Land Reform (Scotland) Bill - What are the changes?

The controversial Land Reform (Scotland) Bill, which aims to reform the law relating to large landholdings and leases of rural land, continues its progress with a number of amendments being made following completion of the latest stage of the parliamentary process.

Following majority agreement by the Scottish Parliament to support the main purpose of the Bill earlier this year, over 500 amendments were put forward by MSPs. These were considered and debated upon by the Net Zero, Energy and Transport Committee (the lead parliamentary committee of the Bill) throughout June following which an amended “Stage 2 Bill” was published. The Stage 2 Bill can be viewed here.

Part 1 of the Bill includes measures which affect large landholdings, notably:

• Powers for the Scottish Ministers to make regulations about land management plans which owners must produce and make publicly available

The Stage 2 Bill makes a number of significant changes to this part of the Bill. These include a requiring the owner to consult with tenants and (where applicable) crofters and small landholders – in addition to communities – in the development of, and significant changes to, a land management plan. The land management plan must set out steps taken by the owner to carry out this engagement and how this influenced the development of the land management plan.

Other changes include expanding the list of those who can report alleged breaches, increasing maximum fines for breaches of regulations from £5K to £40K and greater powers for the new Land and Communities Commissioner (who will be a member of the Scottish Land Commission and whose responsibilities will include enforcement of the regulations) to investigate and enforce breaches.

• A prohibition on sale of part or whole without first notifying the Scottish Ministers and allowing communities the opportunity to use the community right to buy late application process

The proposal that the owner would not be able to sell any land (however small an area) without first of all notifying the Scottish Ministers came under fierce criticism from both sides of the debate. It was considered to be disproportionate as it could catch transactions such as the sale of small areas of land to local residents.

These concerns appear to have been taken on board, as the Stage 2 Bill now provides that the owner of a large landholding will be able to sell a part of their ownership provided it falls below a certain threshold. This threshold would be set by the Scottish Ministers in regulations, which would be subject to consultation and parliamentary process.

• A prohibition on sale without a lotting decision from the Scottish Ministers

This is one of the most controversial parts of the Bill, which requires the owner of a large landholding to apply to the Scottish Ministers for a lotting decision before sale. The Scottish Ministers must decide whether or not the land should be transferred in lots and take into account a report prepared by the Land and Communities Commissioner when reaching their decision.

Criticism had been directed at the lack of any timescale within which the Scottish Ministers must make any such lotting decision, as it would not be possible for owners to have much certainty around when they may, or may not, be able to progress land sales. The Stage 2 Bill now provides that a lotting decision must be made within six months, but without saying what will happen if no decision has been made once that timescale has expired the effect is perhaps somewhat limited.

The Stage 2 Bill provides that the Scottish Ministers must publish guidance about making lotting decisions including how they expect it to work in practice.

A “large landholding” for the purposes of these provisions was land within the same or connected ownership which exceeded 1,000 hectares, or 3,000 hectares (with special rules for islands) in the case of land management plans. As expected, the Stage 2 Bill makes the threshold consistent across the Bill so that it applies to land within the same or connected ownership which exceeds 1,000 hectares and removing any distinction for islands. An important change is made stating that when calculating whether a landholding meets the large landholding threshold, any land within 250 metres of other land owned by the same person or a connected party must be taken into account.

Part 2 of the Bill deals with agricultural holdings. Very few amendments were considered and taken forward at Stage 2 and some (e.g. tenant improvements, right to buy process and resumption compensation) may be subject to additional scrutiny at Stage 3 – the detail is presently unknown.

The Bill is now at its third and final stage, when MSPs can propose further amendments which will be debated and decided on in the Scottish Parliament’s debating chamber, and at this stage all MSPs can vote on them. There is then a debate and a vote on whether to pass the Bill. The timetable for this final stage has not yet been announced and the Scottish Parliament is now in recess until 2 September 2025 so there will be no progress until then.

It is however likely that further amendments will be made to the Bill at this final stage and the debate on land reform is by no means over. Once enacted, secondary legislation would be required for certain elements and it is expected that there will be transitional provisions.