Gigha community ownership on brink of failure

For Argyll warned some time ago – during the work of the Land Reform Review Group and during the rampant politicisation of land reform as a recruiting sergeant for votes for independence during the indyref campaign – that the community ownership of the Argyll Isle of Gigha might fail. The indications of this likelihood have been there for some time.

We warned too that there was no provision whatsoever for such failure in the ‘thinking’ behind the full-on encouragement of communities to buy out landowners in their area and ‘take control of their destinies’.

It has now become public knowledge that the Gigha buy out is indeed in trouble – serious trouble – with debts of almost £2.75 million and, less a divided community than two separate communities at odds with each other.

There is no realistic way that the little inshore island with a population smaller than most modest townships – around 175, can address this level of debt while also implementing an economic recovery / economic development plan – if such plans exist.

The realistic options facing the island and its community owner, the Isle of Gigha Heritage Trust, are:

• to go cap in hand to the Scottish Government for a bailout;
• go into administration – with the administrators trying to find a new owner.

The conceptual frailty

In the effort to win the vote for independence, where, in rural areas, land reform was promoted to lead the political agenda, the Scottish Government virtually handed over control of the agit-prop campaign for land reform to Andy Wightman, an obsessive zealot for the issue.

Wightman is unquestionably sincere and utterly dedicated to his cause, but the problem with a monovision – and with giving it control -  is that by its very nature a monovision is blind to the wider context of that vision and therefore drives a distortion into being.

The Sunday Herald has quoted Mr Wightman as indicating that he was speaking to them on the Gigha situation. In these quotations, Wightman contradicts himself – largely from confusion from never having envisaged the possibility of the failure of the community ownerships for which he persistently evangelises.

Firstly he compares the relative advantages in financial crisis management between a single landowner – always pictured as the stereotypical wealthy absentee landlord, envisaged as having other assets elsewhere and able ‘just to bung money’ in the way of the failing estate; and community landowners who do not have the means for such recourse.

Then, having described a community ownership as lacking that capacity to resolve the sort of debt crisis facing Gigha, Mr Wightman inexplicably concludes: ‘At least they have the capacity to resolve those problems now which they didn’t before’.

We cannot find a defensible – or any – logical connection between these two statements.

The reverse is of course the case. The community of Gigha now faces problems of a kind and at a level which their former circumstance never obliged them to have to confront – and they have no more resources to hand today to resolve them.

With support from public funds, the island was bought for over £4 million in 2001, when the economy was on the boom and no one dreamed of what was to come in 2008. Prosperity was becoming the norm.

If Gigha were to be sold today, out of administration, could it be expected to make that 2001 purchase price? The evidence of a tenant farmer, recently arrived – and, ruined, about to depart – suggests a degree of dereliction resulting from lack of investment. Such matters drive prices down. The administrators would then have to pay off the existing debt from a selling price agreed in a position of weakness.

The issue raised by Mr Wightman – and then somehow dismissed, is of course one of the seminal fragilities in community ownerships. Where some landowners selling an estate may have some other assets to deploy to keep an estate afloat in crisis circumstances, a community organisation, legally constituted  as a corporate landowner, is very unlikely to have any such pre-existing assets to bring to bear.

For Argyll had previously considered the impact of this deficiency in the context of maintenance and development – inevitably making community ownerships perpetual dependents on the public and charitable foundation purses, endlessly needing and applying for grants just to hold station, never mind to grow.

The Gigha situation – where, in some unexplained way, very substantial debt has been allowed to accumulate, puts the problem in a class of its own.

This small community would have to be able to come up with an achievable business plan capable of progressively paying down that hefty debt, while also generating income to sustain local businesses and local employment. And to make inroads on the latter, they would need capital for investment – which would have to come from further public funding in grant aid, since loans could only increase the current debt level.

For political reasons, the Scottish Government and the bodies it controls which distribute public funds, might well mobilise to bail out the island. There could  be no business case for such action.

