Scottish Government

CONSULTATION REPORT
This report summarises the responses made to the consultation exercise that took place between October and December 2003

REVIEW OF THE CROFTERS (ETC) BUILDING GRANTS AND LOANS SCHEME (CBGLS) 2003

August 2004
Scottish Executive

This document is also available in pdf format (121k)

Contents

Acknowledgements
Introduction
The Consultation
Responses
Findings
Other Issues Raised

Annexes
1 - Distribution List
2 - List of Responses Received
3 - The Consultation Form

Crofting Branch
Land Use and Rural Planning
SEERAD
Pentland House
Robbs Loan
Edinburgh EH14 1TY

Introduction

1 CBGLS provides for both building new houses and the improvement and extension of existing houses. Only crofters and cottars with a genuine housing need are eligible. Over the last 10 years, more than 1000 new houses have been built and just under 1000 improved. Average annual expenditure over that period has been 3.2 million.

2 The objectives of the CBGLS are defined as:

• To help retain population in the remote areas of the Highlands and Islands of Scotland
• To improve and maintain the quality of crofter housing
• To enable the crofter to live on, and therefore to work the croft

3 At the Convention of the Highlands and Islands in October 2002 Ministers announced that the scheme would be reviewed and the administration would be moved from Edinburgh to the crofting counties. The relocation and review present an opportunity to ensure that the scheme meets current and future needs of the crofting communities and that relocated jobs are sustainable.

4 Scheme changes are to be met from within the existing budget agreed under the spending review. This consultation exercise addressed how the funding provision can work most effectively to deliver the objectives of the scheme. The current Crofting Reform Bill (in preparation) offers an opportunity for legislative change.

5 A consultation paper was issued at the end of September 2003. In all 212 responses were received and 411 attended the public meetings held to present the consultation paper. The consultation was held in partnership with the Crofters Commission who conducted a parallel exercise on crofter support programmes.

The Consultation .

6 A total of 2,600 consultation papers were distributed. Annex 1 shows the distribution list and Annex 2 a list of responses received.

7 Open public meetings were held at the list of locations below. Two additional meetings were held for MSPs on the 24 ^th September and for Western Isles Council on the 29 ^th September.

8 Dates, venues etc for CDP & CBGLS Public Consultation Meetings:

All meetings started at 7 pm with the exception of Barra which was held at 2pm

Responses

9 Those responding to the consultation paper were divided into the following categories:

10 Nearly all the individuals used the paper form provided with the consultation document or the on-line version, and gave additional comments and views in addition to answering the questions. Most organisations made more comprehensive submissions.

11 The following table gives the overall results of the questionnaire to give an initial impression of the views expressed: however many responses included important qualifications. The Findings section (below) reports on these qualifications and discusses other factors including views expressed in the meetings.

Findings

Q1 Is there a continuing need for a special housing scheme that is available exclusively to crofters?

12 A - CBGLS is continued

B - CBGLS is merged with other housing support schemes

13 The overwhelming view, 92% felt that the CBGLS should continue rather than be merged with other schemes. This was to be expected as those responding were characterised by their crofting interest.

14 Alternative suggestions called for the integration of all housing support in rural areas through a comprehensive examination of the various mechanisms. Several organisations, notably the Enterprise companies, suggested eligibility should be widened beyond crofters to everyone in crofting areas. There was also a minority view that exclusivity (to crofters) made the CBGLS divisive in some areas. One response suggested that CBGLS artificially inflates the value of croft land and distorts the market, thus making croft entry more expensive.

15 The principle reason given for supporting the scheme was that CBGLS links housing support to living on and managing the croft. Allied to this were comments on the maintenance of the crofting way of life and retention of populations in remote areas. The past success was cited by many, as was the cost effective nature and "leverage" of the scheme. Many commented that the focus should remain on crofting, and merging the scheme would lead to its dilution and loss of impact.

Q2 Do you think changes should be introduced to end new loans and channel the money saved into grants?

16 A - Changes to end loans and increase the rates of grant

B - No change but a modest increase in grants and continue with loans

17 There was a very narrow majority, 52%, for all the funding to go into grants. Points about the ready availability of mortgages at lower interest rates and the prospect of bigger grants were made extensively in support.

18 The main comments made by those in favour of keeping loans were for a better funding package overall, a reduction in interest rates on the loan, and that ending loans would disadvantage low income crofters. There were several suggestions that the loan rate should be linked to the base rate. Another suggestion was that there should be a choice offered to applicants to either have a grant only, or a lower grant and a loan.

