The land of Scotland and the common good: report

Section 16 - Land and Community Development

1 There has been increasing awareness in Scotland over recent decades that the ownership of land and buildings by local communities is an important part of community development to create stronger and more resilient local communities.

2 The Review Group considers that policies to promote further community land ownership, should be informed by knowledge of the extent of existing community land ownership and an understanding of the main reasons why communities become involved in land ownership. The Group considers both these topics in this Section, before considering in the following Sections a range of measures that would directly support local communities to acquire land.

16.1 Extent of Community Land Ownership

Number of Communities

3 The ownership of property can be an important part of local community development. Most commonly this is the ownership of buildings, and the starting point for many communities is a meeting place. A recent Scottish Government study found, for example, that there are close to 3,000 village halls and other community facilities in rural Scotland, and that around 80% (2,400) of these are community owned. ^[1] Another survey found in contrast, that " the vast majority of community centres in urban locations tend to be owned by the local authority rather than the community organisations that may manage or use them". ^[2]

4 The distribution of village halls in rural Scotland remains a good indicator of the pattern of local communities. There is no map of these local communities at a more accurate level below the scale of the pattern of Scotland's Community Councils. This mapping might be anticipated to be relatively straightforward in most of rural Scotland, where there are usually clearer traditional boundaries than in areas affected by modern urban development. The Group considers that a clearer awareness of the pattern and number of local communities in rural areas would help inform public policies intended to support these communities.

5 The range of assets which communities now own has grown. Community controlled housing associations have extensive property portfolios. Communities now own land, often extensive tracts mainly in rural areas, but also woodland, parks and open spaces, heritage assets, and a range of buildings, for broad community use, including business workspaces. This growth in community owned assets is an indicator that Scotland's communities are becoming more empowered and therefore stronger, and this is discussed further below. The Review Group considers that it is important to know the 'extent' of community land ownership, in terms of numbers of buildings and hectares owned, but also how many local communities do or do not own property.

Amount of Property

6 The fullest assessment, to date, of the amount of property owned by local communities is Development Trusts Association Scotland's ( DTAS) Baseline Survey from 2012. ^[3] It covered both urban and rural areas, and estimated that there are 75,891 property assets owned by a total of 2,718 community controlled organisations. The overwhelming majority of these assets (73,151) were housing units owned by 84 community controlled housing associations. The Survey estimated the total amount of land owned by community controlled organisations as 463,006 acres (187,372 hectares), noting that " the vast majority of this area (95%) comprises 17 large rural estates under community ownership."

7 The DTAS study gives the lower overall total of 446,587 acres (180,800 ha) for the amount of rural land owned by community controlled organisations. This is similar to the total of 439,895 acres (178,095 ha) in the database maintained by Highlands and Islands Enterprise and which DTAS used as part of its study. HIE's map of community owned land based on its database is shown in Fig.14. Wightman gives a total of 419,874 acres (169,989 ha) for 19 community land owners with over 1,000 acres (405 hectares). ^[4] Community Land Scotland estimate the amount of land owned by its membership, which only includes some community land owners, as 406,476 acres (164,565 ha).

8 These figures all give a similar order of magnitude for the amount of community owned land. There is also a high degree of similarity in the three lists, DTAS, HIE and Wightman, for the 15 -20 largest community land owners with over 1,000 acres (405 hectares). However, in reviewing the lists, the Group found each list contained significant errors and that there were some differences between them in what counted as community ownership. This is not a criticism of those putting the lists together, but a reflection of the limitations to the quality of information available.

9 The Review Group considers that much better data on community land ownership is needed to inform public policies intended to support and develop this sector. This is particularly the case at the level of small scale ownership, when the acquisition of very small areas of land can be so important to many communities.

10 The fact that the existing totals for what is broadly described as community land ownership are approaching 450,000 acres, has led to the current figure being rounded up to 500,000 or half a million acres (202,429 ha). ^[5] The announcement by the First Minister in June 2013 that the Scottish Government's target for community land ownership is 1 million acres by 2020, provides a clear policy context to addressing the need for better information.

