Power in the land
The Scottish Land Commission is taking a serious look at both rural and urban land issues and forming radical ideas in relation to both, as the Journal hears from chief executive Hamish Trench
Diversity of landownership; social justice; a fairer society. These concepts, appearing in its guiding principles, help set the tone for the work of the Scottish Land Commission, set up to shape policy regarding the ownership and use of Scotland’s land. That has long been a contentious topic – but what agenda does the Commission have, and what does it mean for holders of rights in land?
One thing the Commission does not see itself doing is taking sides on the arguments. So asserts its chief executive, Hamish Trench: “The positive thing about the Commission is that for the first time we have a body in Scotland that is charged with taking a proper strategic look at this. We’re clear that our job is not to be on any side of a particular argument; it’s to look at how we are to make more of Scotland’s land, because what we are fundamentally concerned with is the productivity of land in Scotland.”
The Commission has indeed been given a clear direction of travel, set out in the Scottish Government’s land rights and responsibilities statement which, as Trench puts it, sees landownership “through the lens of human rights”, and land as a fundamental resource to be used for the common benefit. But “that’s entirely in line with looking at land in terms of economic productivity, in terms of its cultural value, social value, so that’s what our work is about, it’s looking at the public value of land and the broadest interest”.
Initially a chartered surveyor and land agent, the chief executive came to his post soon after the Commission began work in April 2017, following senior roles at the Cairngorms National Park Authority – “a good example of a microcosm of many of the land use challenges and problems”, he observes. “It still feels to some extent a relatively new organisation in terms of the Scottish policy landscape, but equally it feels like we’ve become quite well established and have a fair bit of momentum over that time.”
The Commission has not been idle. At time of writing, it has posted more than 25 different papers to its website, comprising discussions, briefings, commissioned research studies and recommendations relating to both urban and rural land use – importantly, it would be quite wrong to think of it as only concerned with large rural landholdings. One in particular caught some media attention earlier this year – a report containing the results of its investigation into the impacts of large scale and concentrated landownership in Scotland, with recommendations to Scottish ministers.
Having found that concentration of ownership is hampering economic and community development, its initial proposals include a public interest test for significant transfers of land, and a requirement for a management plan, alongside promoting more diverse private ownership and local engagement in land use change.
They perhaps show how the Commission can bring fresh thinking to the subject. “The key finding for us is that it’s not so much the particular scale of an individual landholding that matters, but the power of decision making that goes with ownership,” Trench explains. “That’s why our recommendations focused for example not on capping the area of land that any individual can own, which many have suggested in the past, but instead on the appropriate public interest that revolves around the power that goes with ownership.” That power can affect decisions relating to housing provision, business development and community development. “So given that concentration of power inherent in the pattern of landownership, it’s only reasonable that we have appropriate public interest safeguards as we do around power in other sectors of the economy.”
For Trench, many of the answers to the challenges highlighted are about “governance of landownership” – looking at how to ensure that the public interest and community interest are taken into account. “It’s clear that community ownership will be an answer in some parts of Scotland, but we made clear recommendations to Government last year that community ownership, though it is an important part of the land agenda, is not the answer to every land reform question. Community ownership needs to become seen as a means to development and regeneration in a way that is right for a particular community, but we need a vision of a diverse and dynamic private ownership sector alongside community ownership.”
Also significant were the findings in the scale and concentration study that the core issues (including the power associated with decision making) are similar regardless of the nature of the landowner. “Don’t forget that Government itself is a huge landowner in Scotland,” Trench points out, “and the expectations around land rights and responsibilities obviously apply across all types of landowners, so one of the things we can do is help those sectors reach across and learn from each other, because there are lots of examples of good practice happening.
“We’re starting to do that with things like community engagement, where there are some great examples across all sectors. I think there is scope for Government to take a really strategic approach to looking at how the publicly owned estate can help stimulate both community ownership in the right places, and also look at how to engage the community in decision making.”
In light of these conclusions, ministers have tasked the Commission with developing some firmer policy options to address the concentrated power of landownership, “so in the next 18 months to two years we will be working further with landowners, wider stakeholders and Government colleagues to look at how these recommendations can be developed into practical policy proposals”.
The Commission appears still open to persuasion, then. “The vision fundamentally is a more diverse pattern of ownership and there are actually all sorts of ways to get there. A big part of it is about greater involvement and engagement... If we’re focused on how we actually make more productive use of land, I think naturally that will lead to some ownership changes. Community ownership is a big part of that, but as I said it’s only one part, so this is about moving to a more dynamic way of how our land is owned and used.”
