The Land Reform (Scotland) Bill 2015

Background

The Land Reform (Scotland) Bill was introduced to the Scottish Parliament on 22nd June 2015. The Bill is the flagship piece of legislation in the Scottish Government's multifarious Land Reform programme. According to the Minister responsible for Land Reform, the Bill will"…end the stop start nature of Land Reform in Scotland..."

Undoubtedly the Bill represents a further advance in community ownership in Scotland and seeks to place further restrictions on private land ownership. However, what is notable is what the Bill does not include, both in terms of: (a) previous Scottish Government proposals, or proposals of the Land Reform Review Group (LRRG), which are not being implemented, and (b) the volume of detail which will, if the Bill is enacted as currently drafted, be left to Scottish Ministers to introduce via secondary legislation.

The Bill as introduced will be subject to parliamentary scrutiny, and the provisions as commented upon in this note may change over the course of the next few months. This note deals with the conventional Land Reform aspects of the Bill. The amendments to the Agricultural Holdings Acts are covered in a separate Briefing Note.

Measures not in the Bill

In the run up to the introduction of the Bill, there had been some concern on the part of owners and managers of land about various proposals mooted either by the Scottish Government or by groups set up by the Scottish Government. However, some of these more headline grabbing proposals have not actually made their way into the Bill:

Restriction on foreign ownership - the Bill does not contain any provisions which would restrict foreign owners from owning land in Scotland, in furtherance of the policy objective of the LRRG. Instead the Bill contains provision in relation to information about those who control land.

Limit on the amount of land that may be owned - the Bill does not contain any restriction on the maximum amount of land that may be owned. In response to the LRRG's recommendation on this topic, the Scottish Government indicated that they would require"significant evidence…in order to ensure [ECHR compliance]…" Presumably the view of the Scottish Government is that any such proposal would run contrary to ECHR requirements.

Duties on charity trustees – the Scottish Government mooted the possibility of placing a duty on charity trustees to consider the effect of a transfer of land on the relevant community. These proposals have not been carried forward in the Bill. However, in terms of the community engagement guidance which the Scottish Ministers are to produce (see below), the Scottish Government suggest in the policy memorandum that failure of charity trustees to adhere to the guidance may be a matter which the Office of the Scottish Charity Regulator could pursue.

Measures in the Bill - but precise details yet unknown

There appears to be a trend in Land Reform matters for the main (primary) legislation to leave the detail to be made by the Scottish Ministers by Regulation (ie by secondary legislation). The legal hierarchy, therefore, is that the Scottish Parliament passes an Act and essentially asks the Scottish Ministers to come up with further detail. If and when the Ministers wish to do that, they then propose the relevant secondary legislation and ask the Parliament (by various possible processes) to approve that secondary legislation.

There is, therefore, still parliamentary control and scrutiny of the Scottish Government, but the concern is that the level of scrutiny of secondary legislation is not always as high as full parliamentary scrutiny. It may also be said that the issue is made all the more relevant where, in the context of the Scottish Parliament (which does not have a second chamber), the Government has an outright majority.

A number of significant measures in the Bill are left to the Scottish Government, including: guidance on community engagement (which may potentially be significant); provisions in relation to access to information about persons in control of land; details on excluded land in terms of the extension of the community right to buy; modification of the rules in relation to community bodies; and modification of the new register of land for sustainable development.

There is, of course, nothing wrong as a matter of principle with law being made by secondary legislation. It is, however, striking that the Ministers would, if the Bill is enacted, be required to produce so much. It also makes it all the more difficult to assess at this stage the impact of the legislation where only the outline measures are known in some cases.

The Contents of the Bill The fact that some of the more controversial proposals have not found their way into the Bill will provide some comfort to owners and managers of land. The Bill, however, does contain measures which will impact on land ownership. Scottish Land Commission The Bill contains provision for the establishment of a Scottish Land Commission. The Commission is to have wide ranging functions on"any matter relating to land in Scotland" including reviewing law and policy, recommending changes in law and policy and gathering evidence. The Scottish Ministers are to be responsible for appointing the Land Commissioners. Information about Control of Land The Bill contains proposals whereby Scottish Ministers may make regulations concerning information about those in control of land. There are two aspects to this. The first aspect is access to information on persons in control of land, by persons"affected" by that land. The detail of these provisions will be provided by secondary legislation and, as such, it is not exactly clear what the implications will be for landowners. However, our initial comments are: i) The proposal is that, in order for a person to obtain information about land, that person needs to be"affected" by that land. The term"affected" is not yet defined, but presumably there will require to be an identifiable link between the person and the land.