It would, however, set a dangerous and unhelpful  precedent for other community buy outs, existing and future: that such adventures are risk free, since trouble will always produce a flotation jacket from or through the government.

This entire model of disguised failure is the conceptual frailty of what has been an unthinking but politically driven direction of social travel.

The problems of asymmetric responsibilities

Individuals do not become wealthier in such community ownerships, although the business savvy will identify opportunities to develop at costs that may be below those involved in such enterprises in different circumstance.

What individuals do in community ownerships is to become more responsible.

In addition to their personal responsibilities for families and for earning a living, they acquire the additional obligations to contribute to the shaping and supporting of the management of their community owned estates and associated businesses.

There will always be those who don’t bother to put much effort into playing their part in communal responsibility – but who may well be quick to complain and blame when things go wrong. Similarly there are always those who weigh in with dedication and resourcefulness and carry the burden – which will eventually become too great to bear.

In small and in parallel internal communities as Gigha appears to have become, this natural pattern of evasion and acceptance of responsibility becomes additionally complex and difficult.

The problems of community expansion

Community ownerships are seen as potential instruments of sustainability for remote rural communities. They are also promoted as instruments of local economic growth.

Since the principal characteristic of remote rural communities is underpopulation and depopulation, the common ownership of an estate leads generally to efforts simultaneously to grow and sustain the community.

The number of jobs likely to be developed from the sort of enterprises a community owned estate might support is small; and is unlikely to be able to do more than support some existing members of the community to remain in the area, with a living wage.

It is improbable that enough new jobs cab be be generated to offer permanent and reliable employment to new members of the community, attracted by advertised opportunities.

It is improbable that the number and type of jobs that might be generated will offer any serious career structure for the ambitious.

This means that the generality of what community ownerships can achieve is to maintain the presence of those who wish to remain in their communities and are prepared to settle for a form of subsistence living.

Communities may seek to expand themselves by making available opportunities to come and live there – through affordable rented housing. This may not necessarily be accompanied by any associated employment opportunities since, in some communities, the primary need is to have more young children present to keep a local school open, whether or not the parent or parents work and whether or not there is local work for them to do.

There will usually be some room to accommodate proposals on business development brought forward by some incoming individuals with ideas and an entrepreneurial spirit.

One problem in all of these scenarios – and it seems that this may have developed on Gigha – is that it is the existing community who create, advertise and enable such additions to their community, a process which can commodify the new arrivals.

The existing community effectively ‘own’ the incoming members. They are a resource the existing community has chosen to import for its own benefit. They are a form of ‘saviour siblings’. Their job is to support the sustainability of the existing community – and the extent to which they can be perceived and received as equal members of that community is not robust.

The difficulties and challenges of island life during difficult times may well undermine the will to stay and make it work where, as in the case of the few inshore islands, like Gigha, the very visible mainland constantly offers conscious alternatives. There are some indeed who currently live off the Isle of Gigha on the mainland, while remaining engaged with its affairs to some degree.

Government between a rock and a hard place

The potential failure of the community ownership of Gigha puts the new administration of First Minister Nicola Sturgeon, under what will be unwelcome pressure.

Land reform and increasing community buy outs have become a central tenet of the SNP government as well as of the independence prospectus.

The Gigha experience will not be a universal one but neither will it be an isolated one.

What this Scottish Government does in the case of the Gigha situation will now be unable to avoid the political dimension of its own making. What it does will have to be a major influence upon the government’s shaping and managing of Scotland’s economy. And what it does will be a major indicator of just what sort of government we have, with what priorities, what awareness of realities and what degree of strategic political nimbleness?

The greater the number of responsibilities to be carried by public funds, the greater the need for higher levels of taxation revenue to support such commitments; and the greater the range and  levels of taxation imposed, the more the sort of investors Scotland so badly needs will go elsewhere.

They may have put themselves between a rock and a hard place in this element of their blinkered push for independence at all costs, but the Scottish Government nevertheless now finds itself between that rock and that hard place. Their options, either way, are painful.

Gigha is suffering. Scotland is watching. Analysts are wondering.