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The Prince, the Merchant and the Citizen -

The Need for a Strategic Approach to the Social Land Ownership Sector

Graham Boyd, May 1999, The Caledonia Centre for Social Development

Contents:

bulletIntroduction
bulletCountervailing Power and Civil Society
bulletMarket-assisted Land Reform for selected places and communities
bulletI participate, you participate, we participate, they profit
bulletKey Characteristics of the social land ownership sector
bulletThe size and extent of the social land ownership sector
bulletSpecial treatment and comparative advantages of the sector
bulletNon-profit distributing property associations
bulletPrinciples of organisational governance for social landowners
bulletSafeguarding social land ownership from asset raiders
bulletStand together
bulletFootnotes

Introduction

The Scottish Office in their 1998 consultation documents 1 on Land Reform specifically identify both the Public sector (the Prince) and the Private sector (the Merchant) as two important land sectors for which a range of policy options require to be developed.

They fail to identify and articulate the social or not-for-private profit (NfP) land ownership sector 2 (the Citizen) as a specific sector with particular challenges and policy requirements. However they do make passing reference to the different strands within the NfP sector such as CARTS 3 (Conservation, Amenity and Recreational Trusts), crofting trusts and community property associations.

The consultation documents then go on to determine that a very narrow definition of community of place within the confines of the boundaries of rural Scotland is the only community of citizens to which social land issues are of relevance. This neatly excludes the majority of citizens who are urban dwellers from the debate on social land ownership.

Land Reform becomes a rural development matter thereby removing it from the arena of public debate in which the citizen’s agenda of sovereignty, democracy, social justice and stewardship are the guiding principles.

Countervailing Power and Civil Society

Why do the Scottish Office consultation documents exclude the vast majority of citizens in Scotland from the Land Reform process?

Part of the reason lies in the way in which politicians, councillors and Public bodies have had difficulties since the early 1980s in corralling and imposing their agendas upon the large voluntary conservation, amenity and recreational organisations (National Trust for Scotland, RSPB, WWF, John Muir Trust, Scottish Wildlife Trust, Woodland Trust, The Ramblers and the Mountaineering Council of Scotland).

The membership of these organisations is mainly urban. They are predominately socially active middleclass persons many of whom provide these organisations with considerable resources, funding and support. This gives these voluntary organisations a degree of independence from government and has enabled them to articulate different agendas, many of which do not harmonise with the service delivery function and compliant policy role that politicians and Public Agencies seek to ascribe to voluntary sector organisations.

These organisations constitute a distinct social movement that is able to directly challenge, influence and countervail the prevailing wisdom of Public Agencies and Local Authorities on specific matters of concern to their members. This characteristic makes them no different from other civil society organisations such as the Scottish National Farmers Union, Timbers Growers Association, Game Conservancy Council and the Scottish Landowners Federation who for over 70 years have exercised significant influence on politicians and State Agencies on behalf of the landed elite and their specialist agents. Westminster politicians and the Establishment has found no difficulty in acceding to and working to their agenda. However the dynamics of civil society in Scotland have dramatically changed in the last 20 years.

The Land Reform, Freedom to Roam and National Park debates that have re-emerged in recent years have not been led and sustained by politicians, academics or the Establishment but by progressive civil society organisations. These organisations represent a sizeable element of Scottish society who have independently nurtured, researched and moved the agenda forward.

Market-assisted Land Reform for Selected Places and Communities

The Scottish Office in arriving at this arbitrary policy destination of community of place within the confines of the boundaries of rural Scotland have undertaken no review, assessment or historical analysis of the nature of current and past citizen involvement in land tenure and ownership issues. A 150-years of organised efforts in social land ownership are conveniently ignored because they reveal the key role that urban-based voluntary conservation, amenity and recreational organisations have played for the last 100 years. All this is set aside in favour of a number of recent high profile land cases such as Eigg, Knoydart and Assynt. Add to this a heady brew of journalistic stories about bizarre and maverick Lairds in the Highlands; sustained criticism of single purpose conservation fiefdoms for the Scottish turkey, parrot and primrose and the frothed up rhetoric of Quango kings and Highland political activism and the Land Reform debate becomes overtly focused on the fragile and peripheral North and West Highlands of Scotland.

