the transaction process, and potentially undermine investment in landholdings.

Others raised more specific practical concerns around the proposed 30-day period. These were most commonly linked to a view that 30 days is not enough time for community organisations to make the necessary decisions, especially for groups that may meet less often or in areas where a suitable body is not yet in place. There was reference to SLC research suggesting that communities can struggle to respond within this kind of timescale, and it was noted that community organisations typically rely on volunteers, and may have limited capacity to mobilise in response to short-turnaround requests. While it was acknowledged that existing community right to buy legislation uses a 30-day notification period, respondents highlighted that this legislation applies only to compliant community bodies where there has already been sufficient support to register an interest in land.

Respondents also noted that a significant amount of work may be required before a community organisation is able to make such a decision. For example, it was suggested that this may require consideration of options, work to meet Scottish Land Fund requirements, consultation with members, engagement to establish community buy-in, and development of land-use proposals.

Some respondents cited specific concerns around previous examples of such deadlines being extended to suit community bodies, and wished to see a limit on how many times deadlines can be extended.

Alternatives and suggested amendments

A number of respondents suggested that the period over which community organisations can indicate their interest in purchasing land should be longer. Specific suggestions for the minimum period were typically in the range of 60 to 90 days, although some suggested longer periods of up to 6 months.

In contrast, a small number of respondents were of the view that 30 days should be the maximum period allowed, including some recommending a shorter period.

25(c) If the community body or bodies notifies the landowner that they wish to purchase the land during the notice period, then the community body or bodies should have 6 months to negotiate the terms of the purchase and secure funding. Do you agree or disagree with this proposal?

Responses to Question 25(c) by respondent type are set out in Table 45 below.

Table 45 Question 25(c) – If the community body or bodies notifies the landowner that they wish to purchase the land during the notice period, then the community body or bodies should have 6 months to negotiate the terms of the purchase and secure funding. Do you agree or disagree with this proposal?

	Agree	Disagree	Don’t know	Total
Organisations:
Academic group or think tank	1	2	1	4
Community or local organisations	5	12	2	19
Government and NDPB	4	4	4	12
Landowner	3	23	4	30
Private sector organisations	3	8	1	12
Representative bodies, associations or unions	6	15	3	24
Third sector or campaign group	7	10	4	21
Total organisations	29	74	19	122
% of organisations	24%	61%	16%
Individuals	156	118	35	309
% of individuals	50%	38%	11%
All respondents	185	192	54	431
% of all respondents	43%	45%	13%

Percentages may not sum to 100% due to rounding

Respondents were relatively evenly divided with respect to the proposed 6-month period to negotiate the purchase, with 43% of those answering the question agreeing and 45% disagreeing. The remaining 13% did not know. This balance of views is similar to that at Question 25(b) in relation to the proposed 30-day period for community organisations to indicate an intention to purchase.

Please give some reasons for your answer

Around 270 respondents provided a comment at Question 25(c).

Some respondents noted the need for a defined negotiation period, including to allow funds to be secured while avoiding unnecessary delays to the transaction, and a number suggested that 6 months offers a reasonable balance between the needs of communities and landowners.

However, many of those commenting raised concerns about the 6-month option, most commonly that it is unlikely to be sufficient time to complete a transaction. There were references to the potential complexity of the transaction process, and the due diligence likely to be required. In terms of specific activities, the time required to complete the tendering process, feasibility assessment, development of a business case, funding application(s) and negotiation of terms with the landowner were all highlighted. The voluntary nature of many community organisations was also noted, and it was suggested that their more limited resources are likely to limit capacity to respond to usual commercial timescales.

It was also proposed that experience across previous community land purchase should be considered when setting an appropriate negotiation period. This included reference to research highlighting the lengthy processes and timescales involved in community purchase, and to direct experience of community purchase having required a year or more to complete. It was suggested that community groups would require substantial, publicly-funded support in order to meet the 6-month timescale.

Respondents also noted that the proposals give community bodies less time than under existing community right to buy legislation, which allows a total of 8 months. Reference was also made to the timescales required to secure funding through the Scottish Land Fund, including a suggestion that many community bodies are unable to secure and spend even Stage 1 funding (technical support to develop a purchase proposal) within this 8-month period.

However, others raised concerns around potential for the proposed negotiation period to add excessive delay to land transactions, without any guarantee of sale. It was suggested that the proposed 6-month negotiation period is longer than most landowners would expect a landholding to remain on the market, and would give community bodies an unfair advantage over other potential buyers. Concerns were also raised around the potential implication for landowners if transactions are delayed, particularly where the sale is to prevent bankruptcy, to support necessary investment in other land, or to meet health or care costs.

