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The Crown Estate in Scotland - New Opportunities for Public Benefits

21st February 2007

A major report, published today (Wednesday 21 February 2007), sets out the case for a review of the Crown Estate in Scotland so that the resources involved, including Scotland's seabed and much of its foreshore, produce greater benefits for local communities.

The report - ~The Crown Estate in Scotland ~ New Opportunities for Public Benefits - has been produced by the Crown Estate Review Working Group, which consists of representatives of all six local authorities covering the Highlands and Islands as well as Highlands and Islands Enterprise (HIE), and the Convention of Scottish Local Authorities (COSLA).

These organisations have all endorsed the report and copies have been submitted to the First Minister, Jack McConnell, and the Secretary of State for Scotland, Douglas Alexander, with a request for a meeting to discuss the report's recommendation that: "The Secretary of State for Scotland and Scottish Ministers should, given the changed circumstances of devolution, implement an appropriately constituted review to ensure that the property, rights and interests which make up the Crown Estate in Scotland contribute more fully to the delivery of Scottish Executive policies and the wellbeing of the people of Scotland".

Expectations within the partners that there will be a review have increased as both the Secretary of State and First Minister have already said they will examine the report closely.

The property rights, which make up the Crown Estate in Scotland, are managed by the Crown Estate Commission (CEC) as part of the UK-wide Crown Estate, but are a distinct component of it because they are owned by the Crown in Scotland under Scots law.

Chairman of the CERWG, Councillor Richard Durham, said: "Many people have heard of the Crown Estate, but most are uncertain about what it is and how it is managed. This report clears away the mist. It provides for the first time a clear description of the property rights which make up the Crown Estate in Scotland, including their nature, ownership, use and management. The report then identifies ways in which these property rights could be managed to deliver greater public benefits and accountability in Scotland."

Since devolution, the Scottish Parliament can legislate to affect the Crown Estate in Scotland, but the administration of these Scottish property rights by the CEC is still reserved as a legacy of the transfer of the administration to London in the 19th century.

Each year more than 80% of the CEC's income from Scotland is net surplus revenue that goes to the Treasury's Consolidated Fund for general government expenditure. There are other property rights of the Crown in Scotland that are already devolved to the Scottish Executive and contribute to the Scottish Consolidate Fund.

There has been a marked contrast in the response of the CEC to devolution compared to that of the Forestry Commission (FC), which was in a similar position to the CEC at devolution. Both have re-structured their operations in Scotland since 1999:
~ the FC has created Forestry Commission Scotland accountable to the Scottish Parliament and acting as a department of the Scottish Executive to help deliver the Executive's policies in Scotland
~ the CEC has ended its management of the Crown Estate in Scotland as a distinct unit of the Crown Estate (the Scottish Estate), closed its Scottish HQ and integrated the management of the property rights of the Crown in Scotland sector by sector with those in the rest of the UK.

The CERWG report shows that there are immediate opportunities to increase the benefits from the Crown Estate in Scotland within existing arrangements as well as further opportunities under more devolved arrangements. The planned Marine Bill at Westminster is identified as a key means by which Scotland could again become responsible for the administration of its own territorial seabed.

Councillor Durham added: "It is over 50 years since anyone had a proper look at this issue. There is now a compelling case for new arrangements given the changed circumstances of devolution. This is a Scotland-wide issue, but there is particular potential for the management of Scotland's seabed and public foreshore to contribute far greater benefits to the many remote and rural communities in the Highlands and Islands. Increased local control and accountability will be particularly important with the development of marine renewable energy in the region."

The CERWG's landmark report is over 180 pages long. It is available as hard copy and on Highland Council's website www.highland.gov.uk via the home page.

Or go directly to the report at -
Crown Estates Review

In case you are short of time and do not want ot read 180 pages in the report here are the conclusions -

CONCLUSIONS
1.
This report has considered the property, rights and interests which are owned by the Crown in Scotland and managed by the CEC as part of the UK wide Crown Estate.
2.
There are relatively few public benefits in Scotland from the way these Scottish resources are managed at present, most notably the CEC's management of Scotland's territorial seabed and continental shelf rights and approximately half of Scotland's foreshore. The very limited accountability in Scotland over the management of these Scottish resources has also become worse since devolution.
3.
The reason why these ancient possessions of the Crown in Scotland are still managed by the CEC as a public body based in London and with 95% of its business outside Scotland, seems simply to be a legacy of the transfer of the administration and revenues of Scotland's Crown lands to London in the 1830s1.
4.
There have long been criticisms in Scotland of the approach of the CEC to managing the Crown Estate in Scotland. The most prominent issue is the adverse impact of the seabed and foreshore charges introduced by the CEC in the last 40 years on public sector and community interests in the Highlands and Islands. There seems a stark contrast between:-
− the CEC approach of acting as a leading property investment company and operating through private sector property companies to generate revenue from these resource; and
− the ways in which the public interest in the Crown's ownership of the seabed and public foreshore could be managed to complement Scottish Executive's policies designed to support rural, coastal and island communities and the public interest more generally.
5. While the CEC's management of the Crown Estate in Scotland and its revenues are both reserved under the Scotland Act 1998, devolution has also created new types of influence in Scotland over the ways in which these property rights of the Crown in Scotland are managed. These include:-
− Ownership: the scope for the Scottish Parliament to legislate over the nature of the Crown's ownership of property, rights and interests in Scots law;
− Regulation: the scope for the Scottish Parliament to regulate the use of these Crown property rights;
− Guidance: the scope for the Scottish Executive to provide guidance to the CEC, as part of the public policy context in Scotland, related to the management of these property rights within the overall terms of the Crown Estate Act 1961.
6. In addition, there is the Secretary of State for Scotland's comprehensive power of direction over the CEC2. The range of different types of Crown property rights involved in the Crown Estate in Scotland also means that there may be opportunities for the administration and revenues of some particular rights to be devolved in relevant UK legislation under the UK government's continuing commitment to the devolution process3.
1
It might be noted that if the devolution of the administration and revenues of the properties and right which make up the Crown Estate in Scotland was to take place under the CEC's current and Scottish Chairman, that it was a Scottish administrator (John Fordyce) in London who was the architect of the original Commission and responsible for the incorporation of Scottish interests into it in the first place. (The Crown Estate. R.Pugh (HMSO, 1960))
2
with 'comprehensive' meaning all actions within the CEC's legal competence;
3
for example, the planned UK Marine Bill (Annex 15)

