Scottish Land Fund spent millions on publicly owned assets

The Scottish Land Fund, set up to help community buyouts, is heavily skewed towards a few local authority areas and has spent millions on buying assets already in public ownership, analysis for The Ferret has revealed.

Now Scotland’s best-known land-reform campaigner Andy Wightman – a founding committee member of the Scottish Land Fund – has called for an in-depth review before any renewal of the fund. The current £50m pot expires next year.

His call comes after analysis showed more than a quarter of the grants for buyouts from the fund went to the Argyll and Bute area, and more than £5m was spent on publicly owned assets.

The fund, set up in the wake of the land reform movement, has met widespread approval from groups buying property for communities.

The Scottish Government says renewing it will be a matter for parliament after May’s elections. Umbrella group Community Land Scotland (CLS) has led calls for renewal, suggesting doubling its value.

But Scottish Green MSP, Wightman, said: “Before committing millions more in public money to a fund, there needs to be a fundamental review as to what this fund is for, what it’s trying to achieve and how it’s going about achieving this.”

The figures show £8.71m of the £32.63m handed out for buyouts going to one local authority area – Argyll and Bute. With a population of around 86,260, that amounts to £100.98 per head of population. Orkney is second in the table of biggest benefits, with £58.56 per head from  £1.3m awarded. Highland got £5.87m, or £24.87 a head, and Dumfries and Galloway got £2.43m or £16.31 a head.

Glasgow got nearly £2m but with over 600,000 people that works out at £3.18 a head, while Edinburgh got less than half that per head. North Ayrshire got 38p a head while five council areas – Dundee, Falkirk, East Dunbartonshire, West Lothian and East Renfrewshire – had no cash for purchases.

Approximately 50 of the properties bought appear to have already been in public ownership – including town halls, schools and tourist information centres, police stations and forestry land. A total of £5.3m was spent on such deals.

Among grants to buy public property is the £405,903 to buy a former police station and surrounding land at Dornoch in the West Highlands. Dornoch Area Community Interest Company is to turn the property into a business hub, gym, workshop space and accommodation.

The Dronley Community Woodland in Angus got £394,000 to buy 120 acres through the Forest Enterprise Community Asset scheme, which allows local groups to acquire Forestry and Land Scotland (formerly Forestry Commission) Land.

The same scheme also sold 30 acres – discounted at £38,500 – to Minginish Community Hall Association on Skye. The deal has allowed a car-park extension to cope with the huge number of visitors to the Fairy Pools in Glen Brittle, with no public body stepping in to provide the facilities.

Public assets

Wightman, Community Land Scotland, and the chairman of the fund committee itself have all questioned using the fund to buy already public assets is the best use of the cash.

The Ferret’s analysis also reveals the fund has become primarily a buildings fund, rather than a land fund. Almost £18.6m was for buildings and building plots, while just over £14m was for land.

The original Scottish Land Fund was started in 2001, with £15m National Lottery cash. Wightman was on the grant making committee when it launched until it ended in 2006.  In that time it backed 117 projects, which bought 172,000 acres and 67 buildings.

The SLF was renewed in 2012 for four years, with £10m Government cash for community buyouts. The current fund, open to both urban and rural communities, was then established in 2016 with £10m a year from the Scottish Government for five years. It ends in May, with final applications considered in November.

The two remaining rounds of grants in 2020 will max out this year’s £10m limit, with 32 applications seeking near double what remains in the pot. With £3.5m in administration costs, more than £5m of the fund over the five years was unspent. Leftover cash, and any returned by groups unable to secure a deal, returns to the Scottish Government each year.

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Wightman, a Scottish Greens MSP and the party spokesman on land reform, believes there is a clear need for the fund in the future, but said any new money must be better targeted to ensure public value.

He suggested having part of the fund in the hands of Scotland’s 32 local authorities could ensure wider distribution. The fund could also proactively seek out communities in need across Scotland and suggest projects for them.

He said: “The fact that there is geographical disparity is an issue. One should never have a fund of public money that goes on for years and years without being fundamentally reviewed, and questioned as to what the money is being spent on, where it’s being spent, and could it be better allocated… A review needs to see whether the benefits that have accrued to places like Argyll and Bute could also accrue to other parts of Scotland.”

He added: “What you’re trying to do is make sure the benefits [the SLF] is capable of delivering are not disproportionately gained by the better-off in society.”

And he said there were alternatives to the use of government cash for communities to buy government property.

“There is a strong case for … not using public funds to provide communities with the [cash] to buy public assets. I think there’s a case for that but I also think there’s a case for looking at alternative mechanisms for allowing greater community involvement in public assets and that might mean for example just awarding long leases on peppercorn rents.”

Community groups, Wightman suggested, should be able to acquire public assets at below market value, or even for nothing.

He believes a major consideration is inflated land prices, such as the £4.5m deal for the island of Ulva, near Mull, with £4.4m from the SLF in 2018. Like all buyout prices it was based on independent valuation, but Wightman believes using investment criteria – what rate of return you could expect from the property – a realistic price would have been around £1m for 5000 acres.

“I would question whether a fund of public money that goes straight to landowners – through the community organisations and out the other end into the bank accounts of landowners – is the best way to facilitate more community ownership of land,” he added.

To reduce prices he suggests land taxes to make big estates more of a liability, and residency rules to rule out wealthy foreign buyers.

With lower prices some SLF cash could become investment loans, with small interest payments feeding back into the fund to make it self-financing, he said.

Calum Macleod, policy director for CLS, believes it is vital the fund is renewed and wants it to be increased to £20m a year. He said it didn’t matter if properties bought were land or buildings because the land reform debate had moved on, and the coronavirus pandemic had shown communities with property assets were better at helping themselves in a crisis.

“A big part of the reason [for that] has been because they have that organisation, that capacity in place that ownership has been able to provide for them,” he said.

He suggested uneven regional distribution of the fund could be improved by bringing the idea of community assets into the mainstream, helping convince more urban communities and others to apply for cash.

‘Question of effectiveness’

John Watt, the chairman of the committee which makes grants from the Scottish Land Fund, said most of the public assets were already sold at a discount, but he suggested using SLF cash for such deals was an area for concern.

“The question of the effectiveness of one public body paying a community to pay another public body is something that probably would require being looked at in a bit more depth,” he told The Ferret.

He said there was no question funding building purchases was right, and he claimed other mechanisms would be needed to change the balance of land-holding in Scotland. He added:  “The SLF is restricted to £10m a year and with land prices even in remote and rural places being what they are it doesn’t buy you many acres.”

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In reference to geographical spread, he claimed grants were based solely on the nature of the project, without any consideration of where they were. He said: “We judge the projects on their strengths. Argyll and Bute, for whatever reasons, has been a hotspot. We do try to identify cool spots and we have had promotional efforts in some of those cool spots. But we don’t force people to buy land.”

A Scottish Government spokesperson said urban areas, which could apply for grants from 2016, projects are more likely to involve buildings. They added: “The fund is a demand-led fund with each project assessed on its own merits by an independent committee.

“Promotion of the fund, and wider community ownership, is carried out by the Scottish Government and support organisations including Development Trusts Association Scotland and Community Land Scotland, in a variety of ways to ensure funding and support is accessed by a wide and varied range of projects from right across the country, from both urban and rural areas.”

The Scottish Labour Party says it would renew the Scottish Land Fund and agrees with increasing it. The LibDems in Scotland have also backed renewal.