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Publication - Report

The land of Scotland and the common good: report

Published: 23 May 2014
Directorate:
Environment and Forestry Directorate
Part of:
Environment and climate change
ISBN:
9781784124809

The final report of the Land Reform Review Group.

263 page PDF

15.9 MB

263 page PDF

15.9 MB

Contents
The land of Scotland and the common good: report
Section 24 - Pattern of Rural Land Ownership

263 page PDF

15.9 MB

Section 24 - Pattern of Rural Land Ownership

1 A central issue in the longstanding calls for land reform in Scotland continues to be the very concentrated pattern of private land ownership in rural Scotland, with a relatively small number of land owners with large properties, owning the majority of Scotland's land area.

2 It is claimed that currently 432 private land owners own 50% of the private land in rural Scotland. The latest estimate of Scotland's population is 5,327,000 , so this means that half of a fundamental resource for the country is owned by 0.008% of the population. [1] As a measure of inequality in a modern democracy, this is exceptional and is in need of explanation.

3 This remarkable pattern of ownership leads Scotland to be described as having a more concentrated pattern of large scale private land ownership than is found in any other country in the world. [2] Scotland also had a similar type of international distinction in relation to feudal tenure. Up until the Abolition of Feudal Tenure etc. (Scotland) Act 2000, Scotland was the last country where feudal tenure was still the way most land was owned

Historical trends in the Pattern of Rural Land Ownership

4 The origins and development of Scotland's current pattern of land ownership can be traced back to previous centuries. [3] From the 17th century, into the second half of the 19th century, there was an increasing concentration of land ownership into fewer and fewer private estates. [4] A government survey in 1872 found that 90% of Scotland's land area of 7.9 million hectares was owned by 1,380 private land owners ( Fig.24).

5 Over the next hundred years or so, that very high degree of concentration did reduce to some extent, mainly due to two developments. Firstly, there was an expansion of public land ownership in rural Scotland during the first half of the 20th century. This was mainly due to the purchase of land through the Forestry Commission and for the Government's land settlement programmes (see Sections 13 and 26). The second main factor was the growth of owner-occupied farms in some lowland areas, particularly during the 1920s and 1930s (see Section 28). However, despite this reduction in the concentration of private ownership, studies in the 1970s showed that 100 years on, less than 1,500 large scale private land owners still owned 60% of Scotland's land area ( Fig.24). [5]

6 While there was a reduction in the number of the largest private estates of over 8,000 ha (20,000 acres) to around 120 during this period, there was little change in the number of private estates of over 2,000 ha (5,000 acres) at around 550. The total number of private land owners in Scotland owning over 405 ha (1,000 acres) also remained the same, at around 1,750 in both 1872 and 1970. [6] This lack of change in the number of owners with over 405 ha, reflects the degree to which both the underlying structure of private estates, and the concentrated pattern of private land ownership, has continued to survive in rural Scotland.

7 In the 40 years since 1970, there has been little change in the pattern of land ownership in Scotland. The amount of publicly owned land, which was considered to be around 13% of Scotland's land area in 1970, currently stands at around 11-12%. Fig. 25 shows that, with rural Scotland accounting for 97% of Scotland's land area, there has been very little change in the concentrated pattern of large scale private land ownership. [7] If anything, the information for 1995 and 2012 might suggest some re-concentration of land ownership taking place, with a reduction in the number of land owners owning 60% of privately owned land. The number of private land owners in Scotland with over 405 ha has also reduced, from around 1,750 in 1970 to 1,550 in 2012. [8]

Fig.24 Number of Land Owners in Scotland in the 1870s and 1970s

Fig.25 Private Land Ownership in Rural Scotland 1970-2012

8 The composition of the owners of Scotland's larger rural estates has, like the pattern of ownership, shown a high degree of continuity. A study in the 1970s showed that a quarter of the largest 25 estates in Aberdeenshire had been in the same ownership for over 400 years, and over a third of the largest 50 had been owned for over 200 years. Recently, a survey of 228 estates found that, on average, they had been in the same ownership for 122 years, with 35% having been owned for over 100 years. This included 5% which had remained in the same ownership for over 500 years. [9]

Fig. 26 Land Owned and Managed by Environmental NGOs in Scotland

9 The pattern of land ownership has often reflected historical and economic circumstances. Some estates have been owned since they were acquired in the 19th century with money generated through industry or the British Empire, while others were created from the sub-division of larger estates, particularly during the 1920s and 1930s, due to taxation policy and the economic depression. More recently, different types of owners have acquired Scottish estates, including corporate bodies, overseas owners, and environmental organisations. [10] ( Fig. 26) Eight of these environmental organisations own a combined total of 202,391 ha or the equivalent of 2.6% of Scotland's land area. In addition, we have seen the emergence of local community land ownership, described in Part 4 of the Report. There are now around 19 community land owners owning over 405 ha, with a combined total of around 170,000 ha, or 2.2% of Scotland's land area.

