Overview of Evidence on Land Reform in Scotland

3. Community Right to Buy

General Overview

3.1 Part 2 of the Land Reform (Scotland) Act 2003 introduced the Community Right to Buy (CRtB) as a mechanism for encouraging opportunities for community ownership of land in rural Scotland. The CRtB provisions provide the opportunity for community bodies representing rural areas in Scotland with less than 10,000 head of population to register an interest in and buy that registered land once it is offered for sale. It provides Community Bodies with a pre-emptive right to buy land in which they have registered a community interest. The right to buy requires a willing seller: it does not involve a compulsory purchase of land registered under the Act. A registered interest lasts for 5 years unless a Community Body informs Ministers that it should be deleted, it refuses the opportunity to exercise its right to buy or there have been changes which would lead Ministers to delete the registration. Community Bodies have the option to renew a current registration for a further period of 5 years. Communities in 469 of the 525 settlements in Scotland are able to apply to register a community interest in land, amounting to 89.3% of all settlements, though only 30.7% of the total Scottish population.

3.2 Community ownership is generally viewed as a way to encourage local development, by promoting self-determination and empowerment as a means to release economic and social entrepreneurial potential. The Land Reform (Scotland) Bill Policy Memorandum (2001) states that its objective is 'to remove land-based barriers to the sustainable development of rural communities' (Scottish Parliament, 2001). In order to achieve this, the Land Reform Policy Group (1998) considered that there needed to be:

• Increased diversity in the way land is owned and used; in other words, more variety in ownership and management arrangements (private, public, partnership, community, not-for-profit) which will decrease the concentration of ownership and management in a limited number of hands, particularly at a local level, as the best way of encouraging sustainable and rural development; and
• Increased community involvement in the way land is owned and used, so that local people are not excluded from decisions which affect their lives and the lives of their communities.

3.3 The Land Reform (Scotland) Bill recognised that not all communities would wish to chose community ownership as a means of securing community involvement in land. It considered that it was likely that some would prefer to pursue some other form of community involvement short of outright ownership (e.g. long lease, working agreement with landowner etc). Nevertheless, it was thought to be important that communities should have the choice.

3.4 However, research highlights that not all communities are equally well placed to achieve the full benefits of land and asset ownership. In addition, without the right conditions in place, ownership can bring with it more risks than benefits (Aiken et al, JRF, 2011; Skerratt, 2011). These can include financial, legal, social, and environmental issues, which impact on the ability of the land or asset to achieve its full potential in terms of community empowerment. It is therefore important that mechanisms are available to prevent purchases becoming liabilities. Some communities may benefit from training, guidance and support to help them make the most of their land or asset purchases (Aiken et al; JRF, 2011; Skerratt, 2011).

Uptake

3.5 Uptake can be analysed according to the different opportunities that are available in the provisions: the number of communities setting up a community company (or Community Body) under the Act; the number of community companies or company bodies registering a community interest in land; the number of community bodies given the opportunity to proceed with the right to buy when the land comes up for sale and the number that have successfully purchased that registered land. This information is reported in Table 3.1 below.

Table 3.1 Table outlining the uptake of CRtB provisions from June 2004 - including progress made since May 2007

	Total*	Since May 2007
No. community bodies formed under the Act	176	104
No. community bodies formed under the Act, specifically for the purpose of registering a community interest in land	146	77
No. applications to register a community interest in land	142	69
No. applications where the right to buy has been triggered	33	20
No. applications where land acquisition has been successful	11	5

*Provisions came into force on 14 June 2004

3.6 A total of 176 community bodies have been formed under the provisions. These include some 30 companies that were previously constituted, but did not comply with the provisions. Generally, where there has been an existing company in operation, communities have found it easier to form a new company for the purposes of the Act which has given them increased transparency and a robust constitution which has enabled their community to have increased confidence in them (Scottish Government, May 2012). A further 146 were set up specifically under the Act, for the purpose of being able to register a community interest in land. However, while they may have had that intention, not all of them have submitted applications, with some 77 having done so. Some 18 community bodies have dissolved (Scottish Government, May 2012).

