Long-term management of the crown estate in Scotland: analysis of consultation responses

1. Executive Summary

1.1 The Smith Commission (2014) recommended that responsibility for the management of the Crown Estate's assets in Scotland, and the revenue generated from these assets, be transferred to the Scottish Parliament. In 2015, Scottish Ministers committed to seek, in the first instance, devolution of the Crown Estate as a single body, then, in a second stage, develop a long term management framework for the Crown Estate.

1.2 To inform the second stage, the Scottish Government launched a public consultation on the long term arrangements for the Crown Estate in Scotland. The consultation was published on 4 January 2017 with views invited by 29 March 2017. 212 responses to the consultation were received in time for the analysis, 115 from organisations and 97 from individuals. A summary of the views of respondents follows.

Views on the vision for the Crown Estate in Scotland

1.3 75% of the 177 respondents who provided a view considered that the future approach for managing the Crown Estate in Scotland should be changed from the current duty to manage assets on a commercial basis. The view of 89% of those who commented was that there should be a power to take account of wider socio-economic or other benefits in managing Crown Estate assets.

1.4 92% of the 176 respondents who provided a view considered that the requirement on "good management" should be retained; most respondents (79%) held the view that the requirement on "good management" should be amended to take account of environmental implications in relation to the management function.

1.5 A minority (36%) of the 162 who responded considered that the existing Crown Estate portfolio in Scotland should be preserved in its current form; 48% of respondents disagreed (with the remaining 16% not knowing). 81% of the 168 respondents who provided a view considered that manager(s) of Crown Estate assets should need to seek the approval of Scottish Ministers for sizeable sales. There was much agreement (86% of the 176 respondents providing a view) that the general presumption against selling the seabed should be maintained.

1.6 There was a general acknowledgement of the importance of transparency in relation to the sale and management of the Crown Estate assets, albeit respecting issues of commercial sensitivity where these emerge. A common view was that publishing asset information online, including upcoming sales and the performance of assets, would enhance transparency. Many local authorities held the view that transparency can be assured by devolving the management of the Crown Estate assets to bodies which already operate transparent decision-making processes and are accountable to the public.

1.7 A common view was that involving local communities in decisions on the management of local Crown Estate assets will contribute to community empowerment, particularly if a proportion of financial returns are re-invested into local communities, and if local people are involved in opportunities for local economic development.

1.8 Another recurring view was that an increase in local involvement will promote community confidence and the capacity required to contribute positively to land reform issues. Many respondents shared the view that devolution of the management of the Crown Estate has the potential to contribute to greater diversification of ownership of land, a key aim of the land reform agenda.

1.9 An emerging theme was that the strategic framework developed for the Crown Estate in Scotland should make explicit links to the key National Outcomes and other related national policies.

Views on managing Crown Estate assets for Scotland and communities

1.10 Of the three general principles set out by Scottish Ministers to explore opportunities for democratic renewal and decentralisation, much support was provided by respondents for Principle 1: "People should be able to influence decisions that affect them and their families, and trust the decisions made on their behalf by those they elect"; and Principle 2: "Arrangements should be appropriate and tailored towards the needs and aspirations of people and places, to support the delivery of shared National Outcomes".

1.11 There were mixed views on Principle 3: "Arrangements should be effective, efficient and represent value for money for Scotland as a whole", with local authorities, in particular, considering that this could conflict with their statutory obligation to ensure "best value". Some local authorities and COSLA also considered that the reference to "Scotland as a whole" was not in keeping with devolving management to local levels.

Design options for the Crown Estate in Scotland

1.12 Three design options for managing the Crown Estate assets in Scotland were put forward in the consultation. Option 1 proposed to retain management of all assets at the national level; option 2 proposed devolving management of all assets to local authorities or communities; and option 3 proposed consideration on a case-by-case basis. There was support expressed for each option, but the option receiving most support from respondents was option 3, the preferred option of 69 (38%) of the 180 respondents who provided a view.

1.13 Of the 173 respondents who commented, 42% supported a functional approach to guide the reform of the management of the Crown Estate in Scotland; 31% supported a geographic basis; 9% did not know; and the remaining respondents proposed another approach. Those most in favour of a functional approach were leisure and tourism bodies, other commercial organisations and individuals. Those favouring a geographic basis for reform were largely community groups and local authorities.

1.14 A slight majority of 51% of the 142 respondents who provided a view supported management on a geographic basis being led by communities; 28% were in favour of such management being led by local authorities.

Enabling Ministers to reform the management of the Crown Estate

1.15 53% of the 169 respondents who commented considered that Scottish Ministers should have the power to hand responsibility for management of the estate, or parts of it, to a particular person or persons. 65% of the 167 respondents providing a view were of the opinion that Scottish Ministers should have a power to vary management arrangements held by other parties over time. 55% of 161 responding considered that Scottish Ministers should have the power to extinguish rights currently held in the Crown Estate where management of the asset can be adequately covered by other legislation.

