AN ISLAND where one of the first community buyouts in Scotland took place is heavily in debt.
The Isle of Gigha, between the Kintyre peninsula and Islay in Argyll and Bute, was transferred to community ownership for £4 million in 2002.
But now the Isle of Gigha Heritage Trust (IGHT), which owns the 3,500-acre island, is facing significant financial problems, with reported debts of £2.7m. Gigha’s population has increased to about 170 since the buyout, when it was 98.
A vote of confidence has been called for this week by the chairwoman of the trust to take forward new business plans.
Local MSP Mike Russell said the financial problems stemmed from the £1m that had to be repaid within two years as part of the condition of sale, forcing islanders to sell a property that would otherwise have made them money.
The islanders also carried out extensive improvements to properties that had been neglected for many years, putting further financial pressures on the trust.
Mr Russell said: “I have met with trustees on a number of occasions and I will continue to do so. The trust has done very important things really well. The resources have been very challenging but the problems are perfectly solvable.
“I’m in absolutely no doubt that the islanders are much better under community ownership than if they had remained under private ownership.”
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IGHT chairwoman Margaret McSporran called a “vote of confidence” for later this week. She was not available for comment yesterday.
Former MSP and minister Peter Peacock pointed to the many successes on the island, including 18 new social houses, 12 new private homes, the UK’s first community-owned wind farm that is connected to the grid, restoration of Achamore Gardens, a children’s playpark and ten new businesses being set up.
He said: “A number of community owners have borrowings to make important investments, and depending on when you look at the debt and its terms, communities might seem quite indebted. The asset value of Gigha is at in excess of £6m, I understand, so the debt has to be seen in that context.
“The IGHT are in the process of re-focussing their business plans and have been getting some help from HIE [Highlands and Islands Enterprise] in thinking this through. There is nothing particularly unusual in this. This is all going to the community for approval, so all of the detail is public – the nature of democratically owned community companies.”
He added: “The chair of the trust wanted to know she had support to deliver the proposed plans so I understand that she chose to put this as a vote of confidence in her to give her the necessary backing to lead the delivery of the plans, or not. Would that some private owners would subject their plans to such scrutiny and to a vote of confidence from the community in them.”
Gigha has 47 cottages, four farms, a hotel, quarry, wind farm and 54-acre garden.
The island was sold by millionaire Derek Holt and became the second island, after Eigg in 1997, to be bought by residents. Since then there have been a number of other purchases and ministers have vowed to double the number of acres of land sold back to communities to one million by 2020.
In June, a land reform group reported to the Scottish Government that a large increase in community land ownership was needed to break the concentration of private land.
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