Fig. 14 Community Land Ownership in the Highlands and Islands Enterprise Area

Types of Owners

11 An important part of improved information on community land ownership should be recognition that not only is there a wide range of types of community owned property, but there are a number of different types of community land owners. The Review Group has highlighted the core status of an 'appropriate community body,' or as it is labelled here, Local Community Trust ( LCT). This is the 'fullest' or most genuine form of local community land ownership. However, the Group considers that other forms of local ownership should be included, as was done in the DTAS study of Community Ownership in Scotland.6

12 The DTAS study defined community land ownership as property where the title is held by a community controlled organisation. The study's definition of these organisations, which is quoted below, is the same as the definition of an appropriate community body or LCT, except for the last half dozen words (emphasis added):

" Community controlled organisation: an organisation that is not-for-private-profit, has a defined geographical area of operation (typically at the level of village, neighbourhood, town or similar), is accountable to those who live within that area, and is democratically run. The majority of people who serve on its management committee or Board must live within the organisation's area of operation and be elected or appointed through a transparent process open to all who live within that area. Such organisations may exist to serve the interests of the whole community of place or specific communities of interest within this". ^[7]

13 Examples of property ownership by 'specific communities of interest' within local communities are, in the urban context, Scotland's locally controlled Housing Associations, and in the rural areas, crofting trusts. ^[8] As described in Section 15 some 'appropriate community bodies' can have legal structures which combine broad community benefit with communities of interest and this flexibility is important. Different types of community ownership can be dictated by the different legislation which governs those sectors, and this can lead to a range of legal entities including limited companies, SCIOs, Industrial and Provident Societies, Community Interest Companies, Community Benefit Societies and others.

14 Clear information on community land ownership should be based on a breakdown by category, starting with LCTs and their trading companies and including local community associations, housing associations, community energy companies and others that conform to the DTAS definition above. Improved information should help inform public policies to support the continuing development of 'specific interest community land ownership', as part of promoting more robust resilient communities. ^[9]

15 The Review Group recognises that there is now a wide range of types of property owned by communities and also types of community owners. Given the target of one million acres in community ownership by 2020, set by the First Minister, the Group recommends that the Scottish Government sets up a short life working group whose task would be to improve existing information on the numbers and types of community land owners and the land that they own, and to develop a strategy for achieving this target.

Trust Ports

16 Another particular case of 'community ownership' considered by the Review Group was Trust Ports. Scotland currently has 35 Trust Ports as shown in Fig.15. Each is an independent statutory harbour authority, governed by its own local legislation and run by independent local boards who manage the assets of the Trust for the benefit of stakeholders.

17 A key point here is that Trust Ports are both locally controlled and have to re-invest any profits in the port. The Scottish Government's 'Modernising Trust Ports - A Guide to Good Governance' describes a trust port as " a valuable asset presently safeguarded by the existing board, whose duty it is to hand it on in the same or better condition to succeeding generations. This remains the ultimate responsibility of the board, and future generations remain the ultimate stakeholder". ^[10]

18 Scotland has around 375 harbours. Most are local authority or other public sector harbours (over 70%), with the rest either Trust Ports (9%) or private sector (20%). ^[11] The vast majority of all traffic in or out of Scotland's harbours (95% or more), whether goods or people, is handled by around a dozen main harbours. These include several of the largest Trust Ports with multi-million pound turn-overs - Aberdeen, Peterhead, Cromarty Firth and Lerwick. More than half a dozen other Trust Ports have turn-overs of £1m or more, while around half of all Trust Ports are what might be considered significant local businesses and many others are also important locally. ^[12]

19 Most Trust Ports have long histories dating back to Crown grants, before these were replaced by statutory harbour regulation in the 19th century. In 2000, following devolution, the Scottish Government published guidance for modernising the governance of Trust Ports to include the composition of their Boards, including a mix of local elected members and representatives of user groups. All the larger Trust Ports have been through this modernisation process, with the changes implemented through individual Harbour Empowerment Orders under the Harbours Act 1964. The process is continuing to spread down the list of smaller scale Trust Ports.

20 The Review Group considers that Trust Ports are an important and distinctive form of locally based social land ownership in Scotland. Trust Ports can be found in larger population centres such as Aberdeen, but many are part of very small communities. After a long history of decline in the number of Trust Ports in Scotland, the trend is starting to reverse due to local community initiatives. In the 20th century, many harbours were taken over by the local authority. Now revived or new Trust Ports may be formed to take over this management, as is happening in for example, Dunbar, North Berwick and Tobermory in Mull. ^{[13] [14]}

Fig. 15 Scotland's Trust Ports

21 Scotland has many coastal communities and local harbours, piers, slip ways and moorings can be of key importance to those communities. Local community control of these types of assets is an important form of community land ownership that should be encouraged and supported, especially when opportunities are arising in new and existing economic sectors, such as marine renewable energy, marine tourism, inshore fishing and developments in marine transport. While becoming a Trust Port is one type of organisational structure, there are others. For example, the Review Group understands that Storas Uibhist is planning to become the harbour authority at Lochboisdale in its current form as a company limited by guarantee, as is the case with private sector harbours.

