Land Reform (Scotland) Bill: business and regulatory impact assessment

Summary and Recommendation

7.1.1 Land is one of Scotland’s most fundamental assets. It is essential to achieving sustainable development, and key to many other important aspects of people’s lives, from housing to recreation, from agriculture to mitigating climate change. The objectives of the Land Reform Bill 2024 were to further improve transparency of land ownership and management in Scotland, strengthen rights of communities in rural areas, increase opportunities for communities to purchase land when it comes up for sale and allow for Ministerial consideration of proposed transfers of large-scale landholdings.

7.1.2 To deliver on these objectives, this BRIA has considered the costs and benefits of different options for delivering on two broad proposals; to introduce a Land Management Plan for large-scale landholdings, and; to introduce a test on the transfer of land from large-scale landholdings.

7.1.3 Option 3 across these two broad proposals is the favoured and recommended option, a summary of costs and benefits to different groups is provided in Table 12 and Table 13:

Table 12: Summary of Benefits and Costs associated with implementing compulsory Land Management Plans (LMP)

Private Landowners

Benefits

• A tool to improve land management which creates stronger links between day-to-day land management activities and longer-term strategic objectives.
• A framework for regular reviewing or benchmarking of a landholdings performance.
• Improved communication of land use management to a wider audience (people in the local community, wider public and investors/developers).

Costs

• Costs associated with drafting a LMP, consultation and mapping requirements.
• Estimated to be an annual cost of between £1,300 and £4,300 per landholding or £2.2m - £7.3m per year in total across all private large-scale landholdings.
• Additional compliance costs if found to be in breach of new duty (up to £5,000 per breach).

Community bodies

Benefits

• Better access to information on land ownership.
• Improved identification of community purchase or partnership opportunities through participation in LMP consultation.
• Enhanced understanding and collaboration, between landowners and communities.
• Safeguarding of public access rights and opportunities for developing local-housing, small scale renewables etc.

Costs

• Minimal additional costs associated with participation in LMP consultations and any costs incurred due to reporting of a breach to the SLC.

Local Authorities

Benefits

• Local authorities may benefit from being able to formally influence the management of private land within their jurisdiction in line with wider local authority plans

Costs

• Costs will vary depending on rurality and size of the local authority.
• Costs associated with (voluntary) reporting any breaches of LMP duties and participating as an interested party in LMP consultations.
• Overall costs are discretionary and expected to be minimal

Public Bodies and Third Sector Landowners

Benefits

• Similar to benefits for private landowners, as set out above.

Costs

• Minimal costs associated with drafting a LMP for those that have a large-scale landholding. Most public bodies already using LMP framework

The Scottish Government

Benefits

• Meet the stated objectives of the Land Reform Bill through improving transparency of land ownership across the majority of Scotland’s rural land and strengthening rights of communities in rural areas.

Costs

• One-off and on-going resourcing and staffing costs associated with developing regulations to set out further details of the LMP duty
• Compliance costs in cases where Scottish Ministers own land that meet the criteria of a large-scale landholding.
• Additional costs for STCS associated with appeals and additional costs for SLC leading to funding pressure.

The Scottish Land Commission

Benefits

• Continue to provide advice to landowners to support the practical implementation of LRRS duties through a statutory LMP

Costs

• Cost of a new Commissioner and additional SLC staff costs arising from a need to potentially investigate breaches of the LMP duty.

Table 13: Summary of Benefits and Costs associated with adopting a Pre-Notification requirement and Transfer Test on large-scale landholdings

Private Landowners

Costs

• A potential delay in sales of land that are subject to either or both of the Tests. However, any costs incurred due to delays could be subject to compensation.
• A potential negative impact on land value prices, although evidence from other jurisdictions is mixed/inconclusive.

Community bodies

Benefits

• An expansion in the opportunities for communities to use existing Community Right to Buy mechanisms to buy land for community purposes to address negative consequences of concentrated land ownership.

Costs

• Additional costs for community bodies above those already in place under the CrtB process would be minimal.

Local Authorities

Benefits

• In the longer-term, pre-notification will increase community ownership, delivering wider benefits to communities (i.e. increasing housing supply). This could reduce pressures on local authorities.

Costs

• Minimal indirect costs on local authorities should the SLC make requests for information to support advice to Ministers with regards to a Transfer Test. Relatively few transactions in scope per year (5 – 15 across all of Scotland).

Public and Third Sector Landowners

Costs

• A potential delay in sales of land that are subject to either or both of the Tests.

The Scottish Government

Benefits

• Proposals help meet the stated objectives of the Land Reform Bill through increase opportunities for communities to purchase land when it comes up for sale and allow for Ministerial consideration of proposed transfers of large-scale landholdings.

Costs

• Resourcing costs associated with setting-up and running a pre-notification registration process for community bodies interested in being notified of proposed sales in their area.
• Compliance costs associated with Transfer Tests (i.e. determination of boundaries of lots and their valuation).
• Compensations costs associated with eligible costs borne by private landowners due to the impact of a any Transfer Test or Pre-Notification requirement.

The Scottish Land Commission

Costs

• Costs associated with new functions for a new SLC Commissioner to support the administration of the Transfer Test