Hansard

I am conscious that there is quite a lot for us to get through here. I will try to go through this as quickly as I can. Stakeholders have indicated a need for legislation to offer a wider range of legal bodies that a community could use when forming a community body for the purposes of registering an interest in land or of exercising a right to buy under part 2 of the Land Reform (Scotland) Act 2003. The amendments in this group offer community bodies more flexibility in deciding which form of community body best suits them. Stakeholders highlighted Scottish charitable incorporated organisations—SCIOs—and community benefit companies as being suitable bodies for the purposes of the community right to buy. An amendment to the 2003 act, which provides that a community body can take the form of a SCIO, in addition to the option of being a company limited by guarantee, is set out in section 28 of the bill as introduced. Amendment 18, which is a technical amendment paving the way for amendment 22, seeks to add community benefit societies as another type of legal entity that a community can use to form a community body for the purposes of registering an interest in land and exercising the community right to buy. Amendments 18 and 22 have been lodged in response to stakeholders’ requirements for greater flexibility in the types of body that are considered to be suitable for a community body. Under amendments 19 to 21, in order to be a community body the legal entity forming the community body—which if amendments 18 and 22 are agreed to will be a company limited by guarantee, a Scottish incorporated charitable organisation or a community benefit society—must have articles of association, a constitution or registered rules that meet certain requirements. One of the current requirements is that the articles, constitution or registered rules must state that the community body must have at least 20 members. Amendment 19 seeks to amend in two respects the list of requirements that a company limited by guarantee's articles must comply with in order to be a community body. First, it amends the requirements to provide that they state that the community body must have at least 10 members instead of the current minimum requirement of 20. That is intended to address difficulties, highlighted by this committee, of certain smaller or remote communities finding enough members to form the community body. Secondly, it seeks to amend the requirements to increase the proportion of members of a community body who must be members of the community from a majority to three quarters. That will ensure that, even for community bodies with a small number of members, the interests of the local community are protected. Amendment 20 seeks to amend the list of requirements that a Scottish charitable incorporated organisation’s constitution must comply with in order to be a community body so that it stipulates that the constitution has to contain a provision that the community body must have at least 10 members instead of the current minimum requirement of 20. Amendment 21 also amends one of the requirements of the constitution of a community body that is a Scottish incorporated charitable organisation to increase the proportion of members of the body who must be members of the community from a majority to three quarters. Amendment 22 seeks to set out the requirements that the registered rules of a community benefit society must contain in order for it to be a community body. With regard to amendment 23, ministers currently have the power to disapply the requirement that the articles of a company limited by guarantee or constitution of a Scottish charitable incorporated organisation must state that the community body must have at least 20 members. If amendments 19, 20 and 21 are agreed to, the minister will have the power to disapply the requirement that the articles or constitution state that the community body must have 10 members instead of disapplying the requirement that they have 20. Amendment 23 extends that power to the requirement that the registered rules of community benefit societies must state that the community body must have a minimum number of 10 members. On amendment 24, ministers have under the bill as introduced the power to amend the subsections listing the types of legal entities that communities can use to form a community body. Amendment 24 seeks to enable ministers to amend provisions relating to community benefit societies as inserted by amendment 22. Amendment 25, which is a consequential amendment resulting from the addition of community benefit societies as a type of body that communities can use to form a community body, adds the definitions of “community benefit society” and “registered rules” to the bill. On amendment 26, in accordance with the 2003 act and the bill as introduced, community bodies are prohibited from modifying their memorandum, articles of association or constitution without ministers’ consent in writing during the period beginning with the application being made and ending with any of the following: the registration of the community interest in land; a decision by ministers that the community interest should not be registered; ministers declining to consider the application; or the application’s withdrawal. Amendment 26 extends that to include a prohibition on modifying a community body’s registered rules in the case of community benefit societies. On amendment 27, in accordance with the 2003 act and the bill as introduced, community bodies are prohibited from modifying their memorandum, articles of association or constitution without ministers’ consent in writing for as long as the interest remains registered or, as the case may be, the land remains in its ownership. Amendment 27 extends that to include a prohibition on modifying a community body’s registered rules in the case of a community body that is a community benefit society. On amendment 33, the crofting community right to buy in part 3 of the Land Reform (Scotland) Act 2003 can be exercised only by crofting community bodies. At the moment, those bodies must take the form of companies limited by guarantee that meet certain requirements. In keeping with the proposed amendments to part 2, amendment 33 seeks to add Scottish charitable incorporated organisations and community benefit societies as types of legal entity that crofting communities may use to form crofting community bodies for the purposes of exercising the crofting