The Scottish Parliament has voted in favour of the general principles of the Land Reform (Scotland) Bill and the Bill will now move to Stage 2. Following its introduction on 13 March 2024, we have had nearly a year of evidence-gathering from the lead committee considering it. Focusing largely on Part 1 of the Bill, we summarise here some (by no means all, given considerations of length) of the major discussion points that arose during Stage 1 and anticipate what we might expect from Stage 2.
Lack of Detail
General
The Bill was heavily criticised in January’s rather scathing report from the Delegated Power and Law Reform Committee in January 2025. The Committee categorised the draft as “framework legislation”, which they assess as presenting challenges to effective scrutiny, as detail has to be fleshed out through secondary legislation.
Numerous areas were highlighted as having insufficient policy behind them, resulting in a lack of clarity as to when wide powers reserved to the Scottish Ministers might be exercised. Fundamental aspects of the Bill including the community engagement obligations, prohibitions on transfer and lotting all had recommendations to narrow powers and/or include duties to consult ahead of exercising powers. These concerns were echoed by the Lead Committee Report.
The Cabinet Secretary’s response to the Committee Reports largely sought to rely on the Scottish Government’s general obligation to consult with parties affected by a decision where appropriate. It did however undertake to consider adding express requirements to consult in relation to the large landholdings provisions mentioned above.
Lotting Decision Timeframes
One particular lack of detail over which significant concerns were raised was the lack of timeframes required for the Scottish Ministers to make a lotting decision, which raised a spectre of indefinite delays for sellers. Whether this was simple oversight or intended to be detailed in secondary legislation is not clear. Fortunately, the Cabinet Secretary has accepted that timescales are required and intends to bring forward an amendment to address this at Stage 2. The question, of course, will be whether the timescales proposed will be workable in practice.
Unworkable and unnecessarily complicated or burdensome provision
Prior notification for any sale from a large landholding
The Cabinet Secretary has said she will look to address this issue via amendment at Stage 2. It is not clear that a simple value or area measurement will satisfy all parties, with some arguing even small sites may still be of interest to a community.
Thresholds
The different thresholds for different parts of Part 1 of the Bill came under scrutiny from all sides during Stage 1.
Many argue that using an area measurement ignores the issue of concentration of ownership, which the Scottish Land Commission’s Review of Scale and Concentration of Land Ownership found to be the core issue for addressing imbalance of power. Others seek a lowering of thresholds to bring more owners into scope, with some suggesting the limit be set at 500ha or lower. The Scottish Land Commission recommendation is for a uniform 1000ha threshold for all parts of Part 1 of the Bill.
One of the (contentious) powers in the Bill is for Scottish Ministers to alter the thresholds in future, and it may be that we see the existing thresholds retained but with a more defined requirement to review and amend them in future.
Failure to Deliver on Consultation and Stated Aims
Lotting
The lotting test has been criticised for failing to consider the identity of the buyer, as recommended by the Scottish Land Commission and consulted on.
The Scottish Government response to that criticism is that consideration of the buyer is thought to come at too late a stage in a sale process, potentially leaving the Scottish taxpayer open to significant compensation claims from landowners if a sale could not proceed. It is for this reason that the “buyer facing test” was not included in the Bill. As lotting decisions would require that no two lots may be acquired by the same person, they consider this sufficient to deliver on the aim of diversity of ownership.
Concerns that lots could be amalgamated by buyers after sale have been acknowledged by the Cabinet Secretary and it may be that we see some anti-avoidance provisions considered.
Prior notification and community rights to buy
The prior notification provisions have also come in for criticism on failing to deliver. In the context of an ongoing review of rights to buy more generally, critics argue it is inappropriate and premature to legislate at this stage.
The measures as drafted are also said to be unlikely to significantly extend communities’ rights, whilst adding a substantial administrative burden for prospective sellers, raising questions about the proportionality of the approach.
The Cabinet Secretary is committed to retaining these measures, even if the review then means further legislation in future.
Agricultural Holdings – Resumption
Turning very briefly to Part 2 of the Bill, one of the major concerns raised here were the changes around resumption, including the introduction of a head of compensation based on the “capital value” in the lease, for both traditional and modern form tenancies.
Such provision had not been consulted on and was condemned by many, with the Scottish Land Commission calling for any changes to be paused pending wider review. Significant volumes of evidence suggested that such changes (both the substance and the lack of prior consultation/consideration with stakeholders) would be likely to disincentivise landlords from letting land, casting doubt on the Bill’s aim to “promote a thriving tenanted sector”. The Cabinet Secretary’s response to the Committee Report criticising these sections notes various areas to which she is giving “consideration”, with very few firm commitments.
Conclusion
The Bill is expected to come under significant amendment, in a number of its fundamental parts, at Stage 2. The opportunity for review and scrutiny at this stage is lower, and the Scottish Government will be keen to get the legislation through the parliamentary process prior to the next Scottish Parliament elections (to be held no later than 7 May 2026).
The Bill was long-awaited and much-heralded but even with the delays in it coming forward, it was not possible to get the substance right first time. Perhaps the subject matter is just too large for one Bill – a number of stakeholders would have preferred to see Part 1 and Part 2 make up separate pieces of legislation. Whether the necessary work can be completed at Stage 2 to make the Bill workable remains to be seen. What surely needs to be avoided is a repeat of earlier pieces of legislation, repealed before coming into force or subject to lengthy – and costly – challenge in the courts.
If you have any questions about the Land Reform (Scotland) Bill, please do get in touch with a member of our Land & Rural Business team.
