Land Reform and the Economic Recovery

Tomorrow afternoon (Tuesday 2nd June) the Scottish Parliament will debate the next economic steps in dealing with the Covid-19 pandemic.  This week too, the Scottish Government’s Advisory Group on Economic Recovery will begin sifting through responses to its call for views on how to enable Scotland’s economy to recover swiftly from the crisis and emerge in a stronger and more resilient state.  It scarcely needs saying that this is an unnervingly uncertain time to be living through as we collectively try to assimilate the social and economic aftershocks of the pandemic and the bewilderingly rapid pace at which our sense of normality has been cut from underfoot.

Against that dislocating background, the case for positioning land reform as a cornerstone and accelerator of economic recovery becomes ever more compelling.  That’s because the issues of how land is owned and used and, crucially, who benefits from these arrangements, are central to determining Scotland’s progress towards becoming a greener, fairer and more sustainable society.

There’s nothing particularly new in that insight.  The overarching argument for contemporary land reform – dating from the 1990s onwards – is that there are deep-seated structural problems with the concentrated pattern of predominantly private land ownership  in Scotland that act as barriers to the sustainable development of the nation as a whole and local communities in particular. These structural problems essentially revolve around the monopoly possession and exercise of power (economic, political and social) as it relates to land as a factor of production. Specifically, who has power; how it is exercised; and in who’s interests it is exercised.

The fundamental relationship between land ownership and use was confirmed by the Scottish Government-appointed Land Reform Review Group (LRRG) in its influential 2014 report, The Land of Scotland and the Common Good, which provided much of the impetus for subsequent legislation and other policy initiatives on land reform in Scotland to date.  It asserted:

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.”

More recently the Scottish Land Commission’s 2019 report on large scale and concentrated land ownership in Scotland connected land ownership, the related exercise of power and unsustainable development outcomes. It stated:

“There is no automatic link between large-scale land holdings 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 directly linked to land ownership.”

As defined by the LRRG, the land reform process involves “measures that modify or change the arrangements governing the possession and use of land in Scotland in the public interest”.  In essence, that entails making changes to three elements of Scotland’s land tenure system:  property laws governing land ownership (e.g.introduction of Community Rights to Buy); regulatory laws governing land use (e.g. changes to the land-use planning system; environmental designations); and non-statutory public sector measures (e.g. fiscal measures including taxation, grants, subsidies etc.) to influence how land is owned and used in the public interest.

Land reform has a crucial strategic role to play in ensuring that the economic recovery is a Green recovery; one in which the economic, environmental and social dimensions of sustainable development become mutually positively reinforcing to produce a step-change in pursuit of the UN’s Sustainable Development Goals.   Community ownership of land is a means to directly address the climate emergency whilst simultaneously generating a range of community and wider public benefits as a result of sustainable land use.

There is scope to enhance that capacity significantly through reforms to Scotland’s land tenure system which enable more communities to own land and generate income for community reinvestment as a result of delivering public goods and benefits (e.g. carbon capture) as a consequence of sustainably managing that land.  Similarly, the introduction of a specific Feed In Tariff Scheme for renewable energy production specifically for community-generated renewables (and ensuring provision of interconnector infrastructure throughout Scotland to enable export of surplus energy to the National Grid) would ensure that such investment remains in Scotland, enable the further development of Local Energy Systems, provide for community reinvestment of revenues and contribute to Scotland’s Net Zero emissions target.

Scotland needs a ‘Rural New Deal’ that tackles the economically damaging issues of concentrated land ownership and unsustainable demographic change in our rural areas head on.  Diversifying how land and other natural assets such as forests and marine resources are owned and used will help deliver the climate change mitigation and adaptation, affordable housing, employment creation, and population retention and growth that are essential to the sustainability of our rural places and to delivering wider public benefits.