This narrow and divisive orthodoxy of rural development focused on community of place has become the means through which the Scottish Office has devised a public sector cost neutral approach to land reform. The World Bank and the International Monetary Fund endorse this type of approach and call it market-assisted land reform.

The Scottish Office to make its approach affordable in a situation of decreasing State funding and where national investment priorities are in health, education and public services has invented the community right to buy as the means by which local groups in remote and fragile places can attempt to purchase land. To entice community groups along this policy track the Scottish Office has devised a funding strategy that combines limited State intervention, small sums of tax payers funds, money raised through public appeals with funds contributed by citizens via the lottery.

The State and its Agencies have knowingly set in train an exclusionary process of geographically targeted and market-assisted land reform, which seeks to marginalise the majority of citizens in Scotland once again from the Land of Scotland.

Government politicians, Quango kings and compliant academics are now spinning and talking up this policy as being radical and far reaching. Under the Scottish Office's current proposals to give communities a right to buy, a very small proportion of all land in Scotland will be affected. Estimates suggest that less than 5 percent of land may fall within this so-called radical land reform scheme.

The claim by the Scottish Office that a community right to buy will significantly empower communities and effect a rapid change in the pattern of ownership 4 is highly misleading. The Scottish Office proposals will do nothing to alter the underlying pattern of ownership and power with regard to the majority of land in Scotland. The large tracks of land in private ownership namely Highland sporting estates, Lowland mixed estates and land in private forestry will not be affected by the Scottish Office's Land Reform proposals.

I Participate, You Participate, We Participate, They Profit! 5

In recent years, political rhetoric and major Public policy rethinks have sought to capture the moral high ground of community as the big idea with a zero cost price tag. You sweat, you fund raise, you struggle, you burnout and they decide and take the credit! It fits the era of no tax rises, smaller government, the deserving and the undeserving poor, good causes as lottery winners and the market place as the new policy temple.

This re-discovery of community and community development as a way of working is emerging as a fundamental approach of both Central and Local Government sectors in the UK. The agenda is that all parts of society must embrace empowerment, participation and community. The motivation is to harness community initiatives and energies as the key stone for building sustainable and inclusive communities.

However the institutions of government, political structures and delivery mechanisms are not particularly participatory, gender sensitive, inclusive or empowering.

This new agenda is driven from above through centralised Public agencies and distant bureaucracies which operate to narrow Ministerial directives and managerial instructions that are locked firmly within the grip of civil service administrative rules and regulations. The term given to this type of participation is institutionalised participation, in which the State and its Agencies both decide and determine what the policies and the permitted actions will be. It is the hegemony of the State and its Agencies and is nothing less than elegant power dressed up as citizen's participation.

Concepts such as community involvement, participation, and empowerment are not a particular new set of ideas. They have been trucked around the developing world for the last 30 odd years by experts in the World Bank and United Nations - agencies with little real success.

This muddled thinking on community has now entered the minds of the wise persons who title themselves the Land Reform Policy Group. However in hitching themselves to the community of place banner they have done so with little research, knowledge or understanding of the social land movement and its 150 years of organised efforts. Such an opportunistic, narrow and exclusive approach to social land ownership is not good enough nor strategic enough to enable a Scotland-wide policy to be developed and the Policy Group and the Parliament needs to address the sector as a whole and not through piece meal actions focused predominantly on the community of place in rural Scotland.

Key Characteristics of the Social Land Ownership Sector

The social land ownership sector is characterised by diversity. It comprises a wide variety of non-profit distributing organisations. These can perhaps best be defined through their legal structures and constitutions as being organisations in which:

bulletAssets and profits (or surpluses) cannot be distributed to members whether on an ongoing basis or upon winding up (except for co-operatives and mutual associations where limited distributions can be made).
bulletA board, council or executive committee who is elected periodically by an equal vote of the membership governs the organisation’s affairs. The organisation is therefore accountable to a wider social grouping than is the case with a private-for-profit company or private family (executry) trust.