3.7 A total of 142 applications to register a community interest in land have been submitted to Scottish Ministers. Overall, 95 (67%) of these applications have been approved by Scottish Ministers, the rest having been rejected by Ministers (n=32, 23%) or withdrawn by community bodies (n=14, 10%), with one pending approval. Of the 95 approved applications, 33 have had the chance to go ahead and purchase land (their 'right to buy'). Of these 33 applications, some three are currently in the process of going through the right to buy process. There are therefore 59 applications where the community body is currently waiting on the land coming on the market. Land and assets have been purchased in 11 applications, submitted by 9 community bodies (Scottish Government, May 2012). Table 1 in the Annex provides a breakdown of the number of applications for each calendar year from June 14 2004 until 1 May 2012.

3.8 The extent of uptake is significantly higher than that assumed by the Land Reform (Scotland) Bill, which predicted 25 applications to register interest in the first year followed by five a year thereafter, and two community purchases each year^[1]. The figures show that there is a significant difference in the number of communities forming a community company and the number of communities that have purchased land.

3.9 Statistics show an increase in activity relating to Community Right to Buy since May 2007, particularly in terms of the forming of community bodies under the Act (Table 3.1). However, they also show the continuation of a reasonably high drop-out rate between the registering of an initial community interest in land and the final purchase of it, which may be worth exploring.

3.10 Figure 3.1 below provides a geographical breakdown of all the communities that have submitted an application to register a community interest in land throughout Scotland. It shows that the geographical distribution of registered interests in land is by no means uniform, with significant activity in some counties and limited or no activity in others. They also show little distinction between Highland and Lowland areas. This widespread distribution of registrations is particularly important as it shows that the Lowlands is an important area for the community ownership of land and suggests that community ownership of land is not only associated with Highland and Island communities.

Figure 3.1 Geographical distribution of applications to register an interest in land

3.11 It was a policy intention of the legislation that communities should submit applications before steps were taken to market the land, so that they had time to properly prepare for land ownership - these are known as timeous applications. Late applications were (and still are) to be submitted in only exceptional circumstances. The number of timeous applications was lowest in 2004-2005 (when only 20% (n=4) of applications were timeous), but grew to reach a figure of 100% (n=13) by 2008-2009. In 2009-2010, however, it experienced a steep decline (when just 50% (n=4) of applications were submitted as timeous applications)^[2], but the situation seems to have recovered in 2010-2011 when some 75% (n=12) applications were timeous (Scottish Government, May 2012). Details of all these applications are recorded in Table 2 in the Annex.

3.12 Communities have registered an interest in a wide range of areas of land, from small parcels to large estates, but the emphasis has been on smaller units of land, often constituting specific facilities and/or buildings rather than larger estates. Details of the exact area of land purchased by each community body is recorded in Table 3 in the Annex, and details of the area of land where communities are currently proceeding with their Community right to Buy are in Table 4 in the Annex.

3.13 There have been 14 instances where a community body has received Ministerial approval for their RtB but have so far failed to make a purchase. The most common reasons for this was that they could not raise the necessary funds (9 instances) or that the landowner decided to withdraw their land from the market (4 instances). Further details are recorded in Table 5 in the Annex.

3.14 While there has been a high success rate for the Ministerial approval of applications to register a community interest in land (n=95), there have been cases where Ministers have rejected applications (n=32; 34%). Applications have been rejected for a number of reasons, including that the applicant has provided incomplete information, or that their application was deemed not to be in the public interest (Ministers have discretion on what constitutes public interest). Further details on the specific reasons given for rejecting CRtB applications at the registration stage are in Table 6 in the Annex. Community Bodies have also withdrawn their applications before Ministers could consider them. Further details of these are in Table 7 in the Annex.

