Auditor warns ‘governance must improve’ at Crofting Commission

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The Crofting Commission, the body responsible for overseeing Scotland’s 20,000 crofts, ‘must improve its governance and rebuild damaged relationships between its board and managers’, a government watchdog has warned.

The excoriating 2020/21 audit of the Crofting Commission, published by Audit Scotland, found its leadership ‘falling below the standards expected of a public body in Scotland’.

It listed ‘indecisiveness’, ‘procrastination’, and ‘a lack of communication’ at the top, with ‘weaknesses in overall business planning’ that made it unable to conclude the commission would be in a financially sustainable position after 2022.

Crofting is a system of landholding unique to Scotland. A croft is a small agricultural land holding usually held in tenancy with buildings or a house. It provides a base for crofters and their families to live on, utilising the land for agriculture and other enterprises. There are around 20,000 crofts.

The Inverness-based Crofting Commission, established in 2012, ‘regulates and promotes the interests of crofting in Scotland to secure the future of crofting’. During 2020/21, it employed 60 staff, with an expenditure of £3.1 million.

One half of its leadership consists of a board of six elected commissioners and three commissioners appointed by ministers, led by a convener, who are responsible for providing strategic direction. The other half is its senior management team, consisting of a chief executive, and the heads of policy, finance, development, business support, etc., who ensure the board’s aims and objectives are met.

This is not the first Audit Scotland report to find fault. An earlier review in 2016 found ‘strong personalities, differences of opinion and apparent incongruent individual objectives and priorities were having negative impacts on how the commission’s board carried out its functions’. An almost entirely new board took office in 2017.

Now, within the new leadership, the watchdog has found ‘a breakdown in trust between the board and its senior management’. The report unearthed a lack of involvement of the board in the setting of the commission’s budget, ‘excessive involvement’ of the board and former convener in operational decision-making, and concerns about the leadership of the former convener Rod MacKenzie, who resigned in July.

In November 2020, the report explained, ‘the then convener sent a letter to the former Scottish Cabinet Secretary for Rural Economy and Tourism on behalf of the board, communicating that it had no confidence in the abilities of the chief executive to discharge his duties.

‘Specific concerns raised included a lack of leadership; indecisiveness; procrastination; a lack of communication; and poor personnel management. The board did not inform the chief executive or senior management team about the letter.’

Audit Scotland welcomed the commission achieving financial balance in 2020/21 and 2021/2022, but it was ‘unable to conclude that the commission is in a financially sustainable position over the medium-to-longer term,’ due to ‘weaknesses in its overall business planning’.

‘At the core of these issues is a failure to respect established boundaries between the respective roles of the chief executive, convener and board,’ it said. ‘This transgression, when combined with a breakdown of trust between the various parties, means that the leadership and governance of the commission is currently falling below the standards expected of a public body in Scotland.

‘There is a need for significant improvements in the leadership and governance of the commission if it is to provide effective strategic leadership and oversight of the key services it provides to crofting communities.’

Malcolm Mathieson, the Crofting Commission’s new convenor since July 2021, said: ‘We recognise the leadership and governance did not meet the standards expected of a public body. Whilst it is important to recognise the unprecedented pressures and exceptional circumstances we found ourselves in during the initial phases of the Covid-19 pandemic, we are confident that we have improved and transformed the organisation to ensure we meet the challenges of the future.

‘The board are clear in their support of the previous convenor and whilst disappointed, respect his decision to resign as convenor and commissioner from the East Highlands in July. Substantial progress has been made since the completion of the audit report; in particular, the clarification of roles and remits within the commission have been defined and accepted by all.’

Bill Barron, the Crofting Commission’s chief executive, said: ‘We have worked exceptionally hard to make tangible and positive changes. The reports also highlight areas of our operation where we are exceeding the standards expected of us.’

The chairman of the Scottish Crofting Federation, Donald MacKinnon, said: ‘It is very sad to read the report. The commission is the keystone to the much valued regulated system of land tenure that is crofting, and we hoped that this sort of internal wrangling was a thing of the past.

‘We appreciate that the setup of a board of commissioners, some of which are elected, some appointed, an executive team and a body of government officials isn’t ideal for smooth functioning and really needs to be reviewed. Everyone involved must feel frustrated.

‘The shame is that this translates into a lack of achievement of outcomes, particularly that which we have raised on many occasions about occupation and use of crofts. The lack of regulation is threatening the future of this system.

‘We note issues are being addressed, and we wish them well in this – there is an urgency.’