BUYOUTS
The right to buy land was hailed as a people power revolution but as the debts pile up – and the taxpayers’ patience wears thin – worrying questions are being raised
ONE of Scotland’s highest-profile community buyouts is in danger of going bust and several more are under severe financial pressure.
The schemes – being hailed as the crowning achievement of the country’s land reform policies – are struggling to balance the books, research has revealed.
The buyouts involve communities receiving public help to purchase land from private owners.
Last week, residents of the Inner Hebridean island of Ulva, off the west coast of Mull, voted to pursue plans to purchase the land.
Much of the £4.2 million cost will come from the public purse.
But official accounts for previous buyouts show some are struggling to pay their debts and land is being sold off – back into private hands – to meet the bills.
The projects are also making a loss year after year and are reliant on funding from the taxpayer.
Hardest hit is the Assynt Foundation, which bought 44,000 acres in Sutherland in 2005.
Accounts for 2016/17 – published last week – show the project is struggling to stay afloat, with auditors warning there is ‘significant doubt’ over its future. The West Coast islands of Eigg and Gigha, and the Pairc estate on Lewis, also face problems, accounts reveal.
Last night, critics warned the land reform movement – being backed by millions of pounds of public cash – was in need of urgent review.
Matt Kilcoyne, of the free market think-tank the Adam Smith Institute, said: ‘Nurses in Nitshill [Glasgow] shouldn’t be paying higher taxes for the benefit of crofters on Ulva or busybodies on Mull. I certainly struggle to understand why Ulva’s owner shouldn’t be entitled to seek out a bidder that is comfortably able to afford to purchase and run the island. The Scottish Government appears to be picking winners not even on economic principle but based on class prejudice, and we should all worry about that.’
Ulva was put on the market by the Howard family, which has farmed the land since the 1940s and is opposed to a community buyout.
The island has no roads and is accessible only by ferry.
Land reform laws introduced in 2003 – bolstered by the SNP – give communities first refusal if their estate is put up for sale. In Ulva’s case, the North West Mull Community Woodland Company – which manages 1,700 acres of formerly state-owned forestry – is behind the buyout bid.
Locals on Ulva and Mull eligible to vote responded 163 to 91 in favour of the purchase. But the charity has said it expects to need cash from the taxpayer-backed Scottish Land Fund for the deal, with an online crowdfunding campaign raising only £23,000 so far.
In Assynt, the 2005 buyout of the Glencanisp and Drumrunie estates
‘Picking winners based on class prejudice’
by the Assynt Foundation charity was hailed as a major victory for the land reform movement, which seeks to take control of tracts of land from private owners.
Now, auditors have found the charity’s ability to pay its debts is underpinned by money owed to it by its own subsidiary company, which is also in the red.
A note on the latest accounts states: ‘These conditions... indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.’
Elsewhere, residents of Eigg last year celebrated 20 years since the £1.75 million community buyout, aided by an anonymous donor.
But accounts posted last month reveal a loss of £74,000 – the seventh consecutive year without a profit – despite an influx of £46,000 of public money.
Meanwhile, the Pairc Estate on Lewis lost £11,000 in its first full year of community ownership in 2016/17. The Pairc Trust’s annual report states ‘the charity is reliant on grants to employ two members of staff on a full-time basis’.
On Gigha, Argyll, locals are selling land and property to keep creditors on side.
Nationwide has issued a Reservation of Rights letter, which gives notice that its £902,000 loan may be recalled at any time. The building society is waiting to see whether Gigha’s new ten-year financial strategy, produced with the help of the Highlands and Islands Enterprise quango, can steady the ship before taking further action.
The Co-operative Bank called in its £839,000 loan to the isle’s renewable energy firm – which runs four wind turbines, three of them in need of an upgrade – but the hole has been filled by another lender.
Accounts talk of ‘trading difficulties’ and cutbacks, but in 2016/17 the community made a profit of £132,000 thanks to a bequest of £177,000. Elaine Morrison, Isle of Gigha Heritage Trust manager, said: ‘The corner has been turned. This was always going to be a difficult challenge and a breakeven point would be very positive.
‘We will never be completely free [of third party financial assistance] but we’re looking to reduce dependency – we won’t be spending money willy-nilly on crazy ideas.’
She added: ‘Are community buyouts deserving of public funds? Ask the people who lived through the era of private landlords. How do you place a value on wellbeing, security and a sense of control?
‘If, as a society, we believe that everyone in Scotland should be able to live in a warm, dry and affordable home, free from fuel poverty, then that costs money.
‘It’s relatively easy to maintain housing stock in Glasgow – which has mains gas – but here on the periphery, it’s a challenge.
‘We don’t want to take grants for everything and we are generating our own income. With empowerment comes responsibility and we are very determined to succeed.’
But not all buyouts are struggling. A community redevelopment of the defunct RAF Machrihanish air
‘How do you place a value on wellbeing?’
base in Argyll has 82 small businesses. Last year, the venture made a £200,000 profit.
Cultybraggan – a 40-acre Second World War prisoner-of-war camp owned by the MoD – was bought by locals in nearby Comrie, Perthshire, for £350,000. It is now home to thriving enterprises, a biomass district heating scheme, allotments, a visitor centre and an orchard. There are plans for sports facilities and four-star holiday homes.
The Scottish Government said: ‘We are determined to ensure all communities have the opportunity to shape their own futures.
‘The right-to-buy legislation is designed to help unlock their potential; island, mainland, rural and urban communities can all benefit.
‘Community groups making applications are required by law to demonstrate their plans are economically sustainable.’
No one was available for comment from the Assynt Foundation, Pairc Trust or the Isle of Eigg Heritage Trust.