Wealth funds could be created to ensure Scotland’s communities benefit from a new boom in land sales driven by the rise of “green lairds”, we can reveal.
Hamish Trench, chief executive of the Scottish Land Commission (SLC), said that the “option” of establishing community funds was being considered as part of work to draw up policy recommendations in response to the soaring demand for estates.
In an exclusive interview, the boss of the Inverness-based organisation also outlined other ideas, including developing “mixed governance models” for land, which bring together private sector, public sector and communities in a “joint ownership” structure.
The plans are being discussed amid growing concern that communities will be priced out of owning and benefitting from local sites as result of the burgeoning interest from so-called “green lairds”.
The term has been used to describe businesses and others seeking to off-set their carbon emissions and take advantage of government grants by buying land for initiatives such as tree planting, as well as others who are focused on investing and generating returns through trading in carbon credits.
Looking to the longer term, one option is that this could be the basis for community wealth funds, and reinvesting some of this value in local economies and communities.”
Last week, we reported that fresh fears had been raised about the trend after Standard Life Investments Property Income Trust (SLIPIT) announced it had spent £7.5 million buying 1,447 hectares of upland rough grazing and open moorland in the Cairngorm National Park, to be “used as part of the company’s carbon strategy”.
It follows plans from craft beer giant Brewdog to create a “lost forest” at the 9,300-acre Kinrara Estate in the Cairngorms to offset carbon produced at its brewery.
Mr Trench said the SLC was focussed on this “rapidly developing influence on the land market”, and was aware that it brings “risks and opportunities”.
He said: “My view is that generally this is a potential win-win for Scotland, in that there is an opportunity here, we know our land use can deliver the big change we need for our climate objectives, we know the finance is out there to bring the investment in to do that.
“So the big question is to make sure we do that well and to make sure that the benefits of that are felt widely.”
Mr Trench said the first job, which was under way already, was to identify the scale of the influence on the land market, because many transactions are carried out privately.
He said the SLC would also be working with landowners, agents, and investors, to “look at responsible practice”.
“There’s no reason already why we shouldn’t be looking at ways that deliver community benefit, through this investment,” Mr Trench said.
“That doesn’t need to wait for a legislation change or policy – there’s a good opportunity now to actually develop models like this that deliver community benefit and bring communities into the decision-making as well.”
Community wealth fund
As well as work already under way, Mr Trench said longer term policy recommendations were expected to be developed over the next six months.
Asked if a Norway-style wealth fund could be considered, he said: “Yes, I think that is an option.
“Fundamentally this is a shared national resource that we’re looking at here, in terms carbon and natural capital values.
“Looking to the longer term, one option is that this could be the basis for community wealth funds, and reinvesting some of this value in local economies and communities.
“There’s learning from what we did and didn’t do back in the oil and gas sector.
“Obviously in more recent history, in terms of renewables, there has been more formal mechanisms for community benefit. So again, there is learning from that.”
Mr Trench confirmed there was an “option” of using taxation to create such funds.
He also spoke of the potential to “reinvest value to help communities acquire ownership directly”, as well as joint ownership models, which were being investigated closely.
“That’s somewhere where we can see quite a bit of potential,” he said.
“If you look internationally, Scotland is actually quite unusual sometimes in thinking about our land ownership as being very strictly either private, public or community.
“What you often find in a lot of other northern European countries is that those sectors are much more mixed.
“So we see quite a lot of scope for joint ventures and mixed governance models, that bring the communities with the private sector and the public sector together in different ownership structures.”