The proposal is that, in order for a person to obtain information about land, that person needs to be"affected" by that land. The term"affected" is not yet defined, but presumably there will require to be an identifiable link between the person and the land. ii) Subject to whatever the Scottish Ministers may provide on the definition of"affected", it would appear that this is not an opportunity for any member of the public to delve into ownership details. However, if a person affected by land is able to request information, then there is no limit in the Bill to whom that information may be passed. The second aspect is in relation to a new power to be held by Registers of Scotland enabling the Keeper of the Registers to request information about those in control of land. The proposal also includes the power to request"…information [relating to] individuals having a controlling interest in [land]…" Presumably if the Keeper receives such information then it would then come into the public domain. Interestingly the Bill does not appear to specifically provide that owners must comply with the Keeper's request for information, the proposal only relates to the Keeper having the power to make the request. Engaging Communities The Bill sets out that the Scottish Ministers must issue guidance about"engaging communities" in decisions relating to land which may affect communities. The obligation on the Scottish Ministers to issue guidance is a mandatory obligation, but any guidance issued by the Ministers will not have the force of law. Clearly the detail will only be known if and when the Scottish Ministers issue guidance, but the drafting of the Bill is wide and vague. The Bill does not, for example, define to whose"decisions" the guidance must relate. Nor does it define what is meant by"communities" (and Land Reform legislation is not short of issues of definition in this regard). What is perhaps slightly unusual is that the policy memorandum accompanying the Bill sets out potentially significant consequences in relation to an owner of land not complying with the guidance. The memorandum states that a lack of consideration of the guidance could (a) be a factor that the Scottish Ministers take into account when assessing an application for a forced sale of land (see below) and (b) affect future awards of land related grants. However, the Bill itself (which will be the law) does not mention anything about that. If that is the Scottish Ministers' intention, then surely that must be set out in the legislation given the significance of either consequence. The sustainable right to buy One of the proposals suggested previously by the Scottish Government was a right to buy where an owner of land is a barrier to sustainable development. What is contained in the Bill is an extension of the existing community right to buy, to a right to buy land to"further sustainable development". This is a brand new form of right to buy, and the Keeper of Registers of Scotland is to be tasked with setting up a new"register of land for sustainable development". Perhaps the most notable aspect of the sustainable development right to buy is that it applies to all land in Scotland, not just rural land. The Bill goes on to provide that salmon fishings and mineral rights"relating to" land being purchased may also be purchased. The significance of the new right to buy is that the right can be exercised even where the landowner does not want to sell - that is, an owner can be deprived of land so long as the statutory procedure is followed. The Bill permits a hostile right to buy if"sustainable development" conditions are met. With previous Land Reform legislation, the problem has always been that sustainable development is not specifically defined. What is interesting with the current Bill is that there is an attempt to provide further definition of what sustainable development actually means. The Bill states that sustainable development conditions are met if: (a) The transfer of land is likely to further the achievement of sustainable development in relation to the land [Note – this is a slightly circular statement] (b) The transfer of land is in the public interest. (c) The transfer of land, (i) is likely to result in significant benefit to the relevant community…to which the application relates, and (ii) is the only practical way of achieving the significant benefit. (d) Not granting consent to the transfer of land is likely to result in significant harm to that community. Paragraphs (a) to (d) are in themselves difficult to fully comprehend and to translate into solid answers as to what sustainable development means. The concept of sustainable development is nebulous in isolation, and the introduction of these further vague criteria, may do little to make the position any clearer. It is also interesting to note that all four of the requirements in paragraphs (a) to (d) would need to be met in order to meet the over-riding test of sustainable development. Rates on Sportings The Bill proposes an end to the non-domestic rates exemptions for shootings and deer forests. Properties are to be valued as at 1st April 2015 with the proposed change taking effect on 1st April 2017. The Scottish Government forecast that this will potentially generate revenues of £4m each year, although that figure is before any reliefs are applied. Interestingly, the Scottish Government also forecast that the Forestry Commission will bear a reasonably heavy burden in this regard (the Forestry Commission currently being responsible for around a third of the national deer cull).

It will be necessary for each local authority to value each shoot and then attend to the relevant accounting. It would then be necessary to work out which shoots are exempt because of existing reliefs (for example the Scottish Government anticipate that a high number of small scale shoots will qualify for the Small Business Bonus Scheme). Doubtless there would be valuation appeals.

Once all relevant costs are taken into account, and once the exemptions are subtracted from the headline figure of £4m each year, the cost/benefit analysis of imposing rates is possibly not something that will generate significant additional resource for the Scottish Government.

Deer Management

The Bill proposes an increase to the powers of Scottish Natural Heritage (SNH) to permit SNH to request Deer Management Plans to be created and to impose a fine on landowners who fail to do so.

Access Rights

The Land Reform (Scotland) Act 2003 made provision for the creation of a core paths plan within each Local Authority. The Bill provides for the review and amendment of the core paths plan. There is a requirement for the local authority to consult with the landowner prior to the amendment of the plan. The landowner may object to any proposed amendment and the proposal is that any objection is referred to Scottish Ministers.

What happens next?

In terms of Parliamentary procedure, nothing will happen until after the summer recess. When Parliament re-convenes in September the Bill will be subject to the usual 3 stage parliamentary procedure (that is consideration by the full Parliament and the relevant committees). It is understood that the Scottish Government wish to see the Bill enacted as law before the end of the current session of the Scottish Parliament in spring 2016.

Conclusion

It is fair to say that the depth of the political rhetoric in recent months is not fully reflected in the proposed legislation. That said, the Bill does contain some measures which may result, for example, in the forced sale of land by an unwilling seller, and yet more layers of regulation and bureaucracy may be imposed on private land owners. Parties interested in purchasing land in Scotland would need to consider the various community rights to buy affecting land – up to 4 if the proposals in the Bill are enacted. Owners and managers of land ought to take notice. These measures are, however, constrained by various means within the Bill itself, and within the existing body of property law.

Perhaps the most notable aspect of the Bill is the lack of clarity which surrounds some of the details. The lack of clarity arises either because the Scottish Ministers will need to set out further legislation in due course, or because the Bill deals with vague concepts of community ownership and sustainable development which are hard to pin down. It will also remain to be seen what impact the Scottish Land Commission will have. It may be encouraging to hear that the Scottish Government intends the Bill to end the stop start nature of Land Reform. That level of certainty and clarity is, however, some way off.