Current and Future Trends in the Pattern of Rural Land Ownership

10 The likely re-concentration of land ownership which has taken place over the last 40-50 years is partly explained in terms of the ownership of good farmland, with, for example, about 75% of the farms sold in 2013 being bought by other farmers. [11] The activity of the Danish businessman Anders Povlsen, who has purchased six large estates in recent years (to become Scotland's second largest land owner with around 65,000 ha), has also contributed to this apparent re-concentration. This case also illustrates just how readily the re-concentration of ownership can occur. [12]

11 While Scotland's large estates sell for millions of pounds each, these prices are relatively small compared to the billions of pounds which some individuals and companies increasingly have at their disposal. Given the average number of estate sales each year, and the likelihood that a strong market would stimulate further sales, it is not inconceivable that a wealthy individual or company could quickly and easily become the biggest land owner in Scotland. Land is increasingly being regarded as a good long term investment, and the fact that the scope to build up substantial land holdings is generally much more limited in the rest of Western Europe, due to a range of factors, may well encourage increased interest in Scottish land. [13]

12 The Review Group is not necessarily anticipating 'a land grab', similar to the on-going, and well documented, activity being undertaken by corporations in some developing countries, which is culminating in a huge amount of land holdings being acquired by single companies. [14] However, there is currently no legal limit on the extent of land which one person or company can own in Scotland, which could potentially leave Scotland vulnerable to interest from wealthy individuals and companies and lead to a further concentration in the pattern of land ownership.

Understanding the Pattern of Land Ownership

13 As there are no government figures available, the above information on the pattern of landownership in rural Scotland from 1970 onwards relies on the work of a small number of independent researchers. [15] While these figures therefore lack the status of being official statistics, the research undertaken has become more and more robust, and crucially, has consistently shown the same pattern of land ownership. This overall picture of relatively few large private estates owning a substantial proportion of Scotland, is also supported in other studies. [16] More recently, this concentrated pattern of ownership was reflected in the House of Commons Scottish Affairs Committee's use of the figure '432:50', as shorthand for 432 private land owners owning 50% of the private land in rural Scotland. [17]

14 Given the Scottish Government's increasing interest in land reform policy, this situation regarding the lack of official statistics on patterns and trends within land ownership, is one which needs to be addressed as a matter of urgency. The Review Group notes with interest that Scotland is not only the European country with the most concentrated pattern of large scale private land ownership, but also the European country where least is known about the pattern of private land ownership. The need to accurately map out land ownership has already been discussed in Section 23, but it is important that this exercise fully reflects the fact that many of the larger private estates, are often management units rather than single properties. This is because different components of an estate may be owned through different legal arrangements as part of managing the estate.

15 Improved information is also need on the pattern of ownership of particular types of natural resources. An example is the very limited and poor quality information on the ownership of Scotland's woodlands and forests. Given Scotland's general pattern of land ownership, it is perhaps unsurprising that " Of 19 European countries in a position to provide statistics, Scotland has by far the most concentrated pattern of private forest ownership". [18] The Review Group considers that woodlands and forests are often particularly suitable for smaller scale and community land ownership, and therefore assembling accurate information on woodlands and forests, and other types of natural resources, would underpin efforts to create a more diverse pattern of land ownership in rural Scotland.

16 The lack of government information on the pattern of land ownership is also matched by the lack of research on this topic. Research is needed to better understand the full implications of different patterns of land ownership, and the socio-economic consequences of changes to that pattern of ownership. The historical experience of land ownership in Scotland is littered with examples of larger properties being sub-divided and changes of types of ownership, experience which would lend itself to such study. Research should also focus on the factors which influence changes in the pattern of ownership. A central requirement for the development of effective land reform measures is a greater understanding of the factors that influence the rate and nature of change, or lack of change, in the patterns of land ownership in Scotland.

17 The Review Group considers that the assembling of relevant statistical information and research is crucial to our understanding of patterns of land ownership in rural Scotland, and how they can evolve. The Group recommends that the Government should compile improved information on land ownership and undertake or commission more research into patterns of land ownership.