Can landowners be persuaded to buy in? “I think landowners have a hugely important role to play in shaping this change. It isn’t something that is happening to landowners, it’s about change of culture within our overall approach to landownership and land use, so landowners are in an important position to actually think about how the principles set out by the Parliament can be turned into practice, and we have a job to support that.
“We’re looking at a number of practical measures that we can put into place. We published for example the first land rights and responsibilities protocol on community engagement; one of the things the Parliament has been really clear about is that it wants to see a step change in the way people are involved and engaged in decisions about land. Now that’s a strong principle, but the challenge is how to turn that into practice, what’s realistic, what’s expected behaviour. That’s where we need landowners to look at different scenarios to understand what ‘realistic’, or ‘good’, looks like in practice.”
The Tenant Farming Commissioner is a member of the Commission, and Trench believes lessons can be learned from the way he operates. “There are some strong parallels both in terms of relationships being core, but also the approach of using mediation to resolve issues and some of the wider lessons around codes of practice. We’re looking also at how we can release land for new and developing businesses in the agricultural sector, and increasingly that’s pointing to working with a wider range of joint venture vehicles rather than relying on traditional agricultural tenancies.”
Turning to urban Scotland, important indications of the Commission’s thinking can be found in a blog by the Commission’s head of policy, Shona Glenn, and another Commission paper entitled Advice to Scottish Ministers on Options for Land Value Capture. In summary, a fundamental rethink is needed of Scotland’s “speculative and market-driven approach” to identifying and allocating land for development, with in the long term a more collaborative approach, and a sharing of risk and reward, between public and private sectors. There are no quick fixes, but we need to get better at using the planning system to shape land values, reducing the gap between market and existing use value, through a serious look at how land is allocated for development with the public sector taking a more proactive role, enabling value to be created that would not otherwise exist.
“The agenda in relation to urban Scotland is driven by the same things really,” Trench explains: “the desire to make more use of the core asset of land and to take a more strategic look at how that helps deliver what people are needing. That comes to the fore obviously in relation to housing. One of the biggest challenges we face in Scotland is providing enough good quality housing in the right place and at the right price. The land market has a crucial role to play, and that’s the bit of the system that we as a Commission are looking at.”
How would development value be brought under control in that way? “It’s about engaging people’s expectations and being realistic about how we can shape some of that change. There is huge value inherent in land and particularly development land, and there is no doubt that we can make better use of that value for our collective interest in helping invest in infrastructure to help make development happen. The question is, how do you get the right balance between public and private interest and what is a fair share between those interests of that development value, and that’s really what our current work looks at.”
Isn’t the present system designed to have development plans and strategic goals? Where does it fall short?
“At the moment, if you compare it internationally, the Scottish and UK system has a high degree of flexibility in it. Although we have a clear hierarchy of development plans, there is still a great scope for speculation, which means essentially that land values aren’t crystallised until very late in the process. Comparing that with Europe, they often have a much more plan-led system that creates certainty and fixes the land values much earlier, and that allows the public and private sector to collaborate on the basis of knowing what value they are dealing with, so in Scotland we face a choice between how much flexibility versus how much certainty we want in the system. And that’s something we will need to think about collectively over the next few years.”
In addition, the public sector should be taking a more proactive role in major development where there is no significant land value to capture. “You can see a really good example in Dundee Waterfront, and that shows the value of the public sector accepting more of the risk and being more involved in long term development to deliver things that wouldn’t otherwise happen.”
He continues: “Part of the whole purpose of this is how you use the value to underpin a much wider approach to regeneration and development where the market alone wouldn’t deliver that. This is where an element of realism comes in, because this debate is often had by people who expect there is a pot of gold that we can simply capture and take for the common benefit. Actually we need to be realistic about land values, and across much of Scotland there is relatively low inherent development value, which is precisely why we need the proactive role of public agencies to help create that value. It’s not simply there for the taking.”
That would involve significant investment of public money, but that is very much in line with wider Scottish Government thinking about the potential role of the Scottish National Investment Bank. “This does require investment, but then it’s investment that sees a long term return.”
The relevance of much of the Commission’s work to the interests of practising solicitors, and more especially their clients, is obvious, and the Commission already engages regularly with the Law Society of Scotland. “Conversations have focused both on the urban issues around land values and land markets, and we will continue to engage much more to cover areas like potential long term changes in the housing market for example, and then on the rural side as well in relation to developing work around landownership and land use decision making.”
Trench adds in conclusion: “One interesting area that we really took on board is the relationship between regulation and good practice. There’s an awful lot that can be achieved through leadership and regulation in practice which naturally goes further than the legislative requirements, and that is a big opportunity to work together.”