Tag Archives: Common Grazings Funds

Oh yes you did!

Oh yes you did!

The whole truth and nothing but the truth?

On Monday of this week the Chief Executive of the Crofting Commission, Catriona Maclean, published an open letter. It reads:-

There has been much said recently about the Crofting Commission and its actions, in particular in relation to common grazings.  As the regulator for crofting we cannot comment on specific cases but it is clear that there have been a number of issues raised which many people have expressed concern over and the full circumstances of why action was necessary is not yet in the public domain.

I think it is important to say that the Commission is not on a campaign to review the functioning of every grazings committee.  Be assured, we do understand that most of the nearly 500 grazings committees across the crofting counties are working well, and will continue to do so, helping to safeguard this important community asset.  This situation has identified the passion and value that crofters, and those who represent them, put on common grazing land.  The Commission shares that passion and value and it is good to see its management and potential being discussed openly.

It is also important to emphasise that the Commission has never said “every grazings committee must carry out a full audit of their accounts” or that “without question all grazings committee must distribute every penny of money to all shareholders and that no money can be retained”.  This view has been advanced by others, not the Commission.

We are the regulator of crofting and we must represent the interest of all 15,388 crofters, the majority of whom share in common grazings and when they express concerns we have a duty to investigate.  In most cases these matters are resolved by mutual agreement.  Putting a committee out of office is not a step taken lightly by the Commission and only occurs rarely and after protracted discussion and investigation.

The way the Crofters (Scotland Act) 1993 (as amended) states that common grazings should be managed represents true democracy at its most local level.  It requires the committees, who are appointed by the shareholders to represent them, to discuss plans with the shareholders and to get their approval for improvements.  This ensures that shareholders share both the costs incurred and any benefit or dividend that results.  All the more reason to see grazings being managed well.

Indeed, the Commission has had support from within crofting communities for being willing to grasp the nettle and be an effective regulator, taking the position that grazings should be properly managed.

Some have expressed concern over crofters who are absent, possibly blocking improvements or failing to pay for maintenance.  I would like to assure crofters that there are remedies available within the current law.  The Landlord has the right to make an application to the Scottish Land Court to terminate the tenancy where a person is in breach of their statutory conditions as, following a much more complex process, can the Commission.  Even if that does not happen should a shareholder fail to contribute to costs the Commission can, when asked to intervene, act as arbiter and has the power to suspend and ultimately terminate a share and reallocate it to others.  This would result in shares coming into the hands of active crofters, willing to pay their dues.

People have said “why should an absentee get anything at all?”  The current Act does not differentiate between shareholders who are resident and non-resident and therefore, neither can the Commission. This is for legislators to address when next reviewing crofting legislation.  Equally there has been speculation about the interpretation of the Act.  The Commission is confident they are applying the law correctly but the only place this can be clarified is in the Scottish Land Court.

I would like to reassure committees and shareholders that we are preparing more best-practice guidance for them and, once we have discussed this guidance with our crofting partners, we will make it available to all grazings committees, shareholders and crofters.  In the meantime, Commission staff are on hand to support and provide guidance to crofters, grazings clerks and grazings committees.  More information can be found on our website (www.crofting.scotland.gov.uk).  In addition we will be running an information session on common grazings at our local crofting meetings to be held across the crofting counties later in the year.

As Chief Executive of the Commission I have a genuine interest in the crofting system.  Partly because I have been involved in its administration one way or another for over 20 years, but even more so because – as a daughter of the croft – it is in my psyche and in my heart.  I know how it benefits people and I am committed to seeing the system flourish.

What is important to both myself and Commissioners is that we work together with others to secure the future of the crofting system that we all value.  I sincerely hope that those who have either engaged in this debate or have been reading along with it, will continue to engage in a discussion about what that future will look like and make sure that decision makers hear those views.

For those who feel passionate about the Commission and how it operates – then why not take the chance to be part of it by standing for election when these take place early next year?  This would provide you with the opportunity to be at the heart of shaping the future Crofting Commission to ensure that it, and the crofting system, is the way you want it to be.

What I would highlight, in particular, from this letter is Catriona Maclean’s adamant statement that the Commission has never said “without question all grazings committee must distribute every penny of money to all shareholders and that no money can be retained”.  Oh yes they did!