There’s also a pressing need to ensure that the economic benefits from Scotland’s land resources are shared more equitably within rural and urban communities as a matter of social justice, while also ensuring that wider public benefits generated by these resources are safeguarded and promoted.   Applying a public interest test as regards the suitability of prospective private purchasers of land over a certain scale is one legislative option which would help address these issues.  It’s an option to which the Scottish Government has already signalled its commitment in principle.  Making more sustainable use of vacant and derelict land through community-led regeneration is also a priority for urban land reform in particular.

Beyond legislative change, Scotland needs a reconfigured fiscal system that proactively encourages land ownership diversification as a means of unlocking the full potential of rural and urban communities to both contribute to, and experience, a post-Covid economy that places fairness, sustainability and wellbeing at its heart.   There is merit in exploring the scope for introducing a Land Value Tax and other fiscal measures to reduce inflated land values in Scotland that impede diversification of land ownership and land use as routes towards place-making that links climate justice, community empowerment and sustainable development.  There’s also merit in exploring the scope for introducing a supplementary charge to the Land and Buildings Transactions Tax for private sales of rural estates over specific sizes, with the generated revenue being used in addition to support from the Scottish Land Fund to help finance community buyouts and provide ongoing development support to community landowners.

The emergence of community-led responses to the Covid-19 pandemic further reinforces the urgent need to re-localise the design and delivery of core underpinning elements of the economy including our food systems, energy generation and distribution, community health and social care services, and local transport provision.  That calls for new, more de-centralised governance arrangements with genuine community engagement and empowerment hard-wired into the process of shaping both the design and delivery of these  core economic elements locally.

The ‘Preston Model’ of community wealth-building offers one potentially fruitful avenue to explore how such reconfigured localised governance and delivery arrangements could implement a radically different vision of what constitutes ‘wealth’ at the local level, as measured against a more sustainable set of economic, environmental and social indices than those conventionally used to calibrate economic progress.  A vision in which that wealth is retained within (rather than extracted from) our urban and rural communities and distributed on a substantially more equitable basis than is currently the case.

Many community land and asset owners are playing a key role in the recovery of their local economies from the pandemic.  Some plan to set up incubation spaces for local businesses to support the recovery.  Others have been sourcing food locally, both for shops and for delivery to people who are shielding, vulnerable or self-isolating.  New connections are being made with local suppliers and some Community Trusts are now providing services to vulnerable and disadvantaged people in their communities.  This is resilience-building from the ground up.

These Community Trusts have been able to perform these crucial support functions precisely because, as local anchor organisations, they have the infrastructure and capacity to respond rapidly and effectively to challenges posed to their communities by the pandemic. In many cases that infrastructure and capacity has been developed as a direct consequence of their roles as land and other asset owners.   It’s crucial therefore that Scotland continues to invest in scaling up community ownership as a way of stimulating local economic development, resilience and community wellbeing.  Consequently, there’s a strong case for retaining the Scottish Land Fund with an increased budget of up to £20 million annually to consolidate and further expand its vital strategic function in facilitating more community ownership of land and assets throughout urban and rural Scotland.

The pandemic and its still unfolding aftermath has shone an unforgiving light on the structural vulnerabilities of the economy in terms of the resilience of particular industrial sectors, regional challenges in both urban and rural spatial contexts, ways of working and security of employment, and services provision.  There is clearly no ‘one-size fits all’ solution to these manifold challenges.  Nevertheless, achieving the ‘better’ (i.e. greener, fairer, wealthier) society calls for a focus on equity in the form of emphasising the needs of the least advantaged in society now (intragenerational equity) and on a fair treatment of future generations (intergenerational equity).  Land reform – encompassing changes to the ways in which land is owned and used in the public interest – provides a crucial foundation stone from which to tackle many of these structural problems and propel Scotland towards that better society focused on the common good. That requires bold and imaginative policy thinking, backed by the political will to seize the opportunity to set Scotland’s economic path towards a more sustainable future.  But time is short and ‘business as usual’ is no longer a credible option.