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

Background

The Scottish Crown Estate generates value through leasing and sustainable management of assets across Scotland, including much of the foreshore, seabed and fishing rights. In 2014, the Smith Commission, established to discuss devolution of powers, recommended that the management of Crown Estate assets in Scotland should be devolved from UK level. These recommendations were accepted, and legislation within the Scotland Act 2016 including provision for the devolution of Crown Estate assets in Scotland. Crown Estate Scotland (CES) was established by the Crown Estate Scotland (interim management order) in 2017, and took on the responsibility for the Scottish Crown Estate.

Crown Estate Scotland is a public corporation of the Scottish Government. It sits in the broader portfolio of activity supported and led by Marine Scotland Directorate and the Crown Estate Strategy Unit (CESU). Marine Scotland Directorate and CESU work to ensure harmony between the different activities and funds that are available to support coastal communities.

Crown Estate Scotland

Crown Estate Scotland manages the assets of the Scottish Crown Estate, which span seabed, coastline, rural estates and more, including key sectors such as offshore renewables, aquaculture, farming and ports and harbours. Their core purpose is investing in property, natural resources, and people to generate lasting value for Scotland. As managers and coordinators, Crown Estate Scotland's priorities and actions are intended to complement, guide and support both Scottish Government and Local Authority decision-making.

The Crown Estate Scotland corporate plan identifies priorities for the organisation moving forward, focusing on the responsibility to manage the assets in a way that delivers for all, including building a net zero emissions economy. This includes raising and reinvesting capital to secure long-term revenue streams, with a key focus on activity that helps meet Scotland's target of net zero emissions by 2045.

Crown Estate Scotland's new strategic framework within the CES corporate plan focuses on five key objectives:

1. supporting sustainable expansion of the blue economy

2. creating great places

3. promoting sustainable natural resource use

4. involving people in how the Estate is managed

5. using skills to benefit others

From 1999 to 2014 the Marine Stewardship Fund was the principal mechanism used by The Crown Estate to support communities. From 2013 to 2017, support was achieved through the competitive Coastal Communities Fund (CCF) managed by the BIG Lottery. This funding of CCF also established a link to net revenues, with the funds being derived from 50% of the net revenues from Crown Estate Marine Asset Activities. The CCF has now closed with the final tapering of support wrapped into the first round of net revenue distribution. Further details on these funds are in Annex 1. Crown Estate Scotland now manages other funding opportunities, such as the Capital Investment Challenge Funds, which are designed to invest in opportunities which contribute to meeting CES core objectives.

The challenge funds cover three themes:

1. Boat-based tourism

2. Local partnerships

3. Innovation with natural resources

Net Revenues

The commitment to giving island and coastal Local Authorities a share of the net revenue generated from the Scottish Crown Estate out to 12 nautical miles was set out in the 'Empowering Scotland's Island Communities' prospectus. Published on 16 June 2014 and recommended jointly by Scottish Ministers and Island Council Leaders, the prospectus was later extended in 2016 to include coastal councils.

"I believe strongly in maximizing the benefits of the Scottish Crown Estate and the allocation of £7.5 million to coastal communities the length and breadth of Scotland is the latest step in achieving this.

The new funding arrangement will see coastal communities receive 100% of revenue generated from the Estate's marine assets out to 12 nautical miles around Scotland, enabling them to better fund and support local projects and initiatives.

This government is delivering on our commitment to bring financial benefits to communities from the Scottish Crown Estate marine assets and enabling more decisions to be taken at the local level. I look forward to seeing how councils use this exciting opportunity to benefit their coastal communities."

Roseanna Cunningham MSP, Former Cabinet Secretary for Environment, Climate Change and Land Reform, 2019

Roseanna Cunningham, then Cabinet Secretary for Environment, Climate Change and Land Reform at the time, announced the commencement of the scheme on 29 September 2019.

It is important therefore to note that the distribution of net revenues is not a replacement "fund" for earlier funding streams, but rather a product of empowering local communities.