The land of Scotland and the common good: report

Section 14 - Common Good Lands

1 A special type of property owned by local authorities in Scotland, which is legally distinct from all the other property which they own, is Common Good Funds. These Funds are of ancient origin and consist of property that previously belonged to one of Scotland's burghs. They include both moveable property (for example, cash, securities, civic regalia) and heritable property (land and buildings). By far the largest component of Common Good Funds is heritable property and while this mainly consists of public buildings and public spaces, such as parks, it also includes in some cases farm land and other heritable property, such as salmon fishings. ^[1]

2 The ownership of these Common Good Funds has undergone a series of changes as a result of local government reforms in Scotland since the Second World War. Common Good Funds were owned by 196 burghs at the time of the Local Government (Scotland) Act 1947, when the burghs became managed by Town Councils. ^[2] Subsequently, when the Local Government (Scotland) Act 1973 abolished Scotland's Town Councils, legal title to Common Good Funds was transferred to the new District Councils and then, in 1996, to Scotland's current local authorities under the Local Government (Scotland) Act 1993. As shown in Fig.13, the combined value of the Common Good Funds was considered to be over £300 million in 2012.

3 This combined value is less than 1% of the value of the property assets owned by Scotland's Councils, which was reported to be £35 billion in 2011. ^[3] However, the long history of Common Good lands, the locations and character of the properties and their local importance make them, as the Scottish Government has commented, " an important part of the community landscape in many places". ^[4] However, as is also very clear, the legal framework governing Common Good Funds as a very distinctive component of Scotland's system of land ownership, is archaic and not fit for purpose.

4 The origins of these Common Good Funds go back to the establishment of Scotland's Royal Burghs in the 11th century. Royal charters by the Crown granted these burghs special rights and privileges, as well as tracts of land which typically extended for some distance around the medieval town. Then, in the 15th century in response to maladministration, the Scottish Parliament passed the Common Good Act 1491. This Act which remains in force today, stipulated that the common good of the Royal Burghs "be observed and kept for the common good of the town". ^[5]

5 Despite that legislation, much Common Good land was lost by Scotland's burghs between then and the 1830s. Reforms at that time meant the burghs began to expand and some of the land owners who sold land to the growing towns, gifted land to the Common Good for parks and other public purposes. While there has been little research on the fate of Common Good lands between then and local government reform in the 1970s, " what is clear from even a cursory examination of the evidence is that the depredations did continue". ^[6] The major re-structuring of local government in 1975, poor record keeping and the further re-organisation in 1996, have all added to the uncertainty over the full extent of the properties that are part of the Common Good, and the loss of some because they were not recognised as such.

6 In recent years, a number of factors have focused more attention on the need to improve the position over Common Good Funds, including a report on "The Common Good Lands of Scotland" in 2005 and a book on Common Good Law in 2006. ^{[7] [8]} However, while there has been some improvement in the administration of these, " many Councils are still to complete audits of assets". ^[9] The increase in value of Common Good Funds between 2005 and 2012 shown in Fig.13 is considered to be " due principally to better and more comprehensive asset registers. However, out of the 197 Town Councils wound up in 1975, there are still 54 burghs for which no assets are reported". ^[10]

Common Good Registers and Accounts

7 The need to improve the records of Common Good Fund property held by local authorities is reflected in proposals in the current Community Empowerment Bill to improve transparency over Common Good Funds by placing two statutory duties on local authorities. ^[11] The first would require them to establish and maintain Common Good property registers, and the second would require them to consult Community Councils and others over any planned disposals.

8 The Review Group considers that creating a duty to have a Common Good Fund Register would be a positive development. However, this does not lessen the challenges that can be involved in identifying properties that should be on the registers. The conventional legal description of these properties is that " all property of a royal burgh or a burgh barony not acquired under statutory powers or held under special trusts forms part of the common good". ^[12] However, this does not directly help determine the properties involved when there are inadequate records. The identification of these properties can only be done definitively with reference to case law by a court, except where land has clearly been acquired with money from the Common Good Fund.

9 There is no statutory definition of Common Good property and the Scottish Government considers that it may be unhelpful to try to create one at this stage. The risk is that such a definition could inadvertently result in the loss of some Common Good lands. However, there could also be merit in basing a definition on the extensive existing case law as part of clarifying the position. The Group envisages that, in time, the definition of Common Good property will become those properties on the proposed Common Good registers. The Group considers that these registers should be kept open once they are established, until it can be safely judged at some future stage that no further Common Good properties are likely to be identified through due process. The process of establishing these registers should not become the latest episode in the loss of Common Good property, by setting a pre-mature cut off for recording historic Common Good property. The contents of the Registers will, in any event, evolve with any disposals and acquisitions, and 'recovered' properties should be part of that.

10 While the Community Empowerment Bill proposals give little detail about the registers, the Review Group would expect each local authority's register to be structured to list the properties under the burghs from which they derived, while also recording any properties that may have come from other sources. The Group also considers that the establishment of the registers should be linked to a programme requiring the progressive recording of Common Good properties in the Land Register. This could be rolled out through a schedule that started with the local authorities with least Common Good property, to allow most time for the local authorities with most to carry out the necessary work to enable registration.

11 The Review Group also considers that, in addition to registers, some further attention should be given to local authority accounts for their Common Good Funds. It has been accepted since local government re-organisation in 1975 that financial accounting for Common Good Funds should be carried out separately from the Councils' main accounts. Improvements have also followed the guidance issued in 2007 by the Local Authority Scotland Accounts Advisory Committee. ^[13] However, the Group considers that, while some Councils still account for all the Common Good Funds in their area under one accounting head, each of their Common Good Funds should be recorded separately. The Group understands that there are also variations in the accounting conventions applied by the Councils to Common Good Funds, that make comparisons difficult. The Group also notes that two Councils have also registered the Funds under their control as a charity with the Office of the Scottish Charity Regulator. ^[14] The Group questions whether this is an appropriate approach.

