CLA secures pragmatic way forward on tenancy reform
Analysis of UK Government’s response to the Rock Review
Many CLA members were concerned when the UK Government launched a review of tenant farming in England. Undertaken by a working group led by Baroness Rock, the review had two clear objectives: to look at how new Defra schemes should be accessible to tenant farmers, and to look at how tenant farming should be integrated into the wider debate about the future of farming and land use.
The Rock Review, as it became known, made many recommendations, but after successful engagement from the CLA, the UK Government’s formal response to the review has found a sensible and pragmatic way forward for all.
Many of the proposals within the Rock Review had the potential to harm confidence in the tenancy sector, whilst they may have enhanced the interests of existing tenants, they would have reduced the amount of land available to would-be tenants or those wishing to take on more tenanted land. The CLA successfully argued that the new Defra schemes should fit within existing farming structures, rather than fundamentally changing the relationship between landowner and tenant, to fit the shape of those same schemes.
In 2022, the CLA ran an Agricultural Tenancy survey which found that the overwhelming majority of landowners are engaging proactively with tenants to ensure Defra schemes work for both parties at a farming level. This followed joint-working between the CLA and the Tenant Farmers’ Association on landlord/tenant cooperation when considering environmental schemes.
On this basis, the CLA has been leading the debate on such collaboration for many years.
The government response to the Rock Review has been published today (24 May). Members who have an interest in the tenanted agriculture sector whether as landlord or tenant will find reason to be encouraged by the language of the government. The tone of the report is to build confidence and encourage collaboration, developing on work already undertaken by the industry bodies. The CLA has been urging the government to acknowledge that threats of immediate reform have an immediate dampening effect on the amount of land made available to tenants. This has been heard.
The government is acting on the recommendations made in the Rock Review to improve the design of environmental schemes and to embed a greater depth of knowledge of the tenanted sector in Defra.
The UK Government supported the Rock Review recommendation to reform the Tenancy Industry Reform Group into the Tenant Farming Forum (TFF). It will have a more formal role, meeting quarterly with the farming minister in attendance, providing Defra with updates, expertise and feedback. The need to consult and/or legislate on reform will be kept under review and considered by this group of stakeholder bodies.
In the work to encourage longer term tenancies there is the current consultation on agricultural property relief (APR) underway and how this might be restricted to tenancies of at least eight-year fixed terms. Further work will be undertaken with the TFF to explore ways to support longer term tenancy agreements where wanted by the parties. The CLA will continue to argue that the industry requirements are for flexibility and that the proposed changes to APR are not the solution.
The CLA was pleased to learn that requests for immediate legislative reform as a means to address problems in the transition period have been met with a requirement to monitor the data and assess the issues and barriers first.
The Royal Institute of Charted Surveyors (RICS) has been charged with the development of a Code of Practice for the sector to set out the standards of expected behaviour of all parties in the sector as well as separately to look at land agent regulation.
The EFRA Select Committee is launching a call for evidence on the proposal for a Tenant Farming Commissioner. The Rock Review suggested that an independent commissioner could help to ensure fairness in the sector. The CLA has been called to give evidence on this inquiry, and will provide a perspective on what is fair for the entire sector. The CLA will engage in this exercise.
This government response has identified the areas where work must be done to build confidence in the sector and deliver longer term stability. The CLA continues to have a vital part to play in delivering this in its role as a key stakeholder group.
As ever members are invited and encouraged to share scenarios both positive and negative of experiences with entering into new farm business tenancies at the moment, with the policy and advisory teams.
Landowners and tenant farmers are at the forefront of food production and environmental stewardship. We are pleased that the UK Government has recognised that proactive collaboration between both parties will always achieve the best outcome. This is particularly true when it comes to taking advantage of the opportunities afforded by new Defra schemes – where the needs of the tenant must rightly be balanced with the rights of the landowner.
We stand ready to work with ministers, officials and representatives of tenant farmers to help generate, after this period of uncertainty, confidence in the tenancy sector. In turn we hope this renewed confidence will help guarantee a consistent supply of land for would-be tenants.