3.15 There have been very few instances where Ministers have rejected / extinguished a communities' RtB application when the community body has sought Ministerial consent to proceed with its purchase of the land. Only three have been documented for 2005-2010. Full details of these cases are recorded in Table 8 in the Annex.

Using the CRtB: user experiences and impacts

3.16 The research into user experiences and impacts has largely focused on the views of the community bodies and their related stakeholders. MacLeod et al (2010), for example, focused on the experience of community groups, and took no account of the landowners, an important player in the CRtB process, who also have their own needs and rights within the legislation. His study, which combined a literature review on the implementation of the Land Reform (Scotland) Act with primary research involving electronically-administered surveys and semi-structured interviews with stakeholders, nevertheless, provides one of the most detailed analysis available on these aspects. Further information is also available from an analysis of the cases on the Register of Community Interests in Land (RCIL).

3.17 Community groups have approached the CRtB provisions with flexibility. This is noted in a number of ways through many aspects of the legislation, including the formation of their community companies (as noted, 30 of the 176 companies that have been formed were existing companies that updated their M&A to be compliant with the Act), their definition of 'community', the relationship between their 'community' and the land in which a community interest is to be registered, whether it is located within their community or is land lying near to it. The smallest community has had 13 persons (Knockman, Kirkcudbrightshire), while the largest has 6,844 persons (Dunblane, Perthshire). The majority of the communities have fewer than 5,000 persons. They have included a group of houses to villages, community council areas, islands and the southern half of a land peninsula area.

3.18 Some community bodies have formed their companies over a short period of time, while for others this had been a longer process. The time between them receiving their Section 34(4) letter, which states that the main purpose of the community body is consistent with furthering the achievement of sustainable development and submitting an application to register an interest in land has been highly variable, but in most cases has been under six months. Further information on the time between each community body's receipt of their Section 34(4) letter and their submission of an application to register an interest in land is noted in Table 9 in the Annex.

3.19 Community Bodies have registered an interest in a wide range of types of land. These have included fields, woodlands, and land which includes buildings such as churches, a school, community centre, disused church and church hall, a disused airbase, a disused PoW camp, piers and a reservoir. Communities have identified the land and assets that they wish and which they would be able to manage. Registrations have not included salmon fishing rights to any great extent.

3.20 Community bodies have also identified a range of land use on that land, including business, leisure, housing, amenity and tourism. There have been few proposals for renewable energy projects, communities appearing to prefer to develop such projects in other ways than through ownership through the community right to buy provisions. Most community bodies have identified a number of such different uses on the land (Table 10 in the Annex). These projects can have a transformational effect on the land should it be successfully acquired by the community (Table 11 in the Annex).

3.21 The following examples show the type of land to be registered, how the communities were to use the land, the benefits to the community and why the community body was successful or not in acquiring the land. They touch on some of the reasons for using the CRtB provisions for the purchase of land and the potential benefits of the CRtB noted below (Table 3.2).

Table 3.2 Examples showing the use of the CRtB and proposed benefits

CB name/case no	Camuscross & Duisdale Initiative (CB00107)
Type of land registered	Surplus Scottish Water reservoir surrounded by croft/grazing land.
Proposed usage of land	Reservoir to be maintained and used to head a small- scale hydro plant. Maintenance of bordering land for biodiversity etc.
Benefits to community	Increased level of maintenance and development on land. Clean source of electricity to be fed back into the grid. Once on-stream, the funds from the hydro plant will be used for other community purposes and development/upkeep of the land/systems.
Purchased or not	Purchased.
Reasons for purchase or not	Purchase price very low. Funding received from a cocktail of funders. Real potential in viability and creation of wealth. Proactive group who acted on advice from relevant organisation e.g. Community Energy Scotland.
Valuation by independent SG appointed valuer	£6,475

