Community Buyout

Proposed Community Buyout of Galson Estate

1.  FORMATION OF URRAS OIGHREACHD GHABHSAINN, GALSON ESTATE TRUST

1.0  Why do we need to form a new community organisation?
The Steering Group is a sub-group of Iomairt Nis Ltd and was formed as a time-limited group to investigate the potential and viability of a community buyout of Galson Estate.  The feasibility study is near completion and once the results have been fully disseminated a formal ballot will be organised to ascertain if the community wishes to proceed with a buyout.  To fulfil the requirements of the Land Reform Act it is necessary to form a new community organisation - a Company Limited by Guarantee - prior to the ballot.

1.1  What is a Company Limited by Guarantee?
It is a limited company, formed under the Companies Acts, and can be set up with powers to utilise the Crofting Community Right to Buy provisions of the Land Reform Act.  It has members rather than shareholders and, as a non-profit distributing company, the members cannot personally derive any financial gain; surplus funds are reinvested to further the work of the company.  Such a company, often referred to as a ‘trust’, can usually secure charitable status.  The Isle of Gigha Heritage Trust and The North Harris Trust are examples of community land-owning organisations with a Company Limited by Guarantee structure.

Limited liability:
The company is a separate legal entity from its members and can enter into contracts, take title to land/buildings and employ people etc, in its own name.  This affords its members the protection of limited liability.  In the event of things going wrong and the company having to be wound up, the risk to the members can be limited to £1.

Memo & Arts:
The constitution of the company is in two parts:-

1.2  When will Urras Oighreachd Ghabhsainn be formed?
Our solicitor, Derek Flyn of Macleod & MacCallum (Inverness), an authority on Crofting Law, is currently finalising our draft Memo & Arts.  They are based on The Pairc Trust’s Memo & Arts which was the first Company Limited by Guarantee set up with powers to utilise the Crofting Community Right to Buy.  We hope that the company will be formed within the next month or so.  Once formed, we will embark on a membership drive to recruit as many members as possible.

1.3  What will be contained within the Memo & Arts of Urras Oighreachd Ghabhsainn?
Forming a Company Limited by Guarantee with powers to use the Land Reform Act is legally complex as a range of specific requirements must be met.  The key information contained within our draft Memo & Arts is summarised below:

1.4  Who can be a member of Urras Oighreachd Ghabhsainn?
All those over 16 years of age who are either:

‘Resident’ shall mean:

1.5  Who can be a member of Urras Oighreachd Ghabhsainn’s Board of Directors?

The Board shall consist of not more than twelve Directors, up to ten of whom shall be drawn from the Trust’s membership and democratically elected by the members.  A third of the elected Directors will retire by rotation each year.  The Board can co-opt up to three Directors from out with the membership.  Co-opted Directors usually have specialist skills or experience deemed beneficial to the Trust and serve for a time-limited period.

1.6  Is there provision for Associates of Urras Oighreachd Ghabhsainn?

Yes.  The Board shall have powers to admit individuals, charitable bodies and other organisations as Associates.  Associates may attend General Meetings but as they are not members of the Trust, they are not eligible to vote or stand for election as a Director.  For example, the Board could invite the residents of Cross-Skigersta to become Associates of the Trust.

2.  CROFTING COMMUNITY RIGHT TO BUY - BALLOT

2.0  Who will have a vote in the community right to buy?

The Land Reform Act specifies that only members of the crofting community (as defined in 1.3.C) are eligible to vote in the ballot.  Membership of the Galson crofting community is quite distinct from who can join and become a member of the Trust.  All members of the crofting community must be given the opportunity to vote in the ballot, whether or not they have chosen to become a member of the Trust. 

2.1  Can a buyout proceed against the will of the croft tenants?

No.  A single ballot is organised, but to proceed with a Crofting Community Right to Buy application there must be a majority vote on two separate counts.  The first is a simple majority of all those who voted (crofter and resident votes counted together).  The second count is a simple majority of croft tenant votes only.  Thus, croft tenants effectively have a right of veto over the application.

The Steering Group was formed in November ’02 following a public meeting organised by Ness Community Council and Iomairt Nis Ltd.  The meeting was held to explore the potential of a buyout of Galson Estate and was attended by members of the community, representatives of Galson Estate, Calum MacDonald MP, Alasdair Morrison MSP, Simon Fraser, and a representative from the North Harris Trust and the Community Land Unit. 