22 In considering Trust Ports as an important form of local ownership and control, the Review Group also noted the comment from 2006 that Trust Ports had been neglected " in comparison to the (Scottish) Executive's positive policies to support other social enterprises and more community control in different contexts, including the Community Right to Buy ( CRtB) and National Forest Land Scheme ( NFLS)". ^[15] While the Group did not explore this further, there would seem to be scope for initiatives of this type to support Trust Ports, for example, over the acquisition of foreshore that is not in their ownership but within their immediate harbour areas.

23 The Review Group considers that Trust Ports and other forms of local community control over harbours, piers, slipways and similar coastal assets should be encouraged as a form of community land ownership. The Group recommends that the Scottish Government should develop specific initiatives to assist this process.

16.2 Communities and Land Ownership

24 There are many ways that local communities can be involved in managing buildings and land, which do not amount to ownership. These types of arrangements can be at different levels of legal formality, for example, from simple permission to use a property, to some form of management agreement or to a registered lease. While such arrangements might be the community acting by itself, they can also involve the community being in some form of partnership with another party, for example, the owner of the land.

25 One of these arrangements, other than ownership, might be the only opportunity available to a community in some situations. There can also be many circumstances where a community might consider one of these arrangements, best suited to its purposes (see Section 17). This can include local communities that already own buildings and land, deciding to lease other property as the most appropriate arrangement in that instance. These types of arrangement can therefore be a significant part of local community involvement with land (see Annex 1). However, whereas several submissions received in response to our Call for Evidence offered this as a potential alternative way forward, others indicated the importance of the ownership of property because of the benefits to local communities from the greater security and control that ownership gives. Our focus is therefore on community ownership.

26 The history of local communities in Scotland democratically owning property on their own behalves has been relatively short, with the examples that exist having largely developed in the last 30 years. As reported above, the most common property owned by local communities is village halls or community facilities. Most village halls in rural areas were traditionally owned by a local estate. These have progressively become owned by the communities themselves, and, given the importance of village halls as a key basic component of local community development, this has been a very significant change in some areas.

27 The Group acknowledges that in terms of 'property', as opposed to land, community controlled housing associations, predominantly located in urban locations, are significant community owners. It is acknowledged also, that while these may be defined as communities of interest, these organisations in more recent years have taken on wider roles as anchor organisations involved in local community regeneration. The emphasis in this section, however, is more specifically on land per se.

28 The conspicuous growth in local community ownership of land has been, however, the 'estate buyouts' in the North and West Highlands and Islands in 1990s and since. These account for the overwhelming majority of all land in local community ownership in Scotland. The very positive record of these new community land owners, and the transformative effect of the buyouts on the fortunes of the communities involved, has been well documented. ^[16] The Outer Hebrides, with its longstanding example of the Stornoway Trust, also demonstrates a historic change at a wider scale. There are now 120,961 ha of community owned land in the Western Isles, representing 42% of the total land area, and, in large part due to the influence of Stornoway, two thirds of the population now live on community owned land. ^[17] There is also the prospect of further sales of significant estates by private owners to the local community. ^[18] The Scottish Government also owns over 15,000 ha in crofting estates in the Outer Hebrides.

29 It can be argued that community acquisition and management of land in the North and West of Scotland can be linked to generally lower land values there, the influence of the settlement patterns under crofting tenure, and the nature of social capital found in remoter and island locations. One of the many wider benefits of these estate buyouts has been the demonstration of the capacity of local communities to manage large scale areas of land. The Review Group considers, however, that whole estate buyouts by local communities in the south and east of Scotland are less likely. It is more probable that local communities in these areas will acquire buildings and land through a number of different purchases over time, for a range of purposes and at different locations spread across the area covered by the community.

