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Review of the Effectiveness of Current Community Ownership Mechanisms and of Options for Supporting the Expansion of Community Ownership in Scotland

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Review of the Effectiveness of Current Community Ownership Mechanisms and of Options for Supporting the Expansion of Community Ownership in Scotland COMMISSIONED REPORT Review of the effectiveness of current community ownership mechanisms and of options for supporting the expansion of community ownership in Scotland Summary Review of the effectiveness of current community ownership mechanisms and of options for supporting the expansion of community ownership in Scotland Contractor: Rob Mc Morran (Scotland’s Rural College) Anna Lawrence (Random Forest Ltd.) Jayne Glass (Perth College UHI) Jon Hollingdale (Community Woodland Association) Annie McKee (James Hutton Institute) Diane Campbell (Independent Consultant) Malcolm Combe (School of Law, University of Aberdeen) Year of publication: 2018 Keywords Community ownership; community right to buy; public asset transfer; negotiated sales; land reform; Scotland This report should be cited as: Mc Morran, R., Lawrence, A., Glass, J., Hollingdale, J., McKee, A., Campbell, D. and Combe, M. 2018. Review of the effectiveness of current community ownership mechanisms and of options for supporting the expansion of community ownership in Scotland. Scottish Land Commission, Commissioned Report. For further information on this project contact: James MacKessack-Leitch Tel: 0300 244 4452 Review of the effectiveness of current community ownership mechanisms and of options for supporting the expansion of community ownership in Scotland EXECUTIVE SUMMARY I. Background This summary presents the findings of research commissioned by the Scottish Land Commission to review the effectiveness of community ownership mechanisms and options for simplifying or improving these mechanisms to enable and support the expansion of community ownership in Scotland. This included reviewing processes relating to negotiated sales or transfers of land and/or assets to communities, as well as legislative mechanisms including the Community Right to Buy (CRtB), Crofting Community Right to Buy, the Transfer of Crofting Estates (Scotland) Act 1997 and Asset Transfer measures under the Community Empowerment (Scotland) Act 2015. II. Method and approach The approach included three main elements: i) Desk-based review and 16 scoping interviews with stakeholders; ii) interviews with 32 community groups which had attempted or were attempting to acquire land or assets either through a legislative or non-legislative route, interviews with 13 professional intermediaries (lawyers, land agents and consultants) and interviews with 12 non- community landowners (including private, NGO and public landowners); and iii) two workshops with community groups (25 participants). The community interviews and workshops explored the experiences of communities with community ownership mechanisms, key challenges, and potential solutions. The key strengths and challenges identified by research participants are presented below as they relate to each ownership pathway, with cross-cutting challenges highlighted. The report’s conclusions and recommendations are also summarised below. III. Mechanisms for ownership – key strengths and challenges Negotiated transfers - Key strengths Interviewees recounted positive experiences of this pathway where the land or asset owners were willing sellers. A pre-existing relationship between the landowner and the community, and clear lines of communication, were perceived as helping the negotiation process. A clearly-identified community need and strong leadership within the community body were also seen as helpful for a smooth negotiation process. Key challenges Communities identified challenges relating to establishing clear lines of communication with owners, while landowners faced challenges identifying ‘official’ community representatives and in relation to division of opinion on key issues within communities. Without a willing seller, it is not possible for communities to receive Stage one funding from the Scottish Land Fund to explore options for the land/asset(s). Negotiated transfer can take a long time and lead to high costs (time and money) for both parties. Landowners were wary of entering into negotiations where they perceived community bodies as lacking in capacity or as having undertaken insufficient business planning. Community Right to Buy - Key strengths CRtB can result in ownership and the process was recognised as balanced. Learning can occur and the process can test community capacity for ownership. The indirect effects of the legislation were recognised, including: i) increased community confidence; ii) the creation of an environment for negotiation; and iii) increased awareness of community development needs among landowners. Recent amendments to the legislation were seen as positive, but insufficiently far reaching. ii Review of the effectiveness of current community ownership mechanisms and of options for supporting the expansion of community ownership in Scotland Key challenges Appropriate use of CRtB: Cases where CRtB being used unnecessarily were apparent, with the use of CRtB to acquire publicly-owned assets seen as inappropriate. CRtB applications were also recognised as having been submitted to thwart a development or protect built heritage - purposes not fully aligned with the aim of sustainable development. Complexity and failure rate: CRtB represents a complex, challenging mechanism, with a high failure rate, requiring communities to work on multiple work streams in parallel. Governance and community definition: Communities were often required to set up a new body or modify their constitution to comply with the legislation, often a time-consuming process. Determining the most suitable governance structure and ensuring membership of the community body can include people from outside the defined area were challenging due to a requirement for 75% of the membership to be from within the community area. Process and timescales: Responding to an opportunity and completing the CRtB application process sufficiently quickly to avoid a late application was often challenging, particularly in urban contexts. In some cases this was compounded by delays in feedback from the Scottish Government, or delays in the valuation or ballot. Perceptions and managing expectations: Communities were often unaware of CRtB success rates, what the process entails (e.g. the time required) or that alternative routes may exist, resulting in unrealistic expectations in some cases. Failure to achieve a successful registration and/or purchase often led to demotivation and dis-engagement. Landowner relations: Factors communities identified as affecting relations between communities and landowners included: i) the paternalistic attitude of some owners; ii) vested interests; iii) personality clashes; and iv) conflicts around planning applications. Landowners also specifically referred to: i) uncertainty and the potential for financial losses resulting from delayed/halted sales or selling at a value below what the open market might pay; ii) difficulties communicating with community bodies or communication breakdowns; and iv) communities perceived as using CRtB to stop a sale or development. Communities also faced challenges when identifying and/or communicating with landowners and clarifying the boundaries of a site. Legal challenges of CRtB: In a limited number of cases CRtB has been challenged on legal grounds, in relation to subjective terminology, on technical grounds (e.g. accuracy of map) and in relation to options to sell. Legal challenges have resulted in CRtB applications being delayed, declined or overturned in some cases. Communities felt vulnerable to legal challenges and highlighted the costs of defending a challenge and a perceived lack of support for this from the Scottish Government. Challenges in urban contexts: Communities highlighted the difficulty of pre-empting sales and targeting assets for CRtB in urban contexts, where property sales completed quickly. This resulted in many urban applications being deemed late. Defining communities was often challenging due to their size and interactions being based around common interests rather than geography. Other challenges included low awareness of CRtB and high acquisition and development costs. The emergent Community Rights to Buy: Most interviewees welcomed the compulsory purchase CRtB routes, with the CRtB Abandoned, Neglected or Detrimental Land seen as potentially useful for overcoming existing challenging cases. Both routes were identified as backstop measures (not first options), with a likelihood that both may face lengthy legal challenges in the future due to the subjective nature of related terminology. Crofting Community Right to Buy - Key strengths Despite limited uptake, as a right of compulsory purchase which had stood up to a legal challenge, it was recognised as having had important indirect effects in relation to wider legislation and other crofting buyouts. iii Review of the effectiveness of current community ownership mechanisms and of options for supporting the expansion of community ownership in Scotland Key challenges The Crofting CRtB was seen as highly complex and time consuming, particularly in relation to mapping of croft holdings, which caused delays, frustration and demotivation. Limited availability of financial and advisory support for the process was recognised despite the complexity, as well as inconsistent feedback and a lack of awareness among civil servants of the local context and related challenges. There remains limited scope for use of this route owing to: i) the complexity of the route; and ii) the reluctance of crofting communities to take on ownership.
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