Tag Archives: Patrick Krause

Abuse of power within the Crofting Commission?

Abuse of Power within the Crofting Commission

Is there an abuse of power within the Crofting Commission?

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.

Brian Inkster

Setting the Agenda for Crofting Reform

Setting the Agenda for Crofting LawAhead of the Crofting Law Conference in Edinburgh today The Scotsman have published an article with the headline ‘Crofters to lobby for key changes to ‘complicated’ laws‘.

They quote Patrick Krause, Chief Executive of the Scottish Crofting Federation, as saying:-

Crofting law is notoriously complicated and the waters have been further muddied after the 2010 Crofting Act.

Crofting is unique in Scotland by having its own legislation and being a regulated system. It is therefore is essential that the legislation is fit for purpose.

The act needed cleaning up before the 2010 changes. This is unfinished business.

Unfortunately the 2010 introduced further errors and anomalies. The Sump gathered 126 of these and probably the only way to address them is with a new act.

Politicians are a bit reluctant to do this, but SCF is asking parliamentary candidates to finish the job.

And they also quote Brian Inkster, in his capacity as Hon Secretary of the Crofting Law Group, as saying he hopes today’s conference will set the agenda for crofting reform by the next Scottish government. Brian told The Scotsman:-

On Monday I will be spending much of the day arguing before the Scottish Land Court the significance of the Crofting Reform (Scotland) Act 2010 having deleted the word ‘or’ in a section of the Crofters (Scotland) Act 1993.

The result could be an unintended consequence. This is a good example of the problems that the 2010 Act has been causing since its introduction. It was an extremely badly drafted piece of legislation on top of existing complex law.

There remain numerous problems and issues in the legislation that can trip up the unwary on a daily basis. The current government pledged to resolve matters, and the next government really must seize the bull by the horns and sort the mess out once and for all. That will involve a comprehensive new crofting act that is well drafted, easily understood and designed to resolve the existing problems and not create any new ones.

MSP Alex Fergusson has referred to recent crofting legislation being like the Hydra. You think you have solved a problem but suddenly two new ones appear. The next Scottish government simply can’t afford to let that happen again.

We will provide a full report on today’s Conference after the event.

Common Grazings and the Lewis Gathering

Crofting Federation GatheringI was in Stornoway, Isle of Lewis, on 19 and 20 September 2013 for the Scottish Crofting Federation’s annual Gathering. The theme of this year’s crofting conference was Common Grazings: Utilising Potential.

The conference was ably chaired by Derek Flyn and well organised by Patrick Krause and his staff from the Federation. A good and diverse range of speakers made for a very interesting and enjoyable conference. I am not, in this review, going to cover all the talks that were given but will focus on those that had a crofting law aspect as this is, after all, a crofting law blog.

Paul Wheelhouse MSP, Minister for Environment and Climate Change, should have been the keynote speaker but parliamentary business detained him in Edinburgh and his place was taken by David Barnes, Deputy Director of Agriculture and Rural Development.

David told us that the Crofting Commission has a focused not diminished role. Some, I would suggest, might argue with a focus in the wrong places!

Over 80 new crofts have been created in the last 5 years. Mention was made of crofters being allowed to be absent with good cause. My experience does not bear this out. But then my view of good cause may be quite different from that held by the Crofting Commission.

The Scottish Government were disappointed by the number of voluntary registrations on the Crofting Register. Not that surprising. Apart from a token discount for community registrations there was no real incentive to do it voluntarily.

Crofting Federation Gathering (Fair Isle Bunting)

David Barnes referred to the “specific and acute problem” with the 2010 Act that created a flaw in decrofting procedures and resulted in the 2013 Act to remedy that. The Scottish Government were very aware indeed that this is far from being the only issue with crofting legislation. They will be carrying out a consultation later this year. They need to take their time. Owner-occupiers who are not owner-occupier crofters and cannot decroft without the consent of neighbouring landowners may take a different view about the need to take any more time over that particular issue.

On the question of what form legislative reform might take David Barnes asked: “Do we look for where holes are and put patches on them or do we have a root and branch rewrite?” This question is one that is likely to tax MSPs in the coming months (or years perhaps depending on how much time will actually be taken over it).

My own view is that there are pressing issues that need be dealt with sooner rather than later and others where time can be taken. We may need at least two Bills: one within the next year (patching holes) and a more comprehensive one (possibly a rewrite) to follow in the fullness of time.

Julia Aglionby from the Foundation for Common Land told us of some of the differences between Scotland and England & Wales. In England & Wales a shareholder is a commoner. In England & Wales all renewable payments go to the landowners and none to the commoners. Compare crofting shareholders in Scotland who receive 50% of those payments. Less than 5% of common grazings in Scotland are signed up to schemes to assist them. In England more than 80%. Why? We didn’t get any clear answers.

John King of Registers of Scotland gave an update on the Crofting Register. There are 300,000 transactions that pass through Registers of Scotland each year before the new Register of Crofts is counted in. Professor Shucksmith recommended a map based Crofting Register and that is what we now have. The Crofting Register is free to view online. 29 common grazings have been registered on the Crofting Register to date. This is much better than I ever expected by this early stage. 9 crofts have been registered to date. Most with plans produced by crofters themselves. Registers of Scotland can help by providing crofters with OS maps to plot their croft on. Derek Flyn referred to Registers of Scotland having been user friendly with the Crofting Register.

Alister Danter of Business Gateway discussed management structures for crofting communities and mentioned the possibility of crowdfunding.

Iain Maciver from Community Land Scotland told us that freehold land is often favoured over common grazings for development because of crofting issues that arise. Soumings are now relevant more than they were in the past when renewable developments take place on common grazings.

Whilst we were in Stornoway Town Hall other crofting activities were taking place around Lewis for the school children participating in Crofting Connections. The children also sat in on some of the sessions in the Town Hall.

I enjoyed the Gathering and am already looking forward to next year’s one.

Brian Inkster