I have several laylandi trees and wondered if I can use the fallen foliage as soil conditioner or compost.?

You can use the dead foliage as mulch around other conifers. They are too acid to use for most plants. You can compost but I would compost seperately from other stuff as it will take ages to rot, try a leylandii and newspaper and gr clippings heap, then it will make a soil conditioner for acid loving plants, don't put it on your veg plot. The bare soil under the trees is probably due to dryness, not anything poisonous in the tree.