Delivering more control for communities

1.16 Respondents provided views on which assets they considered should be managed at national level. Some respondents felt that all assets should be managed at this level. Others highlighted: rights over cables and pipelines; rights to mining and naturally occurring gold and silver; rural estates; leasing for wave and tidal energy and offshore wind energy; and marine assets.

1.17 A common view amongst local authorities in particular, was that local authority level of management is appropriate for most assets in view of the democratic accountability held by local authorities and their proven record of managing assets in the public interest.

1.18 A few respondents considered that individual fisheries, local moorings and, where there is interest, rural estates, could all be managed at community level. A view emerging largely from the ports and harbour bodies was that management of harbour areas should "remain" within trust port control.

Delivering further devolution of Crown Estate assets

1.19 57% of the 169 respondents who provided a view considered that local authorities or communities should be expected to make a case for further devolution, with most respondents (86% of 118 responding) agreeing that local authorities or communities should be required to demonstrate the capability to ensure the appropriate management, to maintain service delivery and to deliver increased benefits.

1.20 Suggestions were made for approaches to minimise potential risks of fragmentation of the Crown Estate management. Most commonly mentioned were ensuring that local management approaches align with national strategy and outcomes; and to establish a central administrative function which sets fees and other charges, but allows for local flexibility.

1.21 There were mixed views over whether shared services should be a requirement of devolution to the local level of decision-making on property, rights and interests of the Crown Estate. Those in favour included many leisure and tourism bodies and respondents in the "other commercial" category. Advantages were identified as ensuring consistency of approach to management, and minimising local exploitation at the expense of broader public interest. Local authority bodies, in particular, were generally opposed to the proposal, considering it unnecessary as local authorities and local communities already demonstrate their competence to manage local assets. Some stated that local decision-making should mean just that.

1.22 The most frequently identified challenges to devolution, expressed by respondents across a wide range of categories, were lack of the local expertise required to manage large projects, and lack of expertise in generating and sustaining revenue.

Strategic planning and a national framework

1.23 84% of the 170 respondents who provided a view considered that there is a need for strategic planning and a long term investment strategy in order to co-ordinate work to enhance the value of the estate.

1.24 Almost all of the 104 respondents who provided a view envisaged benefits of putting in place a national framework to govern further devolution opportunities. Many supporters, from a wide range of categories, emphasised the need for the framework to provide guidance only, so as not to be overly prescriptive.

1.25 65% of the 166 respondents who gave their view considered that there should be consistent charging approaches between areas to avoid competition between different parts of Scotland.

1.26 57% of the 159 respondents providing a view perceived a need for a phased approach to introduce reforms to the management of Crown Estate assets in Scotland. There were mixed views on whether future arrangements in Orkney, Shetland and the Western Isles should be considered first in a phased approach to devolution. 42% of respondents were in favour; 35% were against; and 23% did not know. 59% of the 167 respondents who commented suggested that there would be value in conducting a pilot scheme prior to implementing reforms. A common view was that long term arrangements will be informed by the lessons learned from pilots.

Securing the benefits for Scotland and communities

1.27 56% of the 165 who responded were in favour of the future framework including flexibility for Scottish Ministers to vary the proportion of revenue retained by the manager.

1.28 76% of the 165 respondents providing a view considered that the arrangement whereby the capital value of one part of the estate can be used to enhance opportunities elsewhere in the estate should be continued. There was no overall majority, however, in favour or against the proposal that the current duty of maintaining the value of the estate and the return obtained from it should be continued or amended for the investment of capital proceeds. The majority (65%) view, amongst the 162 respondents who gave their opinion, was in favour of discretion for capital proceeds from a sale in one area to be invested anywhere in Scotland; likewise most (64%) of the 162 commenting considered that it should be possible for capital and maintenance requirements for an individual asset to be funded from another part of the estate.

1.29 83% of those the 165 respondents who provided a view agreed that funding of strategic activities from Crown Estate assets should continue; 81% of the 158 respondents commenting considered that these strategic activities should be managed at the national level.

1.30 80% of the 163 respondents who gave a view were in favour of those taking responsibility for management of an asset to also take the responsibility for managing the associated liabilities. In the case of decommissioning of marine infrastructure, most of the 164 respondents (66%) who commented considered that the liabilities for land restoration and residual liabilities should be managed nationally.

Assessing impact

1.31 A common view was that devolving management to local level will inevitably result in costs, at least in the short-term, due to having to establish new management structures, set up new administrative procedures, upskill local people and help them gain expertise.

1.32 Local authorities were largely represented amongst those envisaging potential savings, in particular, those arising from greater streamlining of the consent/licensing arrangements, and speedier and more responsive decision-making under one-stop-shop arrangements.

1.33 A recurring view was that management of assets at local level will bring a sense of ownership and strong stewardship of assets, leading to better environmental management.