The Public Interest and Evolving the Pattern of Rural Land Ownership

18 As has been outlined above, the current concentrated pattern of large scale private land ownership in rural Scotland has evolved as a product of past circumstances. At present, the current pattern of ownership appears to have remained largely the same for the last forty of fifty years, or, if anything, become slightly more concentrated. How the pattern of land ownership continues to evolve in the future will depend to a large extent, on the specific policy objectives of the Scottish Government, and the impact of a range of factors including the suite of fiscal measures. Central to this is how we regard the public interest.

19 Leaving aside the observation that the pattern of land ownership in Scotland is clearly out of step with the much more diversified ownership patterns of our European neighbours, the Review Group considers that the current concentrated pattern of private land ownership is problematic for a number of inter-related reasons. Land is a finite, national resource. Ownership is the key determinant of how land is used, and the concentration of private ownership in rural Scotland can often stifle entrepreneurial ambition, local aspirations and the ability to address identified community need. The concentrated ownership of private land in rural communities places considerable power in the hands of relatively few individuals, which can in turn have a huge impact on the lives of local people and jars with the idea of Scotland being a modern democracy. The Group considers that a less concentrated pattern of land ownership would open up increased economic and social opportunities in many parts of rural Scotland, helping create stronger and more resilient rural communities.

20 The Group recognises that the nature of the terrain and land quality in many upland and Highland areas can be taken to imply the need for bigger units of ownership and management. However, the Group considers there is nothing inherent in the scale of the current pattern of larger private estates in Scotland. The land making up most of these estates was part of even larger estates in the 19th century and could be part of a less concentrated pattern in the 21st century.

21 The continuing scale of the concentrated pattern of private estates in some areas is illustrated by the map of the estate boundaries in the Cairngorms National Park ( Fig.22). The Park covers around 485,000 ha or 6% of Scotland's land area. Part of the Park is the upper catchment of the River Dee, running from the middle of the map eastwards. A survey in 1979 of the land owners in the upper nine civil parishes of Deeside, covering 155,000 ha or 2% of Scotland's area, showed that 95% of the whole locality was owned by 23 private land owners with 405 ha (1,000 acres) or more each. [19] As Fig.22 reflects, that pattern remains essentially the same 35 years later. While Upper Deeside includes large areas of high uplands and mountain land, the area is a substantial locality of over 500 square miles with several towns and thousands of people living in it.

22 The Group considers that concentrated patterns of private land ownership in localities like Deeside inhibit the development of the rural communities in these areas. This is not to say that private land owners with large estates are not interested in the wellbeing of local communities. There is clear evidence that many are, with recent reports providing examples of this. [20] The issue is the scale and degree of the control over the land use resources and the benefits from them, which is held by so few land owners and the extent to which, in the final analysis, land use decisions reflect their interests as the owners of the land. The Group considers that a wider distribution of this control amongst an increasing number of land owners would open up opportunities for improved economic and social development in these areas.

23 The degree of control in their own interests that large scale private land owners have over their estates, and the relatively limited accountability for their land use choices, contrasts with the position over public land in rural Scotland. This consists very largely of the widely dispersed National Forest Estate managed on behalf of Scottish Ministers by Forestry Commission Scotland, and the crofting estates owned by Scottish Ministers in the North-West Highlands (see Sections 13 and 26 respectively). This land is managed to deliver the public interest as represented by current public policy, including economic, environmental and social objectives. There can clearly be differences of view over how that is best implemented and particular issues arise, but the decisions involved are democratically accountable to the public interest. With local community land ownership, while the benefits include the control that it gives over the use and benefits of land to the people living in the area, the democratic accountability over decisions is another basic aspect.

24 One of the significant changes over the last 40-50 years, in the context of promoting a more diverse pattern of land ownership, has been the substantial increase in the number of people in Scotland with the knowledge and experience to own and manage rural land. Fifty years ago, this was still very largely the domain of estate owners and their factors and farmers. Now there are few residential factors or managers on the larger estates, and many of the private owners of these use the services of the main land management companies. There is no reason why, in terms of professional competence for example, local community land owners cannot manage substantial areas of land. The recent study of the economic impact of 12 of Scotland's largest community land owners since they become owners shows the substantial scale of the benefits that can be delivered by community land owners with their different approach compared to the previous management of these areas. [21]

Maximum Land Holdings

25 The Group considers that there is a scale at which the ownership of a large extent of Scotland's land by one private owner should be considered inappropriate, and contrary to the public interest. Many owners of substantial land holdings take their responsibilities to the wider society and the local community seriously and manage their land well. However, this should not disguise the fact that they do so at their own discretion and that the present arrangements provide limited sanctions against those who do not. This situation arises because of the degree of 'monopoly' control large land owners effectively have over land and other community interests, in ways that can determine the future of whole localities.