In addition social land ownership organisations are characterised by certain principles and ethical values. For example:

bulletMotivation is derived from social, cultural or environmental purpose
bulletIndependence from government
bulletA strong commitment to self-help, self-reliance, mutual assistance and service to others
bulletPersonal and voluntary participation of members
bulletMutual solidarity with other similar organisations
bulletA role in informing and educating its members and in some cases a wider public about issues it is committed to in civic society
bulletCharitable purpose and status is common

The Size and Extent of the Social Land Ownership Sector

Some 6 to 8 percent of all land in Scotland is in social or Not-for-Private-Profit (NfP) ownership. A key characteristic of this sector is its variety as a complex grouping of organisations. In the last 15 years this sector has more than doubled. There are about 50 NfP owners who manage some 600,000 plus acres. These organisations have a UK-wide membership of 1.2 million members and an annual turnover of 85 million.

They articulate in a very practical way the civic and ethical values of self-reliance, mutual assistance and service to others.

This is an agenda that policy makers, researchers and professional development workers call bottom up development. Over the next 10 years the NfP sector is likely to double the size of its ownership and this will make it larger than the public sector.

Special Treatment and Comparative Advantages of the Sector

Due to the variety of public benefits and special aids that these organisations receive (special tax arrangements with both central and local government, grants from government, private donations, grants and gifts from charitable trusts, and funding through the lottery system) it should be treated as a specific sector.

Other comparative advantages that the sector has are the role it can play in

bulletthe democratisation of land,
bulletevolving good practice in community governance,
bulletenhancing active citizenship and
bulletacting as a pathfinder for sustainable development by using its properties as demonstration laboratories.

 

bullet

Non-profit Distributing Property Associations

The term community has in recent years achieved a popularity of usage and multiplicity of applications that it is rendering the term almost meaningless. To overcome this increasingly loose use of the term the following three categories of community6 have been identified:

bulletCommunity of Place (township, estate, village, housing estate, etc)
bulletCommunity of Interest (crofting, forestry, birds, wildlife, mountaineering, etc)
bulletCommunity of Attachment (landscape, heritage or culture)

There are limits as to how far individuals from these differing communities can progress their ideas through spontaneous actions. This is particularly so in the sphere of social land ownership in which sizeable assets such as land, buildings, woodland and other legal rights – mineral, sporting, grazing and water – are involved.

To be able to operate in this sphere a more formal approach is required that makes use of legal structures that create a separate legal entity for the group in the form of a non-profit distributing property association. There are three route ways to creating a non-profit distributing property association, two of which use Government statutes while the third uses a legal model. These are:

bulletThe Companies Act 1985 and 1989
bulletThe Industrial and Provident Societies Act 1965 and 1978
bulletDeed of Trust

These legal routes enable the use of the following 6 models:

Under The Companies Act7

bulletA Private Company Limited by Shares
bulletA Private Company Limited by Guarantee
bulletA Limited Partnership

Under The Industrial Provident Societies Acts8

bulletCommon Ownership and Joint Ownership Co-operatives
bulletWorkers Co-operative

Under a Deed of Trust 9

bulletDeed of trust prepared by a solicitor

Principles of Organisational Governance for Social Landowners

There are seven principles of organisational governance that social land ownership organisations should strive to practice. These are:

  1. Voluntary and open membership
  2. [All those who qualify for membership must be allowed to join]

  3. Democratic member control
  4. [One member one vote]

  5. Member economic participation
  6. [Members contribute equitably to, and democratically control the assets and capital of the organisation. If shares are held there are limits to the amount a member can hold and limits are placed on any return on capital subscribed]