CB name/case no	Comrie Development Trust (CB00042)
Type of land registered	Former PoW camp including nuclear bunker, listed Nissen huts and grassed areas.
Proposed usage of land	Business units, war time heritage area, allotments and recreational facilities/areas.
Benefits to community	Employment/training opportunities. Opportunity to have an allotment. Educational/heritage tourist attraction which will bring money into the area. Recreation facilities for all. Future development opportunities
Purchased or not	Purchased
Reasons for purchase or not	Local individuals had the necessary skills to progress tasks. Local community very active. Purchase funded by loans from social banks. Site had possible areas that could be sold off to pay off part of the loan. Robust business plan. Good support from BIG Lottery in funding business plan.
Valuation by independent SG appointed valuer	£350,000

CB name/case no	Silverburn Community Limited (CB00014)
Type of land registered	Surplus Scottish Water 'Chisholm' (water storage) tank and surrounding land.
Proposed usage of land	Community hub including visitor facilities and landscaped gardens.
Benefits to community	Local community hub. Visitor attraction/facilities. Group meeting area. Cut down travelling to other towns for facilities.
Purchased or not	Purchased
Reasons for purchase or not	Local people had the necessary skills to progress the various milestone tasks. Purchase price was moderate, with main costs focussed on development. Appeared in BBC's 'The Beechgrove Garden', which landscaped the gardens with the help of local volunteers.
Valuation by independent SG appointed valuer	£125,000

CB name/case no	Willow Wood (West Lothian) Community Company Ltd (CB00073)
Type of land registered	Residential mobile home park
Proposed usage of land	Residential mobile home park with additional community hub/training facilities.
Benefits to community	Security of tenure. Provision/maintenance of site and facilities. Reduction in the need to travel to other towns. Area development and maintenance.
Purchased or not	Not purchased.
Reasons for purchase or not	Although a comprehensive business plan was developed, it did not meet the BIG Lottery's funding criteria. Other funders/banks contacted offered some funding, but this was not sufficient to progress the purchase.
Valuation by independent SG appointed valuer	£1,100,000

3.22 Community bodies were inspired to purchase land and assets for a variety of reasons, some of which are indicated above. Further research highlights other reasons why community bodies choose to purchase land and assets (Skeratt, 2011; Aiken et al, 2011) including:

• The desire to take care of assets / the land for future generations;
• The desire to respond to the threatened loss of a valued facility;
• The desire to increase the resources of a community organisation;
• The desire to create a sustainable, long-term source of income;
• The desire to sustain their local community, both economically and socially; and
• The desire to gain credibility and create leverage with statutory agencies and local government.

3.23 The types of groups and bodies interested in buying assets appear to be similarly wide ranging (Aiken et al, 2011), including:

• Small, mainly volunteer-run groups with a single long-standing asset (classified by the study as 'Stewards');
• Medium sized organisations, often with a range of assets, involved in local service delivery and partnerships (classified by the study as 'Community Developers'); and
• Organisations running larger and more professionalised social enterprises, with a mixture of assets for social and commercial purposes and a comprehensive business model (classified by the study as 'Entrepreneurs').

3.24 The potential benefits of owning land and assets are wide-ranging (Skerratt et al, 2011; Aitken et al, 2011; JRF, 2011). Some of these are noted above. Others include:

• Ongoing estate management and long-term stewardship;
• Greater investment due to security of tenure;
• Greater financial viability of assets;
• Growth of communities;
• Greater economic sustainability for communities;
• A better physical environment;
• Increased opportunities for business development, jobs and training;
• Enhanced credibility with local authorities and outside agencies;
• The development of private enterprises and jobs;
• Improved services that are easier for communities to access;
• More affordable housing;
• Improved levels of activity and access to services;
• Infrastructure development; and
• A heightened sense of local identity;

3.25 The impact of CRtB has been commented on by a number of researchers. The JRF states that the benefits of CRtB (in terms of its ability to change the pattern of land ownership in Scotland and facilitate large-scale community asset ownership) appear to have been relatively small scale, with just 10 out of 124^[3] applications to buy land having been successful by November 2010 (JRF, 2010). MacLeod et al (2010) found that, to date, the CRtB has been relatively little used to purchase land and associated assets in Scotland, though it has given an opportunity for a larger number of groups to register an interest in land. That study found it difficult to quantify the impacts of CRtB on land ownership in Scotland, due to the absence of a comprehensive list of community land initiatives and the range of other factors which influence key actors' decision-making in that regard.

