On 4 February 2021 the Scottish Land Commission (SLC) published a discussion paper, setting out legislative proposals relating to the concentration of land ownership in Scotland.
2019 report and recommendations
The discussion paper makes reference to a report published by the SLC in 2019. The Scottish Government wants to create a more diverse pattern of land ownership and had asked the SLC to investigate the issues associated with large scale and concentrated ownership.
The SLC carried out investigations by way of a call for evidence – it received 407 responses and a sample of 29 respondents was identified for detailed interviews. The 2019 report provides the SCL's analysis of the evidence gathered.
The SLC simultaneously published a list of recommendations aimed at addressing the issues which the SLC identified in the report. These 2019 recommendations focused on rural land ownership and included three recommendations for legislative measures:
- Requirement for landholdings to publish a management plan;
- Statutory review mechanism; and
- A public interest test for significant land acquisitions.
2021 legislative proposals
The discussion paper sets out why the SLC considers that the above legislative measures are required and how they could work in practice.
Requirement for management plans
"Any landholding operating at scale should prepare and engage on a management plan that demonstrates delivery against the Land Rights and Responsibilities Statement and connects with local priorities, opportunities and public policy"
The requirement would be based on scale – not concentration. A landowner who owns all the land surrounding a village would not be required to prepare and engage on a management plan, unless they meet a threshold size (suggested as between 1,000 – 3,000 hectares in the 2019 recommendations).
Reference is made to enforcement (e.g. cross-compliance). It appears that enforcement in this context is referring to compliance with the obligation to produce a management plan (not compliance with the terms of the management plan).
Land rights and responsibilities review
"A review process should be framed in terms of the principles of the LRRS and underpinned by statutory Codes of Practice"
The SLC's aim is to have a means to address adverse effects of concentrated landownership.
There is a suggestion that existing landownership protocols prepared by the Land Commission, such as that on community engagement, could become statutory codes of practice. The SLC's discussion paper sets out that parties would be empowered to allege breaches of codes of practice and a relevant body empowered to investigate the breaches, report on its findings and propose remedial actions.
Reference is made to the experience of the Tenant Farming Commissioner and the codes of practice published on specific matters relating to agricultural holdings. The Tenant Farming Commissioner's codes of practice deal with specific topics, which are rooted in agricultural holdings legislation (such as rent review).
The discussion paper does not elaborate on how this model might apply to the general statements and principles contained within the Land Rights and Responsibility Statement.
Public interest test
"The primary objective of this proposal is to be able to test whether a specific significant acquisition of land is likely to create or perpetuate a situation in which excessively concentrated power could act against the public interest."
The SLC's discussion paper proposes that:
- The point at which the test would apply is when control of a landholding transfers from one party to another including sale on the open market, private sale, inheritance, sale of shares in a controlling company, appointment to or change in trusteeship and creation of an option agreement.
- Scoping criteria would be required to determine whether or not an acquisition should be subject to a test (e.g. if above a certain scale threshold, account for more than a specific minimum proportion of either a remote rural area or island, or have previously been the subject of a statutory Land Rights and Responsibilities Review).
- Initiation of the test would require a duty on the party acquiring land to notify ahead of a transfer (with potential for the test to be triggered after a transfer, if advance notification is not given). Specific reference is made to a duty being imposed on lawyers.
- Application of the test would be carried out by an assessing body, which would examine the evidence and make a judgement on any measures necessary to safeguard the public interest.
- The outcome of the test could be the acquisition proceeding as planned, the acquisition proceeding with conditions, or prohibition of the acquisition.
The SLC highlights that it is common practice in other areas of regulation not to define what is in the "public interest". This indicates that, at this stage, there is no proposal to define what would be in the public interest in the context of a land acquisition. The discussion paper notes that it may vary on a case-by-case basis, and suggests guidance would be prepared, proposing that that guidance would focus on features considered harmful to the public interest.
The discussion paper does not contain the detail necessary to comment on how a public interest test could work in practice (for example, in the context of a closing date), the role that lawyers would be expected to play in the process, or the measure's relationship with the European Convention on Human Rights.
Next steps
The SLC discussion paper highlights that significant work remains to be done to develop the legislative proposals. It clearly states that the views expressed are those of the SLC, and that ultimately it would be for the Scottish Government and Parliament to progress the proposals.
If you have any queries relating to the discussion paper or land reform in general, please get in touch with your usual contact in the Rural Business team.
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