19 The issue of de-crofting hardly featured in the individuals responses (one in favour, and three against). However it was raised in the meetings, notably at Portree, and was also given as the main reason for keeping loans by some organisations opposed to de-crofting as a matter of principle. (De-crofting the house site is required to give security for mortgage lending, and with the present grants and loan scheme, crofters who can afford to fund the balance of a housing project without taking out a mortgage can avoid de-crofting the house site). The majority of organisations felt a grant only scheme offered a better solution and would deliver a real increase in funding.

Q3: Do you support the principle of geographic targeting to enable more grant to be paid in the more remote and fragile areas ?

20 A - Zones for different rates of grant

B - All grant should be the same

21 The body of opinion, 74%, was firmly in favour of the principle of targeting the grant. There were many helpful suggestions such as using building cost indices to inform the priorities. The Crofters Commission supported the idea and suggested two zones instead of three. Another idea was to develop an appeals procedure for special cases

22 The minority who felt all the rates should be the same quoted unfairness, the difficulty in "drawing the lines" and the possibility of stimulating a rise in buildings in the higher priority areas. Several felt the "fragile areas" definitions were inappropriate. There was a feeling in at lease one mainland public meeting that targeting would give unwarranted priority to the islands.

Q4 Are you in favour of increasing house improvement grants ?

23 A - House improvement increased to the same as new housing

B - House improvement ended and all funds put into new housing grant

24 The majority in favour of increasing house improvement grants was 91%. Most of the reasons cited were identified in the consultation document. Reasons relating to the landscape were emphasised by SNH and the National Trust.

25 Most organisations, and several individuals, felt there should be greater co-ordination between the CBGLS and house improvement grants paid by the local authorities . To prevent improvements taking the lion's share of funds it was suggested that the budget for improvements could be limited. Those in favour of ending the grant, notably The Western Isles Council, felt the local authority could fill the gap and develop their scheme to meet the same needs for crofters. It was suggested in several comments and in two of the meetings that the threshold for expenditure on projects should be lowered.

Q5 Do you support the incorporation of the Water and Roads Grant with the main CBGLS?

26 A - Incorporate the water and roads into the CBGLS

B - Continue with a separate grant

27 A majority , 57%, opposed incorporation of this grant in the main scheme. The most common reason given for keeping a separate grant was to provide for situations requiring a lot of expenditure on site services, such as a long access road. During the meetings and in response comments there was something of a misunderstanding in that many believed the roads and water grant was readily available in isolation from the main CBGLS scheme. Although the grant is administered separately, it is in fact currently only available in association with a CBGLS funded building project. The consultation document could have been clearer on this point.

28 Several suggestions emerged from the consultation in relation to site servicing. One was to have a grant towards servicing communal sites. Another was to combine water and roads with CBGLS for administration - but have an option of using the grant for service provision only.

Q6 Are you in favour of extending eligibilty of CBGLS to all owner-occupiers of crofts ?

29 A - Eligibility extended to all owner occupiers

B - Owner-occupiers not eligible (other than those that bought within 7 years)

30 The general feeling, 65%, was that all owner-occupiers should be allowed access to the CBGLS; although many added the comment that applicants should be active crofters. Tenants were in favour of extending eligibility albeit by a narrower margin. There were some fears that owner-occupiers could be tempted towards speculative development by sub-dividing crofts and possibly selling houses on. Another comment referred to the owner of a number of crofts as a farm unit as being an inappropriate recipient of grant. Some were also concerned that by extending eligibility the scheme could end up being oversubscribed. Two people suggested that only owner occupiers should be means tested.

32 Of those against extension many thought that eroding the advantages of remaining in crofting tenure was against the spirit of crofting and would lead to an eventual loss of crofting tenure as a community and social resource. Others felt there would be less control over owner-occupiers by the Crofters Commission.

Q7 Do you think CBGLS should be means tested ?

33 A - No means testing

B - Means testing

34 There were some strongly held views in both the meetings and responses about over the idea of means testing. Overall there was a clear majority, 71%, against. A common reason given against means testing was that grant is not aimed at individuals but is to encourage improvement to the croft, and thereby the infrastructure of crofting areas. Also, there was an expression of support for the idea of crofting communities as a diverse range of people and the desirability of encouraging those with resources, such as people returning to crofting areas and bringing in capital.