It was suggested that, to minimise the risk of transactions failing, community bodies should be required to demonstrate their capacity to complete the land transaction at the initial notification of interest stage. Some also sought clarity on how landowners will be compensated if delays caused by community bodies exploring potential purchase result in financial loss, for example if land values change or the landowner incurs costs.

Alternatives and suggested amendments

Reflecting some of the concerns above, a number of respondents suggested a longer negotiation period, including that this period should be flexible dependent on the scale and complexity of the transaction. Specific suggestions for the minimum period required by community organisations were typically in the range of 9-12 months, although some respondents suggested that 12 months would be the minimum period required. Others were of the view that a period of up to 2 years may be more realistic for community purchase of larger landholdings.

Other respondents proposed a shorter negotiation period, for example of 3-4 months, although it was argued that there should be scope for this to be extended if the community body can demonstrate substantive progress.

Some also questioned the value of a stipulated negotiation period, if the seller is free to choose a preferred bidder. These respondents sought clarity on whether the proposed 6-month period would effectively form an exclusivity period for the community body and noted that giving community bodies first refusal of all large-scale landholdings would be a departure from current pre-emptive right to buy legislation.

Other amendments suggested by respondents included that:

• Negotiation timescales should be automatically extended if the community body has made sufficient progress within the 6-month period.
• Mediation may be required, for example if there is concern that the landowner may be delaying the process to avoid community purchase.
• The negotiation period for existing community right to buy provisions should be amended so as to be consistent with that set for these proposals.

Question 26 – Do you have any other comments on the proposal that landowners selling large-scale landholdings should give notice to community bodies that they intend to sell?

Around 185 respondents made a comment at Question 26.

Many of those commenting used the opportunity to reiterate some of the issues considered at earlier questions. This included support for, and opposition to, the role of prior notification in the context of wider land reform priorities, the potential capacity for community land purchase, and reference to practical considerations around the implementation of prior notification (such as flexibility in timescales and compensation for landowners in the event of any loss).

Other respondents commented on the purpose and scope of prior notification, with some questioning the evidence base. It was argued that research set out in the Rural Land Market Insights Report commissioned by the SLC^[10] did not consider long-term trends and was conducted at the height of the pandemic, in market conditions that may not be representative of wider market trends. Respondents also highlighted the potential for the evidence of ‘rapidly rising land values’ cited in the consultation paper to have been affected by purchase of land for carbon credits in 2019; it was suggested that this demand may fall back as a result of changes to eligibility for carbon credits and improved scientific data around the potential scale of carbon sequestration. More recent evidence^[11] was cited as suggesting that demand for carbon credits is unlikely to significantly influence land values going forward.

Some respondents wished to see the scope of prior notification expanded to include others who may face barriers to participating in the land market. It was suggested that including environmental NGOs, local businesses (especially those with an interest in using the land for public good), tenant farmers, individuals and others in the prior notification process could further support the diversification of land ownership. Some also wished to see the geographic scope of prior notification expanded to include wider communities of interest, particularly for landholdings where there are no suitable community groups in the local area.

It was noted that the consultation paper suggests circumstances where prior notification may not be possible, and some respondents expressed a view that the circumstances cited (sudden death or insolvency) should not merit exemption from prior notification. It was also suggested that there should be an exemption for landowners wishing to sell or gift land to registered charities where land is to be managed for the public good.

Other respondents made specific proposals for how prior notification should be implemented, including that the register of community bodies should be broader in scope than that currently used for registration of a community interest in land; it was argued that all incorporated bodies with a community membership, including all community councils should be included. It was also suggested that community bodies should be able to register without a change to their constitution, although that some changes may be required prior to any land transfer. Support should also be provided to help community bodies through the registration process.

Other points raised included that:

• Clarity is required around how the price to be paid by the community body should be determined, and whether landowners would be obliged to ‘favour’ any offer from a community group.
• Wider public dissemination of notices should be required in addition to direct communication with relevant community organisations.
• A standardised notification template should be developed, including details and a map of the landholding, a statement of community rights in relation to acquisition of land, timescales for a community response, and links to external support organisations.
• Community organisations will require additional support to engage in the land market including advice and guidance, case study examples, access to other community groups that manage land, and increased funding. This should be supported by a comprehensive communications strategy to ensure community bodies are aware of new rights, and the availability of information and support.
• Landowners should be required to provide evidence of effective notification or engagement with communities.
• A GIS-enabled open source database of notices could support transparency, monitoring and reporting.