The Steering Group operates as a sub-group of Iomairt Nis Ltd and has a remit to investigate the potential and viability of a community buyout.  Specifically, our role is to:

The Steering Group is a time-limited organisation and has no legal identity in its own right.  It therefore cannot make any decisions on behalf of the community, but will simply investigate the potential for a buyout and report back the findings to the community.  We meet on a regular basis and have held eleven public meetings to date.  When the project develops beyond the remit of the Steering Group we will arrange for a community company to be formed to further progress this initiative.

Members 

The Steering Group includes four Ness Community Councillors, three Airidhantuim Community Councillors, the Chair of Iomairt Nis Ltd and the Chair of Ness General & Galson Moor.  The membership is as follows:

The Community Land Unit of Highlands & Islands Enterprise is providing ongoing advice and guidance to the Steering Group members.

2. QUESTIONS & ANSWERS
 

Why are we considering a community buyout of Galson Estate?

Sustainability:  Land ownership can help deliver a range of economic, social and environmental benefits and thereby help sustain local communities. A community landowner will work to address local needs and will invest its revenue into initiatives to help regenerate the community as a whole.  Community landowners are directly accountable to the community and can also access public and lottery funding opportunities that may not be available to private landowners.

Windfarm:  Interest in a buyout was first prompted as a means to maximise community benefit from a potential windfarm development on Galson Estate.  As well as receiving the landowner’s share from the proposed windfarm, taking ownership of the land will put the community in control of this and all future developments on the estate. 

What happens if the current owners do not wish to sell?

It is hoped that the community will be able to negotiate a purchase with the owners as a willing seller.  However, if agreement cannot be reached, the community can use the provisions of the Land Reform (Scotland) Act 2003.  This gives communities in crofting areas the right to apply for Scottish Executive approval to purchase croft land, including salmon, sporting and mineral rights, whether the land is for sale or not.  The purchase has to be in the public interest and a fair price has to be paid. 

What are the implications of a buyout on crofters’ rights?

The existing rights of individual crofters will be unaffected by a buyout.  Tenant crofters will remain as tenants and will still be able to purchase their croft in the usual way.  Crofters’ rights are protected under the Crofters (Scotland) Act 1993, and these rights will continue if Galson Estate is transferred to community ownership.  From a tenant crofter’s perspective, a buyout will simply mean a change of landlord.

What is the current position?

·     Feasibility Study:  Following a competitive tendering process, in January we commissioned Strutt & Parker to undertake the feasibility study.  Strutt & Parker are Chartered Surveyors based in Aberdeenshire, and have extensive knowledge of estate management and windfarm developments.  The study is being 100% funded by the Community Land Unit and the Scottish Land Fund.  The feasibility study is still ongoing and the outcome will be shared with the whole community in due course. 

·     Legal Representation:  A successful application to the Community Land Unit has enabled us to engage the services of a lawyer.  Derek Flyn of Macleod & MacCallum (Inverness) is an authority on Crofting Law and will provide advice, guidance and legal representation on all aspects of our work.  A buyout is a challenging process and the Land Reform Act in particular is very complex, so quality legal advice will be essential should the community decide to pursue a buyout.

·     Buyout Co-ordinator:  We have already secured some funding from the Community Land Unit and are progressing a number of other applications to employ a temporary co-ordinator.  The post-holder will support the work of the group and we hope to be advertising the position shortly.

·     Discussions with Galson Estate:  The Chair and Secretary of the Steering Group met with the landowner and his legal representative, Simon Fraser, in February ’04.  The Steering Group requested the meeting in order to enter into constructive dialogue with the Estate and to explore opportunities for a suitable outcome for the crofters, landowner and wider community.  We explained that if an amicable solution cannot be reached the community may resort to the provisions of the Land Reform Act.

What is the next step?

In order to fulfil the requirements of the Land Reform Act, and to be in a position to enter into formal discussions with the Estate, it will be necessary to form a new community organisation to represent the community.  This must take the form of a Company Limited by Guarantee; a non-profit sharing company that has members rather than shareholders and where all profits must be re-invested into the work of the company.  Membership of the company, often referred to as a ‘trust’, will be open to the whole community and the membership will democratically elect the Directors.  Derek Flyn is currently drafting the ‘constitution’ of such a company and its formation will be discussed at the forthcoming public meetings on 20^th & 21^st April.

How can I have my say?

Community consultation is an integral part of the buyout process and there will be more public meetings, and information sheets like this one, as the project develops.  The results of the feasibility study will be made available to the whole community and the consultants will present their findings at a public meeting(s).  Members of the community can ask questions at any time.  If a buyout is considered a viable option, the community will be formally balloted on whether or not to proceed towards a purchase.  There is no obligation to pursue a buyout and it cannot proceed without the support of the wider community.