3.26 That the full impacts of the legislation are not known was also a conclusion of the Scottish Government report Monitoring and Evaluating the Effects of Land Reform on Rural Scotland: a Scoping and Impact Assessment, published in 2007. This study highlights the lack of appropriate monitoring data to quantify the impact of Land Reform in Scotland, and the need to develop a more comprehensive evaluative framework for how Land Reform in Scotland contributes to sustainable rural development. It also highlights that, given the diverse nature of Land Reform arenas and measures, a one-size-fits-all approach to evaluation may not be appropriate (Scottish Government, 2007).

3.27 Some commentators (Slee et al., 2008) suggest that Part 2 of the Act may have had various indirect effects on community land ownership. These range from providing community groups with a bargaining tool in purchase negotiations with landowners, to encouraging a climate of greater receptiveness to community involvement in land management from private, public and third-sector landowners. In support of this, Heather Holmes (2010) identifies a growing number of communities that have taken on ownership of land in the last few years, even if they do not use the Community Right to Buy provisions. The JRF adds that perhaps the biggest impact of the CRtB is that it may act as a catalyst for community action and new ideas (JRF, 2010), and MacLeod et al agree that there have been positive impacts in relation to cultural change regarding the dynamics of community groups themselves, which may be attributable to the Community Right to Buy.

3.28 Research suggests that CRtB buyouts are most likely to be successful when a number of factors are at play (Holmes; MacLeod et al; Aiken et al, 2011). These include:

• A genuine need to purchase land for community benefit;
• Strong emphasis on the development and management of natural and / or built assets for the benefit of the communities in question;
• A realistic proposal that does not over-extend community organisations;
• A community that is prepared to listen to advice from supportive bodies;
• A successful funding application(s) which provides the resources necessary to purchase land;
• A cohesive community;
• Involvement of community members in decision making;
• Paid staff, rather than a sole reliance on volunteers;
• Good financial and business planning (e.g.: the marshalling of funding and investment streams, ongoing business planning etc.);
• Full awareness of the potential costs associated with an asset, and knowledge of whether or not it is fit for purpose;
• Strong capacity and leadership within the community;
• Transparent, inclusive, effective governance of buy-outs;
• Strong, effective relationships with external partners (e.g. local authorities);
• Good access to external support, including technical aid;
• A good balance between commercial and community needs; and
• The inclusion of assets in a strategic approach to local development.

3.29 Several of these themes (e.g. good business planning, a strategic approach to local development, cohesive communities etc.) suggest that communities may need a degree of pre-existing empowerment in order to get the most out of CRtB. This challenges the assertion that it has the potential to make all rural communities more empowered. This was the view of several attendees at a recent JRF event on CRtB, who felt that the legislation would most favour communities that already have well-established organisations and / or that are more affluent (JRF, 2010). Those involved in delivering the legislation have also commented that 'although a number of communities have successfully submitted a 'late' application to register an interest in land and have successfully purchased land and other assets, not all have been in a position to do so' (Holmes, 2010). Nevertheless, communities approach CRtB from a wide range of backgrounds and in a variety of forms. For example, some form a company and then shortly afterwards submit an application, whereas others approach the CRtB process before they have put any such arrangements in place.