The Crofting Commission have deleted from their website guidance issued by their Convener, Colin Kennedy, on 25 April 2016. That guidance included the following statement:-

As trustees any money received by the committee belongs to the shareholders and
should be distributed to them as soon as is reasonably practicable. It is NOT the
township’s or the committee’s money and as such it is the duty of the Grazings Clerk
to distribute any money received from whatever source, but in particular
resumptions, according to each individual shareholder’s share entitlement whether or
not they are active crofters.

When the Grazings Committee require monies to maintain the common Grazings
and the fixed equipment or to carry out works for improvements, the committee must
levy and recover the required monies directly from the shareholders for onward
payment to any third parties.

William Swann, who has since resigned as a Commissioner, also reiterated this same stance on behalf of the Crofting Commission when he chaired a meeting that the Crofting Commission held with the shareholders in the Mangersta Common Grazings. It was reported at the time that:-

Commissioner William Swann, who presided over the meeting, made it clear that under the Crofting Reform Act of 1993 any money that comes into the village must be distributed among all the shareholders – including absentees. Any improvement works then needing to be carried out must be financed through a levy charged on the same shareholders.

The Crofting Commission’s attempt at the eleventh hour to change their tune in this way through historical revisionism does them no credit. An apology and an admission that they got it wrong might have.

Brian Inkster

Image Credit: Pinocchio © Disney

Common Grazings and the Spirit of the Law

Patrick Krause

Patrick Krause

I continue to catch up with news of ‘The Common Clearances‘ since I returned from holiday. With the amount of new news on this topic being generated daily this week that is a difficult task!

On 25 May 2016 Patrick Krause, Chief Executive of the Scottish Crofting Federation, published a piece on the Federation’s website. I now reproduce it here in its entirety with a small comment at the end from myself on the question of the will of Parliament.

 

The Spirit of the Law
The inexplicable case of a public body confusing legal dogma with good sense 

The Crofting Commission website says “The Crofting Commission regulates and promotes the
interests of crofting in Scotland to secure the future of crofting.” Following the summary
dismissal of two (or more) grazings committees; the foisting of grazings constables upon the
dismembered grazings; the demolition of crofters’ characters; the contradiction and confusion,
it is no wonder that crofters and those with crofting interests are standing agog and are asking
“What is going on in the Crofting Commission?” It is not for me to make any judgement on the
legalities of the fracas that has been taking place over the past month – crofting lawyers are
willingly giving opinion – but I will attempt to explain the essence. Common grazings are the
epitome of communal working, yet this is a spectacularly detrimental exercise in public
relations by the Commission that threatens the very core of crofting communities. I wonder
what the motive is.

One committee was summarily dismissed for not presenting fully audited accounts. Previously
the Commission had issued official guidance that ‘audited’ did not mean fully audited in the
legal (and expensive) sense, but could be taken to mean an independent examination – the
Commission were taking a “light-touch approach”. At the demand by the Commission for five
years annual accounts, the committee presented an independent examination of its accounts,
as is usual for small businesses and social enterprises and is perfectly acceptable to HMRC,
Companies House and the Charities Regulator. They were summarily dismissed for failing the
demand. This subsequent heavy-handed bombshell has naturally caused fear throughout
regulated grazings that they also are in breach for not having fully audited accounts.

A second committee was also summarily dismissed (both grazings then had a constable foisted
upon them by the Commission, which a leading crofting lawyer claims is not legal in these
circumstances), in this case for not distributing income from resumption. Though the only
shareholder asking for his tiny share of the resumption money was an absentee, legally he had
the right to it, we are told by the Commission.

It is hard to understand why this committee was unexpectedly sacked when it had attempted
to pay the absentee, under guidance of the Commission (and the other was also instantly
sacked even though it had seemed to have complied with all the demands of the Commission).
But let’s leave the detail and look at the principle.

The law says that money due as part value of resumption may be paid by the landlord to the
clerk of the committee for distribution by the clerk among the crofters concerned. The law is
not prescriptive in saying when or how the distribution is to take place. The Commission has
added in its regulations the word “immediate”.

