The publicity last week surrounding a Common Grazings Committee being summarily removed from office by the Crofting Commission highlights a worrying trend concerning alleged abuse of power within the Crofting Commission. It is not the first time that I have heard actions taken by the Crofting Commission referred to as being “dictatorial, vindictive and unjustified“.
The facts appear to be that two shareholders in the Upper Coll Common Grazings lodged complaints with the Crofting Commission to the effect that the Grazings Committee were not conducting its duties in a proper manner. This resulted in the Crofting Commission calling a meeting of shareholders on 10 November 2015 where the Crofting Commission were represented by Colin Kennedy (Convener), I. G. MacDonald (Vice-Convener) and Linda Gourlay (Staff Member).
Following that meeting formal complaints were lodged with the Crofting Commission by a number of those attending accusing the Convener of “unfair and biased conduct” while chairing the meeting. It is unclear whether the complaints procedure involved was finalised/exhausted before the Crofting Commission removed the Grazings Committee from office.
The Crofting Commission gave the Grazings Committee three months to implement five main action points and a further month to get the last five years accounts externally audited.
All points requested of the Committee were dealt with including lodging timeously accounts prepared by external accountants. However, the issue appears to be the definition of “audited”. The grazings regulations of Upper Coll Common Grazings state that the Clerk shall arrange to have the accounts “audited” annually. In normal parlance that might mean simply having financial statements prepared by an external accountant as indeed most businesses do. A detailed and forensic audit would arguably be completely out of proportion for any Grazings Committee to be expected to carry out given the time and expense of such procedure. Furthermore, you are perhaps unlikely to find a firm of accountants in Stornoway able or willing to undertake such a task especially in the short time frame dictated by the Crofting Commission.
It is very interesting to note that in the Crofting Commission’s own Common Grazings Regulations Guidance [PDF] it is stated:-
A grazing committee shall undertake an annual independent scrutiny of their financial accounts. The committee should satisfy themselves that the level of scrutiny is proportionate to the value of monetary transactions.
Surely that means the preparation of external financial statements and not an expensive forensic audit? Furthermore the onus is on the committee to satisfy themselves not for the Crofting Commission to dictate.
However, the Common Grazings Regulations Template [PDF] provided by the Crofting Commission does not appear to even state the need therein for such an annual independent scrutiny.
The said Guidance on Common Grazings Regulations do make reference to the question of an audit. They state:-
Historically, the term ‘audit’ has been used loosely to describe any external scrutiny of accounts, however if the term ‘audit’ is used in the Grazings Regulations, the accounts must be audited by a registered auditor.
This appears to recognise the fact that ‘audit’ can mean “any external scrutiny of accounts” but then perhaps bizarrely states that “if the term ‘audit’ is used in the Grazings Regulations, the accounts must be audited by a registered auditor”. From what authority and on what basis can the Crofting Commission make such an assertion when at the same time recognising that ‘audit’ can mean “any external scrutiny of accounts”? Furthermore, why would they seek to insist upon this for historical Grazings Regulations using this term when their preferred template does not?
It is understood that the accountants acting for Upper Coll Common Grazings Committee sought guidance from the Crofting Commission as to what they wanted with regard to audited accounts. They were apparently advised that this was a matter between them and the Grazings Committee! With no guidance given as to what was expected how could they know what to produce to pass the muster of the Crofting Commission?
The Crofting Commission should perhaps have, at least, directed the accountants to their own Guidance on Common Grazings Regulations which state:-
… an auditor is required to build up a body of evidence and express an opinion on the accounts. The opinion given in an audit depends on the nature of the accounts that have been prepared.
• If receipts and payments accounts have been prepared, the opinion will state whether or not the accounts ‘properly present’ the receipts and payments for the common grazings for the financial year.
• If fully accrued accounts have been prepared, the opinion will state whether the accounts provide a ‘true and fair view’ of the financial affairs of the common grazings.
Surely, if Financial Statements prepared by accountants were produced that did not meet whatever requirements the Crofting Commission actually had with regard to an ‘audit’ they should have sought further information/detail as necessary rather than summarily removing the Grazings Committee from office?
It should also be noted that the said Guidance on Common Grazings Regulations states:-
The Commission will not get involved in any matter relating to alleged financial impropriety. This is potentially a civil and/or criminal matter and should be dealt with by the relevant authorities.
Thus if there is any question of alleged financial impropriety (and it is not clear that there even is) then it would be for any aggrieved shareholders to take civil and/or criminal action and perhaps only on the conclusion thereof, and depending upon the outcome, for the Crofting Commission to consider the removal of some or all of the committee and/or clerk.
On any view, therefore, the actions of the Crofting Commission in this instance are extraordinary.
Patrick Krause, Chief Executive of the Scottish Crofting Federation, has stated [PDF]:-
The press made us all aware of the grievance raised by the Lewis Upper Coll grazings committee against the convener of the commission, Colin Kennedy, a few weeks ago. On the face of it, this looks like an appalling attempt by the commission to nullify the complaint. Whatever is actually behind their decision, it is a staggeringly clumsy exercise in public relations. We are struggling to maintain, and to form new, grazings committees as it is.
Hopefully, this is not the reason behind the decision to remove the Grazings Committee from office. If it is then it is very worrying indeed. Whatever the thinking involved it does however remain worrying and should be of grave concern to all crofters and to the Scottish Government that the Crofting Regulator is behaving in this way.
The Crofting Commission’s ability under the Crofters (Scotland) Act 1993 to remove a grazings committee involves “making such inquiry, if any, as they may deem necessary”. Not much process potentially involved there then! However, they must be “satisfied” that the members of the grazings committee “are not properly carrying out the duties imposed upon them”.
On any reading of the situation it would appear that, at least without further inquiry to satisfy themselves, the Crofting Commission in coming to the decision to remove the Upper Coll Common Grazings Committee from office arguably took a decision so unreasonable that no reasonable person acting reasonably could have made it. This is the Wednesbury test (Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223) and that decision could therefore be open for judicial review.
If this decision was a correct and proper one to make there must be countless other grazings committees in breach of their own regulations whom the Crofting Commission should also now be seeking to remove from office.
I would strongly suggest therefore that the Crofting Commission should, in all the circumstances, review this extraordinary decision. If they fail to do so the Scottish Government should maybe question the behaviour involved and perhaps even consider removing the commissioners responsible as “unsuitable to continue” as members. A power that the Scottish Ministers have at their disposal under the Crofters (Scotland) Act 1993. That may be seen by many as a more reasonable and justified use of power than that employed by the Crofting Commission.