26 While this can be a problem in cases where the land holding is not particularly large, the risk of communities being at odds with decisions taken by local land owners becomes more serious as the area of the land holding becomes greater and the potential number of other local land owners correspondingly diminishes . The Group therefore considers that an upper ceiling on the overall extent of land that can be held by any one owner should be considered.

27 The largest private land owner in Scotland at present is Buccleuch Estates Ltd, with nearly 100,000 ha or just over 1% of Scotland's land area. The Review Group's concern here is not what an upper limit should be, but the principle that there should an established limit. The United Nation's Food and Agriculture Organisation's ( FAO's) 'Voluntary Guidelines on Responsible Governance of Tenure' includes the provision that " States may consider land ceilings as a policy option". [22] These Guidelines are supported by, amongst others, the G20 group of states including the UK.

28 In proposing an upper ceiling on land ownership, the Review Group considers that it should be based on preventing a single 'beneficial interest' exceeding the limit, so the measure cannot be avoided by an individual or single organisation simply using a range of companies or other legal arrangements to accumulate and hold land. The Group recognises that other wider issues also require to be taken into account; for example the need for greater transparency over the identity of the beneficial interests involved in the ownership of land in Scotland, as discussed in Section 5.

29 The Review Group considers that there should be an upper limit on the total amount of land in Scotland that can be held by a private land owner or single beneficial interest. The Group recommends that the Scottish Government should develop proposals to establish such a limit in law.

Increasing the Number and Diversity of Land Owners

30 The Review Group considers that it is in the public interest to increase the number and diversity of land owners in Scotland. The Scottish Government has also made clear the direction in which it considers the pattern of land ownership should evolve. In a written parliamentary response in January 2014, the Government set out that its " vision is for a fairer, or wider and more equitable, distribution of land in Scotland where communities and individuals have access to land"…"with greater diversity of land ownership" and "I million acres of land in community ownership by 2020". [23]

31 The Review Group believes that there is no one single measure which can achieve these objectives. Throughout this Report, the Group have suggested a number of measures which, if implemented, would have the cumulative effect of reducing the existing concentration of ownership of private land, and encouraging a greater number and diversity of land owners. These include areas such as the reform of succession rights, new community rights, increased land supply for housing, increased local authority powers, greater public sector led development and reform of crofting /tenant farmer rights.

32 The Review Group considers that the Scottish Government needs to clearly articulate its vision, and pull together the relevant recommendations within this Report as part of an integrated policy framework to implement that vision. The Group has already identified the need for the Scottish Government to have clear information on the pattern of rural land ownership, integrated with information on land use and supported by research to inform policy options. The Group considers that the Government should also be identifying policies that are contributing, or could be contributing, to achieving its vision for the pattern of land ownership.

33 The Review Group considers that the above proposals would provide the key elements in developing a National Land Policy for Scotland. [24] The development of a National Land Policy would recognise the fact that Scotland's land is a finite resource and of fundamental importance to the future of the country. It would also recognise, as this Report has reflected, that factors related to land ownership, land use, land values and land development are involved in a wide range of public policy areas. However, at present, there is no central focus on Scotland's land within the Scottish Government.

34 The Scottish Government's aim to increase the number of land owners in rural Scotland should be an integrated part of this national policy framework. As has been suggested, a range of measures can contribute to that aim, including support for increasing community land ownership. However, the Group considers that a central factor which is helping to maintain the current concentrated pattern of large scale private land ownership is the current fiscal regime of tax concessions on land and incentive payments for land use, and these factors are considered further in the next section.

35 The FAO Guidelines on Land Tenure referred to in paragraph 27 above, are part of the international context that should inform a National Land Policy for Scotland. The widespread occurrence of national land policies in other countries also means that there is considerable international experience in developing and putting in place national land policies, with the associated arrangements to monitor their effectiveness. [25]

36 The Review Group supports the Scottish Government's aim of " a fairer, or wider and more equitable, distribution of land in Scotland...with greater diversity of land ownership". The Group believes that this requires an integrated approach to developing measures which help deliver this ambition. The Group recommends that the Government should develop a National Land Policy for Scotland, taking full account of international experience and best practice.


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