For years grazings committees have managed finance in a workable, business-like fashion.
Income generated from anything, such as resumption of land, schemes for development or
through managing agri-environment schemes, is put in the bank. As in any business,
expenditure on carrying out maintenance or improvements is deducted before any profit is
disbursed to shareholders. If a grazings committee was expected to take all income and pay it
out as dividends to shareholders before deducting expenditure, only to then have to recover
from all shareholders their share of the expenditure, it would be a complete nonsense.

Hobbling grazings by making them produce fully audited accounts, when other similar
businesses or voluntary groups don’t, and making them run an unworkable cash-flow, that no
business would, could not have been the intention of the law, but this is what it seems the
Crofting Commission is trying to enforce, presumably at considerable public cost.

The Commission argue that it is only carrying out its interpretation of the law; but why now
and so destructively? If the Crofting Act is wrong (as much of it has proven to be) it could be
put in ‘The Crofting Law Sump’ for future rectification and the Commission could quietly
resolve the issues, rather than turning this into a public, highly-charged stand-off. If it is
enforced, grazings committees cannot comply so will resign (or be dismissed) and the grazings
will leave regulation – unless the Commission then imposes constables on all grazings.

The Commission clearly knows a lot more about regulation than I, and knows what the
consequences of this will be, but are keeping quiet about its objective. How does this fit with
the Crofting Commission Policy Plan in which it says “The Commission regards the shared
management and productive use of the common grazing to be essential for the sustainability
of crofting. To that end it will … work with crofting communities to promote the establishment
of effective grazing committees and will actively support established committees”?

The Convener of the Crofting Commission is implicated in the fracas perhaps more than a
convener ought to be, having had complaints raised against him for behaviour at one of the
grazings meetings and having turned up unannounced at the other. He came to ‘observe’
apparently. The chair would not allow him to participate as he had a conflict of interest, and it
was surely odd that he was allowed to stay at all, this being the case, and it being against the
wishes of crofters present.

The convener has been widely quoted as saying the Commission is to deliver “the express will
of Parliament”. He would do well to go back and look at the passage of the Bill that became the
2010 Act to see what the will of Parliament was. The will of Parliament is not necessarily the
letter of the law, or in this case, the Crofting Commission interpretation of it, if it is bringing
about the demise of regulated common grazings.

Patrick Krause (Chief Executive of the Scottish Crofting Federation)

Comment on the Will of Parliament

Patrick is correct to highlight the fact that the Commission are certainly not delivering “the express will of Parliament”. This is something I will return to in detail in a later blog post with a clear analysis of what the will of Parliament actually is on this issue. This should also, actually, help to spell out the letter of the law on the matter. It should be noted that to date the Crofting Commission has not given any explanation with reference to the law as to why they are taking the stance or actions that they are and have been taking.

Brian Inkster

Update – 20 June 2016: Crofting Commission flouts the will of Parliament

The Crofting Law A-Team

The Crofting Law A-Team

Martin Minton, Angus Mackay, Brian Inkster, Evonne Morrison and Derek Flyn

Inksters recently strengthened their crofting law team by the addition of three new team members.

Derek Flyn joins Inksters as a crofting law consultant. Derek is one of the best known and most highly respected crofting law experts in Scotland. He co-wrote the first book on crofting law in 1990 and is currently writing a new up-to-date book on crofting law with Keith Graham. He was in recent years the Chair of the Scottish Crofting Federation and continues to be their Parliamentary Spokesman.

Derek, together with Keith Graham, produced the Crofting Law Sump Report which highlighted to the Scottish Government in 2014 all of the problem issues requiring to be addressed in crofting law. This is likely to lead to new crofting law legislation during the term of the new Scottish Government.

Derek lives in Beauly and has strong connections with the Isle of Skye where his wife comes from and where he once worked.

Derek will be assisting the crofting law practitioners at Inksters and providing them with specialist advice on complex crofting law matters.

Angus Mackay also joins Inksters. He is a legal consultant with a specialist interest in Community Empowerment, Land Reform and Renewable Energy.

Angus has worked for large commercial law firms and latterly for a renewable energy company. He will be dealing with general crofting and property transactions and giving specialist assistance in community acquisitions and renewable energy schemes.

Angus comes from the crofting township of Melness in Sutherland.

Evonne Morrison is joining Inksters as a Trainee Solicitor. Coming from Shetland she has an interest in crofting law and will be assisting the team in day to day crofting transactions/cases.