Disposals and Appropriation

12 Measures to establish the identity of Common Good property more clearly are only part of the reforms required, as the legal framework governing the management of Common Good property is complex and unclear. This is particularly the case with the rules governing the terms under which Councils are allowed to sell, lease or change the use of Common Good land. Disputes about these are the most common source of litigation involving Common Good Funds, as illustrated by the current issues over the future use of Portobello Park in Edinburgh. ^[15]

13 Common Good property, which is recognised as being held inalienably, is described as deriving from three sources. These are the original grant, a decision of the Town Council itself or that the land had been used and enjoyed by the public since time immemorial. ^[16] The ability of a local authority to dispose of any Common Good properties in whole or part is unclear, though the Local Government (Scotland) Act 1973 enables this to be done for certain types of common good in certain circumstances by reference to the courts. However, that Act is silent on whether or how a Council could change or 'appropriate' the use of Common Good land to serve a different public purpose. As the Law Society of Scotland observed in relation to the Portobello case, " the determination that there is currently no mechanism whatsoever for the appropriation by an authority of inalienable property for a necessary public purpose, is one which should certainly benefit from national debate". ^[17] As a result of the difficulties, Edinburgh City Council has introduced a Private Bill into the Scottish Parliament seeking to be allowed to change the use of Portobello Park as Common Good land from a park to the site of a new school. This is not the first Private Bill involving Common Good land that the Parliament has had to consider since 1999. ^[18]

14 While the restrictive conditions on the disposal or change of use of Common Good Fund property were intended to protect them for corrupt management in previous centuries, they are now considered no longer fit for purpose. Even in situations where everyone is agreed, the law or lack of it can still place obstacles in the way of making progress. Most respondents to the Scottish Government consultation on proposals for its Community Empowerment and Renewal Bill agreed that the current rules act as a barrier to the effective use of Common Good assets by both local authorities and communities. ^[19] Despite this, the Scottish Government has not brought forward measures to address this in the current draft Bill.

15 The Review Group considers that the Scottish Government's proposed Common Good Fund registers should be only one of a series of measures to bring about more major reforms as part of improving Scotland's system of Common Good Funds. The Group consider that a new statutory framework should be developed to modernise Common Good law, which currently relies on the interpretation of a long history of case law. The Group considers that a modernised statutory framework could be enacted through a new Common Good Act to replace the current Act from 1419.

Beneficiaries

16 Central to the modernisation of Common Good Funds is re-establishing a more direct link between Common Good land and the local communities where that land occurs.

17 Common Good case law makes reference to the fact that local government Councillors have a fiduciary duty to burgh inhabitants and that in holding title to Common Good land as part of that, they have similar responsibilities to that of Trustees. As Lord Drummond Young observed in a Court of Session appeal case in 2003, " It (common good property) was thus the ordinary property of a burgh, held for the general purposes of the community. It is owned by the community, and the town council or other local authority is regarded in law as simply the manager of the property, as representing the community". However, under the current legislation, local authorities only have a legal duty to " have regard to the interests of the inhabitants to which the common good related" prior to the 1975 local government re-organisation. ^[20]

18 This duty does require Councils to consider the interests of the inhabitants in each area from which the Common Good property they manage originated. However, the duty gives Councils considerable discretion as to how they fulfil this duty and the standards of direct engagement with the local communities involved is typically very limited. The proposals in the current Community Empowerment Bill would require Councils " to have regard to guidance issued by Scottish Ministers in relation to the management and use of property that forms part of the common good". ^[21] This provision, if enacted, could be used to help improve the standard and consistency of engagement with the local communities within the existing legal framework. This could include such matters as the provision of adequate accounts, involvement in management decisions and direct benefit from any net income generated by the Common Good land in their area.

19 The Review Group considers that such measures should be the first steps in re-establishing the direct link between the Common Good lands and these local communities. There is scope for legislation to be developed that could give these communities rights to take over the management of the Common Good land in their area and indeed, to re-gain local ownership of it. However, an early requirement in improving the position over Common Good land is to identify who those 'local communities' are. This may not be straightforward in many situations. It might be noted that, while the administrative functions of the Town Councils responsible for the burghs were abolished in 1975, Scotland's Royal Burghs still exist as legal entities and the boundaries of all burghs can be clearly mapped. However, in many situations, the 'inhabitants' living within those boundaries might no longer be considered to be the community due to the urban renewal and expansion since the boundaries were last defined historically.

20 The Review Group considers that Common Good land should be recognised more clearly as one of Scotland's oldest and most enduring forms of community land ownership, and something which plays an important part in the historic, cultural and economic heritage of Scotland's towns and cities. A reformed system of Common Good Funds would safeguard that heritage, while enabling Common Good lands to play a more progressive role in the public interest in urban areas and as part of that, become a valuable part of revitalising community land ownership in urban Scotland. A modern statutory framework would clarify the status of Common Good land as a distinct form of land tenure. This could open up the scope for it to become used by local communities outwith the 197 former burghs, where communities hold particular types of property as Common Good lands to protect them from disposal.

21 The Review Group considers that the position over Common Good lands should be improved to ensure they are adequately safeguarded and appropriately managed. The Group recommends that a new statutory framework should be developed to modernise the arrangements governing Common Good property.