community right to buy. In addition, the amendment seeks to provide that the Scottish ministers can add additional types of legal entity at a later date, should that be deemed necessary. Amendment 33 also seeks to amend the requirements of the articles of association of a crofting community body that is a company limited by guarantee. It proposes to amend the requirement that the articles of a crofting community body that is a company limited by guarantee must state that the body has a majority of members who are members of the crofting community; the amendment seeks to increase the requirement so that the articles state that three quarters of the membership must be members of the crofting community. The amendment also seeks to remove the requirement for a crofting community body to arrange for its accounts to be audited, while retaining the requirement for crofting community bodies to ensure proper arrangement for financial management. The change aims to avoid confusion among crofting community bodies about the types of audit that they must carry out, and it will prevent unnecessary duplication of effort. The body will continue to submit an audit of accounts by the appropriate governing body, which will be Companies House, Office of the Scottish Charity Regulator or the Financial Conduct Authority as appropriate to the type of legal entity. That is in line with the proposed amendments to part 2 of the 2003 act. Amendment 33 also addresses issues relating to the definition of a crofting community for the purposes of the crofting community right to buy. At present, the definition might not always include all those who would consider themselves to be members of the crofting community, and the amendment seeks to change that definition in an attempt to capture those persons who consider themselves to be members of the crofting community but who at present might find themselves excluded from the definition. One example might be 16 or 17-year-old crofters who would consider themselves to be members of the crofting community but who are excluded from the definition because they are not on the electoral register. At the moment, two registers contain details of crofters: the register of crofts, which is held by the Crofting Commission; and the newer crofting register, which is held by Registers of Scotland. We want communities to be able to rely on the information that is held on either of the registers in determining who the crofters are on the land that they are trying to purchase, including tenants and owner-occupiers. Information on tenants is held on both registers but, as was made clear last week, the Crofting Commission does not have a duty to collect information on owner-occupiers. That means that at this stage we cannot amend the bill to make it clear that the definition of a crofting community should rely on information about owner-occupier crofts held in the register of crofts. We therefore propose to give ministers the power to make regulations to extend the definition of a crofting community at a later date. If the Crofting Commission’s requirements in relation to keeping owner-occupiers' details on the register of crofts should change in the future, ministers could use the power to extend the definition accordingly. We certainly propose to liaise with the Crofting Commission on this issue. Amendment 33 also seeks to remove the requirement that members of the crofting community must be resident within 16km of the crofting township that is situated in or which is otherwise associated with the croft land. If accepted, the changes proposed would mean that the definition of a crofting community would be all those persons who: are resident in the crofting township that is situated in, or otherwise associated with, the croft land that the crofting community body has a right to buy, and who are entitled to vote in local government elections in the polling district or districts in which that township is situated; are tenants of crofts in the crofting township whose names are entered in the crofting register or register of crofts as tenants of those crofts; are owner-occupier crofters of owner-occupied crofts in the crofting township whose names are entered in the crofting register as the owner-occupier crofters of such crofts; or are such other persons, or are persons falling within a class of such other persons, as may be set out by ministers in regulations. 11:00 Ministers will retain their current power to define a crofting community in another way if it is, in their opinion, inappropriate to define it as set out in the 2003 act. I am nearly there. The purpose of amendment 2 is to extend section 72 so that it includes reference to the constitution of a Scottish charitable incorporated organisation and the registered rules of community benefit society, in addition to the memorandum or articles of a company limited by guarantee. That will ensure that crofting community bodies that are Scottish charitable incorporated organisations or community benefit societies cannot modify their constitutions or registered rules without ministers’ consent in writing once they have bought the crofting land. Amendment 2 also seeks to insert provisions that will allow ministers to make an order relating to, or to matters connected with, the compulsory purchase of croft land by ministers under section 72. It also seeks to insert a power for ministers to make such modifications of enactments as appear necessary or expedient, in consequence of any provision of such an order, or otherwise in connection with the order. That is to mirror the power that is included in section 97E(4) and (5) of the proposed new part 3A of the 2003 act. Amendment 40 is consequential to amendment 2 and ensures that, when ministers, under section 72 of the Land Reform (Scotland) Act 2003, exercise the power to compulsorily acquire land, and by virtue of amendment 2, exercise the power to make an order relating to that, the order will be subject to affirmative procedure. All in all, this group of amendments seeks to give communities greater flexibility to choose the type of community body that suits their needs and to lessen the burden on communities by removing the need for the auditing of accounts. It ensures that smaller communities can take advantage of the right to buy by reducing the minimum number of members while ensuring that the community focus is strengthened. I encourage the committee to support the amendments. I move amendment 18.