35 Those supporting means testing felt housing support was only warranted by those who really needed it. Organisations were more evenly split on the issue and HiE felt it would be more relevant with increased grants. The suggestions submitted included a sliding scale for the test, an open level of grant with a means tested supplement, or (if loans were to continue) just means testing the loan.

Q8 Do you have any comments on the ideas for changes to the administration of the scheme?

36 (1) - Payment of fewer instalments

(2) - Changes to grant conditions

37 There was support for both fewer instalments , 73%, and changes to the grant conditions 78%. Comments on the instalments emphasised cash-flow considerations and the need to maintain some flexibility. On the grant conditions, the minority against change felt 20 years was not an unreasonable time to ensure the grant was going to genuine crofters. The Crofters Commission asked for a more extensive review of the scheme administration.

Q9 What is your preference for the relocation of the CBGLS administration

38 1 - A separate administration office at one location in the crofting counties

2 - Local offices of SEERAD that combine delivery of administration with the technical function

39 Option 2 was preferred by a majority of 69%. This majority was also reflected amongst crofters (customers of the scheme). The main reasons cited were accessibility and having a local "hands on" office. Those in favour of a central office listed consistency of operation and the economic impact to one location.

40 Amongst organisations views were divided. The Enterprise Companies saw one central office making more of an impact to one location. Local authorities suggested locations in their own areas for the office, and a number of local organisations made a case for the scheme to go to their various localities. The Crofters Commission and The Crofters Foundation both supported use of local SEERAD offices.

Other Issues and Ideas Raised During Consultation

Energy Efficiency

41 Both SEPA and the Crofters Commission suggested some added incentive for energy efficient buildings or green energy generation schemes.

Group Schemes

42 The Crofters Commission suggested a pilot project to test the idea of a joint scheme for community groups.

Business Premises and Housing

43 There were several suggestions during the consultation meetings that CBGLS should allow for a business element such as a Bed and Breakfast room in addition to housing need. The Crofters Commission also suggested the development of the scheme to allow for some business space within a house, be it an office, workshop, B&B etc in recognition that a croft is both a home and a business.

Distribution List: Annex 1

Distribution list for copies of the CBGLS consultation

All Scottish MSPs
All Scottish MPs
All Scottish Lords
All Scottish MEPs
Political Parties
Scottish Parliament

Local Authorities in the crofting areas
Local Community Council's in the crofting areas

Western Isles Enterprise
Communities Scotland
RICS
Highlands & Islands Enterprise
The Stornoway Trust
Harris Development Ltd
Ardnamurchan Development Group
Tiree Development Partnership
The Sutherland Partnership
North Highland Local Economic Forum
Bidwells Property Consultants
Faculty of Advocates
CBI Scotland
COSLA
Wildlife Trust
Deer Commission
SCVO
RSPB

All Crofting Assessors
All Grazings Committees
Crofting Associations
Crofters Commission
Scottish Crofters Foundation

National Farmers Union for Scotland
All area offices of SEERAD
Scottish Landowners Federation
Scottish Trades Union Congress
Other interested bodies

And on request: *
Crofter Tenants
Owner Occupier
Croftng Landlords
Land Agents
Solicitors
Libraries

* A range of individuals in this last group were sent the consultation paper as they appeared on recent relevant distributions lists. All those attending the meetings were given a copy of the paper.

List of Responses Received: Annex 2

Responses Made to the CBGLS Consultation.

Crofter Tenants 133
Owner Occupier 25
Crofting Landlord 3
Other 24

Organisations that responded to the CBGLS review

Dunrossness Community Council
Kinlochbervie Community Council
Mallaig Community Council
Deltine Community Council
Argyll & Bute Council
North Ronaldsay Community Council
Rogart Community Council
Pairc Community Council
The Highland Council
Western Isles Council
Western Isles Enterprise
Crofters Commission
Communities Scotland
RICs
National Farmers Union for Scotland
Scottish Crofting Foundation
Highlands & Islands Enterprise
Scottish Natural Heritage
Scottish Environment Protection Agency
The National Trust
The Stornoway Trust
Harris Development Ltd
Ardnamurchan Development Group
Tiree Development Partnership
The Sutherland Partnership
North Highland Local Economic Forum
Bidwells Property Consultants
Faculty of Advocates
North Dell Grazings Committee
Orinsay Grazing Committee
Elvich Grazings Committee
Melness Crofting Grazings Committee