These three new team members join Brian Inkster and Martin Minton to provide Inksters’ clients with a formidable crofting law team of five.

Crofting Law A-Team

Derek Flyn, Angus Mackay, Evonne Morrison, Martin Minton and Brian Inkster

Brian Inkster has dealt with crofting law matters for over 25 years and appears in the Scottish Land Court regularly and is often called upon to provide opinions on complex crofting law matters.

Brian is the Hon Secretary of the Crofting Law Group, a member of the Crofting Group of Scottish Land & Estates, the Cross-Party Group on Crofting at the Scottish Parliament, the Scottish Government Crofting Stakeholder Forum, the Crofting Register Stakeholder Forum and the Crofting Legislation Stakeholder Consultation Group.

Brian is a regular contributor at crofting law conferences and blogs about crofting law on this blog.

Martin Minton is a solicitor who has been with Inksters for five years concentrating on crofting law. Martin deals with crofting property transactions and disputes. He also deals with wills and executries involving crofting issues.

Martin comes from a crofting family in Dundonnell near Ullapool.

Martin has contributed articles and legal updates on crofting law for various publications and for this blog. He is the editor of the Crofting Law Group Newsletter.

Inksters’ crofting law team provide members of the Scottish Crofting Federation with a crofting law helpline.

Brian Inkster said:-

“With the current turmoil at the Crofting Commission over their handling of issues surrounding Common Grazings Committees it is essential for crofters to receive the best possible advice that they can get. I am delighted that Inksters have assembled a crofting law A-Team that will give our clients just that.”

If you need to call in the ‘Crofting Law A-Team’ then phone Rose Sullivan on 0345 450 0123 and she will direct you to a member of the team. Alternatively e-mail the crofting law A-Team or use the Contact Form on this blog to do so.

Claims against Mangersta Common Grazings Committee withdrawn

Mangersta Village with common grazings

Mangersta Village and common grazings (Photo by Elsie Mitchell)

The former tenant in the crofting village of Mangersta, whose activities led to the disbandment of the Common Grazings Committee, has withdrawn all of his financial claims.

Following recent publicity, the individual – who had sought a personal share of grants paid to the village  while he was an absentee tenant between 1994 and 2012 – said  in a letter to the former Grazings Clerk that he was withdrawing  “any and all claims … with immediate effect”.

I, as agent for the former clerk to and four former members of the Mangersta Common Grazings Committee, have now written to the Crofting Commission informing them of the development and asking them to reinstate the Grazings Committee and clerk without delay.  I previously described the Commission’s conduct in replacing the Committee with a Grazings Constable as “unreasonable” and “illegal”.

Members of the former Grazings Committee said in a statement:-

We welcome the withdrawal of these demands and sincerely hope it will bring all of this to an end.

We repeat our call for an inquiry into the workings of the Crofting Commission and particularly the guidance they have sent out, in response to events in Mangersta and Upper Coll, on financial management by Grazings Committees.

As is now widely appreciated, these have extremely damaging implications for the whole crofting system.

Brian Inkster

When the costs of administering a Common Grazings Fund would exceed the income

Neglect of Common Grazings now actively being encouraged by the Crofting Regulator!

Neglect of common grazings now actively being encouraged by the Crofting Regulator!

The Crofting Commission have, in statements and guidance issued surrounding ‘The Common Clearances‘, stressed the importance of funds received by Grazings Committees requiring to be immediately paid out to shareholders.

As indicated in previous posts on this blog examples of the “nonsensical” and “totally impractical” stance by the Crofting Commission have been given by Donald Macsween on his blog Air An Lot.

A comment from Donald Murdie today on the Crofting Law Blog gives more practical examples of the need for funds to be maintained for the benefit of the common grazings.

Also today on Twitter I had an exchange of tweets on this topic with Rebecca Hutton. She pointed out that:-

Still not cleared things up re grazings regs saying to maintain a grazings fund. For example, we get £10 for island rent which would mean spending £22.55 to send out cheques of 24p each!!

Indeed. If you were to follow Crofting Commission stipulations who would meet the deficits that could arise in Common Grazings bank accounts?

Another question that the Crofting Commission are unlikely to answer in a hurry.

Brian Inkster