30 The reasons why individual local communities might decide to become involved with owning land are many and varied. There are three main triggers:

• Response to a threat or a crisis. This may result from a landowner suddenly getting into financial difficulties or going bankrupt. Some of the early Highlands and Islands buyouts were from companies that were in administration or receivership e.g. Assynt, Eigg, Knoydart. Similarly the closure of a local school or shop can trigger a community into seeking to acquire buildings in order to sustain local services
• Identification of opportunity. The availability of land and buildings for sale can encourage communities to consider what new opportunities could be exploited for local community or wider public benefit, in terms of income generation, service provision, diversified land use, employment creation or enhancement of amenities. The ability to exploit such opportunities can come from using the current rights offered by the Land Reform (Scotland) Act 2003, or from amicable purchases of land from willing sellers
• Proactive transfers of land. This can be both public land, owned by the Scottish Government, its agencies or local authorities, and occasionally private land, where owners offer land to communities ^[19]

31 As a result of these triggers, a rural community with a well developed pattern of community ownership might own the following:

• The village hall or some other community facility as the hub of the community and possibly other types of facilities that are key to the operation of the community as a community which might create or preserve a valuable local service
• Buildings and particular areas of land that the local community considers important to its identity because of their local significance
• Buildings and land that make a particular contribution to the well-being and amenity of the community
• Buildings and land, sometimes of an extensive area, with economic potential that enable the community to generate an income

32 The above typology can apply in both urban and rural contexts. Experience to date indicates that there can be a cumulative effect in community ownership, inasmuch as the acquisition of one asset can lead to growth in organisational capacity to identify further opportunities and the means of capitalising on them. Fundamental to this is ownership of property with economic potential, crucial to the financial viability and future development of local communities acting on their own behalf.

33 Local communities need to develop an asset base to generate income as part of their land ownership. This is to cover the costs of operating overheads and managing properties that are important to the community for other reasons; to finance the more general expenses involved as a community body in promoting and maintaining community engagement; and to invest in new social and economic activity. The Review Group sees developing financial resilience as essential in promoting stronger and more robust communities. This is reflected in one of the five key principles of community empowerment identified by the Scottish Community Alliance. The principle states that " Ownership of land and control over land use, and the capacity to generate income streams which are independent of the state, are critical in determining the degree to which a community becomes empowered". ^[20]

34 The development of renewable energy, in the form of wind turbines, biomass boilers or hydropower schemes owned by local communities themselves or in a partnership, has become a prominent source of revenue for some communities. At least five of the major community buyouts already operate renewable schemes and a further two are in the advanced stages of feasibility work. ^[21] There has also been a growth in commercial forestry as an income source, as woods and forests are particularly suitable for community ownership. They are a renewable commercial resource that can be developed in most parts of rural Scotland, in comparison to the more limited scope for commercial renewable energy schemes. The multipurpose character of woods and forests and the nature of their management are also suited to local management by communities. In addition, while a forest of adequate size can generate a sustainable income, it can also act as a bank because there is some flexibility to adjust harvesting if a particular financial need arises in a community.

35 However, at present, most local communities do not own land beyond, possibly, a village hall or similar community facility, and few local communities own a commercial renewable energy scheme or significant area of commercial forestry. Existing local community land ownership is also very unevenly distributed in Scotland. Two thirds of the instances of community land ownership are in 'remote rural areas' with around 6.5% of Scotland's population. ^[22] In comparison, only 5% of local community owned land is in large urban areas where nearly 40% of the population lives. Most local community property is also in the least deprived areas as measured by the Scottish Index of Multiple Deprivation, with 3% of community owned assets in the 5% most deprived areas. ^[23]

36 The Review Group recognises that there has been a very significant growth of community land ownership over the last 25 years and that its uneven distribution can be explained by many factors, including land values and community capacity. There is also now widespread support for the principle of encouraging more local community land ownership, including statements of support for this principle from Scottish Ministers. Despite this, many submissions to the Group voiced concern about an apparent loss of momentum over the last few years in the rate of growth of local community land ownership. This is reflected in Fig.16, showing the number of local community asset acquisitions between 1991 and 2011 (though it is acknowledged that the data in the graph are incomplete and community acquisitions are continuing).

37 The Review Group recognises that, while there is some legislation in place, a funding programme established, and now a Government target for further community land ownership in Scotland, a range of unnecessary difficulties that local communities face in trying to acquire property have to be addressed. In addition to the removal of obstacles, a coherent and effective support structure needs to be provided.

38 The Review Group recognises that significant progress has been made in the growth of community owned land. The Group recommends that the Scottish Government, using the evidence and recommendations for change presented in this report, should develop a policy statement, with clear direction to all parts of Government and its agencies, on the objective of diversified land ownership in Scotland, and a strategic framework to promote the continued growth of local community land ownership.