  7. Autonomy and Independence
  8. [If the organisation enters into agreements with other organisations, it should be on terms that protect the democratic control of the organisation by members, and protects the assets of the organisation]

  9. Education, training and information to members should be a principle of good organisational governance.
  10. Co-operation amongst social land owners and others in the social economy
  11. Concern for the wider community, environment and culture of the area

Safeguarding Social Land Ownership from Asset Raiders

Much of the land that has been acquired by the NfP sector cannot be disposed of on the private land market as it is held (gifted) in perpetuity. There is a need therefore to safeguard the long term interests of social and not-for-private-profit land ownership from being undermined by extreme individualism, opportunism and HM Treasury directives.

Land Reform legislation needs to protect the social land ownership sector from laws that empower individuals, legal bodies and State agencies from taking advantage of land and assets that have been purchased through Government funding, charitable donation and public appeal. There are therefore very particular issues that apply specifically to this sector, which the new Parliament will wish to examine, legislate for and support.

Stand Together

The re-emergence of land reform has not been the creation of the cut and thrust of debate between the political parties operating in Scotland. Neither should one place any great hope in the weak and ineffectual proposals of the Scottish Office Land Reform Policy Group. They are all part of a typical British Civil Service ploy of dulling down radical change by kicking the really important issues such as sovereignty, democracy, social justice and stewardship into the long grass. However, the bad news for politicians and pawkie civil servants is that land reform in Scotland is most certainly a civil society agenda to which politicians are now constrained to reply.

Civil society can with some pride trace its history of organised efforts in the fields of land reform and social land ownership back to the early attempts to establish club farms in the Highlands and the UK-wide Chartists Land Plan of 1846. In recent year this social movement has found ways of collaborating and standing together that will make it very difficult for politicians, civil servants and the Scottish Landowners Federation to apply their predictable divide and rule tactics.

With the establishment of the Scottish Land Reform Convention civil society has come of age. It has taken that vital but giant step of putting in place the necessary mechanism needed to challenge, evolve and exercise power in ways that engage and reconnect the people of Scotland with the land of Scotland.

The Scottish Parliament must now play its part and seize this historic opportunity to finally break the hegemonic power of the landed elite and bring forth popular land reform that truly delivers a programme of radical action. If the Parliament fails to meet the challenge it will find itself harried by Scottish civil society.

Footnotes:

  1. Scottish Office public consultation papers: Land Reform Policy Group Identifying the Problems, February 1998 and Land Reform Policy Group Identifying the Solutions, September 1998
  2. The Emergence of the Not-for-Private-Profit Land Ownership Sector in the Highlands and Islands of Scotland, Boyd. G, The Scottish Journal of Community Work and Development, Volume 3, Spring 1998.
  3. Not-for-Profit Landowning Organisations in the Highlands and Islands of Scotland: Organisational Profiles, Wightman. A, produced for Highlands and Islands Enterprise, Scottish Natural Heritage and the Highland LIFE Project, Inverness, December 1996.
  4. Countryside in Trust: Land Management by Conservation, Recreation and Amenity Organisations,
  5. Dwyer, J C and Hodge, I D, John Wiley, Chichester, 1996.
  6. Scottish Office public consultation papers: Land Reform Policy Group Identifying the Solutions, September 1998, p23.
  7. Adapted from a May 1968 French Student Poster.
  8. Community Initiatives: Patterns and Prospects, Peter Willmot, Policy Studies Institute, London 1989, pages 2-4.
  9. New Companies - Notes for Guidance, CHN1, Companies House, Edinburgh, July 1998.
  10. Guide to Constitutions and Charitable Status in Scotland, SCVO, Edinburgh, 1995 edition.
  11. Guide to the Specimen Constitutions, Alexander Stone and Company and Community Business Scotland, 1992.
  12. A Guide to Co-operative and Community Business Legal Structures, Industrial Common Ownership Movement, Leeds, 1995.
  13. Guide to Constitutions and Charitable Status in Scotland, SCVO, Edinburgh, 1995 edition.

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