Investigation into the Issues Associated with Large scale and Concentrated Landownership in Scotland

Report by Glenn, S., MacKessack-Leitch, J., Pollard, K., Glass, J., and McMorran, R., for the Scottish Land Commission, published November 20 2019

The full report can be viewed here

Executive Summary

Concern about who owns Scotland, and how much of it they own, has been central to the land reform debate for decades. While many people are utterly convinced that landownership is a key determinant of rural development outcomes, others insist it is irrelevant, and what is important is how land is managed. The Scottish Government wants to create a more diverse pattern of land ownership and asked the Scottish Land Commission to investigate the issues associated with large scale and concentrated land ownership. In early 2018 the Commission did this by inviting people with experience of living and working in such areas to share their experiences.

The Call for Evidence

This was the first time such an exercise had been undertaken and the response was huge: more than 400 people took part. They were all asked the same questions: whether there are any benefits/disadvantages of land being owned by a very small number of people and whether they had experience of these benefits/disadvantages.

Most of the evidence provided related to one of six broad themes:

• Local economic opportunities

• Community and social cohesion

• The natural and built environment

• Local housing needs• Agriculture

• Land management

Local Economic Opportunities

The most frequently identified issues (40% of issues raised) related to the link between how land is owned and the ability of rural communities to realise their economic potential.

Most of the advantages identified related either to the value of private investment or economies of scale but the evidence to support these benefits was not clear cut. While private capital can (and does) play a transformative role in rural economies, the link between private capital and large-scale landownership is not automatic: recognising the value of the former does not imply acceptance of the inevitability of the latter. The evidence also suggested that outwith agriculture, economies of scale often appear to be more theoretical than real and more likely to benefit landowners than communities.

The economic disadvantages identified related mainly to landowner’s ability to restrict availability of land for business development. An environment in which businesses can access land for expansion and business owners have the confidence to invest is crucial to rural economic development. In areas of concentrated land ownership, landowners have the power to control this environment, deciding whether and on what terms to make land available. The extent of this control can have significant adverse consequences.

Community and Social Cohesion

The second most frequent theme within the evidence related to community and social cohesion. All of these issues related to negative experiences and more than half related to poor engagement between landowners and communities. Another significant issue was the imbalance in professional support available to many landowners compared to most communities and a feeling that landowners sometimes use this to gain an unfair advantage in negotiations. Similar concerns were raised about the ability of landowners to leverage influential personal networks to support their position.

Perhaps most worrying however, was the fear of repercussions from “going against the landowner” expressed by some people. This fear was rooted firmly in the concentration of power in some communities and the perceived ability of landowners to inflict consequences such as eviction or blacklisting for employment/contracts on residents should they so wish. Such fear is a clear impediment to innovation and sustainable development and has no place in a progressive and inclusive Scotland.

Natural and Built Environment

The ability to work at a landscape scale was the main environmental advantage associated with large-scale land ownership but the logic of this connection was found to be weak because, while there may be administrative efficiencies, large scale land ownership is not a prerequisite for delivering landscape scale environmental initiatives. The main disadvantages identified related to the perceived unilateral approach to decision making adopted by some landowners (often NGOs) and perceptions of poor land management practices that can arise from this.

Local Housing Needs

Around a quarter of respondents felt that Scotland’s current pattern of land ownership has a negative impact on the ability to meet local housing needs. These experiences were all connected by a common narrative in which the power of a dominant landowner to control the supply of housing was a key driver of depopulation and economic decline. While the direction of causality in this relationship is not clear cut and many landowners do appear to exercise their power responsibly, this is not always the case.

However, the housing related disadvantages identified were not solely related to land ownership. By helping to shape landowner expectations of land value the planning system also plays a key role in determining the nature and timing of residential development. This implies that solving the housing related issues identified through this research is likely to require changes to the planning system as well as land ownership.

The housing related advantages identified generally related to the role that some rural landowners play in providing privately rented residential accommodation. While such provision is recognised as an important component of some rural housing markets, it is not intrinsically linked to the current pattern of landownership.

Agriculture

The agricultural advantages identified mainly related to land ownership scale, where commercial viability was found to be closely connected to size. The disadvantages identified related largely to how changes in land use (particularly from farming to forestry) are managed and the ability of rural communities to influence and benefit from this change. These issues were particularly emotive and highlighted the strong attachment many rural residents feel to farming as a cornerstone of community life.

Conclusions and Policy Implications

Most of the advantages associated with Scotland’s current pattern of land ownership related to the size of landholdings and most of the disadvantages related to the concentration of social, economic and decision-making power. Scale and concentration are distinct concepts, and this has important implications for policy. The disadvantages identified were underpinned by concerns about the extent to which local people can influence decisions about how land is used and a belief that they often derive little benefit from these decisions. These conclusions echo the academic literature, which has emphasised the importance of the closely related themes of participation and power.

Scale Vs Concentration

There is no automatic link between large scale landholdings and poor rural development outcomes but there is convincing evidence that highly concentrated landownership, can have a detrimental effect on rural development outcomes. These effects arise because landowners have the power to decide who can access land, when, for what purpose and at what price. This power is created by the current system of private property rights and is therefore linked directly to landownership.

In some parts of Scotland concentrated landownership appears to be causing significant and long term damage to the communities affected. In the corporate world the risks of excessive market power are well recognised and mechanisms are in place to protect consumers. (The Competition and Markets Authority for example can intervene if a proposed merger is found to be a threat to competition.) In contrast, concentrated power in land markets is largely unregulated and few sanctions are available for irresponsible behaviour. It seems perverse that the kind of protection available to consumers across the UK is not currently extended to residents of some of the most fragile communities in Scotland. The policy implication flowing from this is that: There is an urgent need for formal mechanisms to be put in place that would enable harmful land monopolies to be identified and changes in either ownership and/or management practice to be implemented that would protect fragile rural communities from the irresponsible exercise of power.
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