Supporting impact - Scottish Crown Estate net revenue: local authority use and insights

Discussion and conclusions

The distribution of net revenues from the Scottish Crown Estate to Local Authorities to be used for the benefit of coastal communities is part of the Scottish Government's commitment to ongoing community empowerment and supports its commitment to the development of community management and decision-making. The first two rounds (2017-2018 and 2018-2019 revenues) distributed more than £16,895,000 to coastal Local Authorities in Scotland, with a deliberately flexible and light touch approach to guidance, restrictions and reporting.

Interviews with Local Authority representatives highlighted that the distribution of net revenues was considered a valuable resource, particularly in terms of the flexibility of the use and the minimal administrative burden. Some challenges were observed, such as the limited timeline and focus on spending within the year, but these should be reduced as revenues are distributed year on year and processes are established and embedded.

The flexibility of the approach was empowering and, in keeping with the broader goal to support local decision making, each Local Authority adopting a unique, place-based approach to the use and distribution of net revenues. Guidance changed during the second-round to allow for monies to be diverted towards COVID-19 pandemic emergency needs, which necessarily influenced the scope and scale of projects that have been supported over the first two rounds.

Projects ranged from the small-scale and community-led such as beach cleans and wildlife gardens, to large-scale infrastructure projects such as coastal flood defences. Overall, projects showed a bias towards smaller-scale, single projects and socio-economic outcomes, driven in part by the priorities set by the local approach. This was reinforced by the impact of the COVID-19 pandemic, which prioritised economic rescue and recovery for the second round of net revenues.

Discussions around risk and innovation highlighted that the response of most Local Authorities to risk was considered and proportionate. However, in the current form, the guidance on distribution of net revenues is wide in scope. This would potentially allow for Local Authorities to adopt a higher risk appetite, particularly around targeted new projects. While necessarily needing to be managed and appropriate for each area, this allows for future greater investment in innovation, opportunities to rapidly develop new approaches through offering 100% project funding, or a focus on proof-of-concept studies.

All Local Authorities considered how to effectively engage with community priorities in distribution, although approaches differed between each council area. Each approach has benefits and challenges which will vary, and there is no clear, one-size-fits-all approach. A broad distribution and decentralized decision-making process can bring communities to the heart of the process, but may come at the cost of more cross-cutting projects, and may run the risk of funds being so widely dispersed that the impact is diluted.

Conversely, fewer, larger investments driven by a centralized decision-making process run the risk of being seen as distant to communities, lacking empowerment and could lead to disproportionate benefit for a minority in the community. These approaches need to be balanced moving forward, with future engagement building on the work done during the first two rounds, particularly in capacity building, allowing for deeper engagement and greater community empowerment.

Overall, net revenues have and will continue to offer an exciting opportunity to achieve community-driven environmental and socio-economic outcomes. There is scope for future rounds to move towards a greater contribution to national priorities around green recovery, blue economy and a just transition to net zero, through larger-scale cross-border approaches, leverage and innovation. Some of these approaches are explored in Section 2.