Barriers to Uptake of CRtB

3.30 MacLeod et al (2010) identify a number of barriers which might help explain the limited uptake of CRtB for purchasing land and associated assets in Scotland. These include

• The land not coming on to the market;
• The land being withdrawn from the market once a registration was accepted;
• Complexity of the legislation;
• Resource intensiveness of the legislation's administrative requirements;
• Community bodies withdrawing for various reasons, including to pursue negotiations outside the Act (which is often viewed as a more flexible and amicable means of concluding purchases with landowners);
• Applications being rejected because its reasons for being 'late' were judged insufficient;
• Applications being judged as flawed in relation to mapping requirements;
• Applications being judged as flawed regarding compliance with the Memorandum and Articles of Association requirements in the Act;
• Applications being judged as flawed on multiple counts.

3.31 The first two barriers are also noted in a report by JRF, which states that many prospective purchases have not taken place simply because the land has not come onto the market (there is no provision to force owners to sell: the right to buy requires a willing seller: it does not involve a community purchase of land registered under the Act), and that this can lead to situations where time and effort is wasted planning for eventualities that never arise (JRF, 2010). Holmes agrees with this summary of the situation, adding that landowners often dislike the right to buy and will not sell the land or assets to a community body while their interest is registered (Holmes, 2010). In addition, Holmes identifies another barrier preventing communities' use of CRtB for purchasing land and associated assets:

• A lack of resources and the inability of community bodies to raise the money to buy land.

3.32 These barriers (tangible or perceived) highlight a number of areas where the community right to buy could be reviewed and where improvements might be made to the legislation:

3.33 Firstly, they suggest a need to simplify the time consuming administrative processes involved that have led to many applications being delayed and the need to give communities more time (MacLeod, 2010; JRF, 2010). In particular, there is a need to consider whether the late and the timeous processes and their requirements should be the same, and whether the Act could be extended to cater for situations where land unexpectedly comes onto the market or where sales do not take place on an open market; whether the definition of 'community' is the most appropriate one; how communities could gain easier access to the Full Electoral Roll in assessing their community support and in undertaking their ballot during their right to buy; and whether the re-registration process is appropriate. All these changes will need to be viewed within the terms of the ECHR compliance.

3.34 Secondly, there is a need for more technical help to be made available 'for everything from surveys to legal requirements to setting up management bodies'. These tasks are often time-consuming and costly for communities, and they can be just as significant a barrier to successful applications as lack of funds (JRF, 2010).

3.35 Third, the barriers outlined above point to the importance of appropriate guidance and support for community organisations. This has been noted in respect to prospective purchases that never come onto the market / are withdrawn by the owner (JRF, 2010). Guidance and support are key to making the administrative processes more accessible to communities.

3.36 The barriers highlight the limited potential that the CRtB legislation has to make an impact where there is a poor supply of land available for purchase and/or limited financial resources available to the interested communities in order to facilitate purchases. In response to this issue, both MacLeod et al and JRF call for more accessible funding to support community purchase and ownership. They also question the closure of the Scottish Land Fund in 2006, which they feel has weakened the framework of public-sector support (MacLeod et al, 2010; JRF, 2010). Indeed, recent research on Community Land Initiatives has highlighted the drying up of funding support for capital and asset purchases as the most pressing issue facing the community land sector (Bryan and Campbell, 2010).

3.37 Research has also highlighted a number of other areas which could help maximise the value gained from the CRtB (Aiken et al, 2011). These include the need to:

• Take action to secure opportunities for all communities, particularly those in disadvantaged areas, where there may be a lack of capacity and resources;
• Explore alternative options that may be more beneficial where full ownership of an asset is too complex or risky (e.g. the potential for license, rental or part-buy mechanisms);
• Enhance the availability and quality of brokerage and technical aid, to help develop and link financial resources, stakeholders, ideas, opportunities and skills;
• Improve the transparency and quality of information about assets; and
• Encourage monitoring and assessment to develop practicable and robust methods for different organisations.