7.
Most criticisms of the CEC's management in Scotland have understandably been directed at the CEC, but devolution means that the Scottish Executive now have a role and responsibility in determining that management1. The issues and opportunities raised in this report therefore pose questions about why the Scottish Executive as represented by SEERAD, is so apparently content with the current management of the property rights which make up the Crown Estate in Scotland2.
8.
More generally, there appear several other factors which seem to have been obstacles to the reform of the Crown Estate in Scotland since devolution. These include:-
− a widespread lack of understanding about what the Crown Estate in Scotland is and how it is managed, linked to confusion as to whether the Estate is something "royal" or 'constitutional' and therefore in some way beyond reform;
− the lack of accountability of the CEC in Scotland and the ways in which the CEC, as a very large and powerful organisation, deploys its influence to maintain its interests as it sees them;
− the disjointed nature of the opposition to the CEC's approach in Scotland, because concerns are usually based on particular sites or issues and because of the general lack of the types of information which would enable a more strategic approach;
− the tendency of many critics of the CEC to see the Crown Estate as an issue of resource ownership, when the resources are already publicly owned in Scotland and it is essentially a matter of the administration of these Scottish resources.
9. The information in this Report about each of the different types of property rights which make up the Crown Estate in Scotland and the suggestions made about ways their management could deliver greater benefits and accountability in Scotland, indicate the potential that:-
the Secretary of State for Scotland and Scottish Ministers should, given the changed circumstances of devolution, implement an appropriately constituted review to ensure that the property, rights and interests which make up the Crown Estate in Scotland contribute more fully to the delivery of Scottish Executive policies and the well being of the people of Scotland.
10.
This Report is a contribution to such a review. It is for the devolved government in Scotland, whether directly or through a committee, to conduct such a review. As a first step, the Scottish Executive might produce an official list of the property rights and interests of the Crown in Scotland forming part of the Crown Estate and use the expertise available within its departments to provide an analysis of each component listed.
11.
The composition of these Crown rights and the nature of their administration has evolved over time. Fifty years ago, the Crown Estate Act 1956 created the Crown Estate in name for the first time and constituted the Crown Estate Commissioners (CEC) to replace the Commissioners of Crown Lands. The changes resulted from the recommendations of the review carried out by the Committee on Crown Lands.
12.
The impetus for those changes was to replace government ministers (the Minister of Agriculture and Secretary of State for Scotland) with an appointed management board similar to that of the Forestry Commission (FC). Now, circumstances have changed with
1
The CEC Chairman has confirmed to the CERWG that the CEC will respond to guidance from the Scottish
Executive within the terms of the Crown Estate Act 1961 (12th June 2006)
2
While the interests of the Crown Estate in Scotland relate to several Scottish Executive Departments, SEERAD
appears to have taken a lead on the Crown Estate.
90
devolution and the need for a review is to improve the accountability over and benefits from the Crown Lands of Scotland in Scotland, compared to the CEC's operations in the rest of the UK. The FC might again provide a model as in the 1950s, this time in the FC's response to devolution compared to that of the CEC.
13.
The administration and revenues of some of the property rights of the Crown in Scotland are already devolved to the Scottish Executive. Others which are still managed by the CEC as part of the Crown Estate in Scotland could follow, for example, through the planned UK Marine Bill.
14.
In considering the case for a review, some of the lesser property rights of the Crown in Scotland might be seen as historical anachronisms where reform will bring only modest benefits. However, reforming the management of Scotland's seabed and public foreshore offers an opportunity to secure benefits on what might be considered an historic scale to Scotland's coastal and island communities and the nation as a whole.
15.
The reform of these property rights of the Crown in Scotland could be as symbolic for Scotland as the Scottish Parliament's abolition of other property rights of the Crown in Scotland with feudal reform. The potential benefits for Scotland in this case, however, would be much more tangible and substantial

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