8 SCOTLAND
Extent of holdings
101. Since 2002 the CEC have ceased to treat Scotland
as a separate business division. Nonetheless, we have opted to
consider the CEC's activities in Scotland separately both because
of the distinctive character of their holding and because of the
number of submissions we received expressing concern about the
CEC's lack of accountability in Scotland.
102. In 2009, the CEC produced a Scotland Report
which provided financial figures for the operations of their Marine,
Rural and Urban Estates in Scotland. In total, the Crown Estate
in Scotland accounts for 4% of the value of the overall Estate
and 6% of revenue—so the CEC's interests in Scotland represent
only a very small part of the UK-wide Crown Estate. In Scotland,
the CEC's marine activities produced the largest gross revenue
surplus (£7.4 million in 2008-09), and their rural holdings
had the highest property value (£109.6 million in 2008-09).
103. The Crown property, rights and interests in
Scotland that are managed by the CEC are legally different from
those forming part of the Crown Estate in the rest of the UK.
This is because Crown property rights in Scotland are defined
and governed by Scots law, including Scotland's Crown rights in
Scotland's territorial seabed and continental shelf area. The
distinct character of the Crown rights in Scotland is also reflected
in Crown rights that have no equivalents elsewhere—as shown
in the CEC's schedule in the Appendix. The position is recognised
by the inclusion of provisions relating to the Secretary of State
for Scotland in the Crown Estate Act 1961 and the designation
of one of the CEC Board members as 'Scottish Commissioner.'
104. Devolution is another important part of the
different context in Scotland. As a result of the Scotland Act
1998, the Scottish Parliament can legislate over the extent and
nature of Crown property rights in Scotland, legislate to regulate
the use of land and property rights and issue guidance on standards
of good management. However, the Act reserved the CEC's administration
of Scotland's Crown property rights that make up the Crown Estate
in Scotland, and their revenue to Westminster. The Secretary of
State for Scotland therefore remains the Minister responsible
for the CEC's operations in Scotland.
Issues at stake
105. As we saw in our discussion on the Marine Estate,
the Scottish councils who gave evidence to us were frustrated
with the state of their relationship with the CEC. The Highlands
and Islands councils published a report in 2007 entitled "The
Crown Estate in Scotland—New Opportunities for Public Benefits"[165]
that called for a full review of the Crown Estate in Scotland.
In his evidence to us, Councillor Foxley, Leader of Highland Council,
told us bluntly that "the management of the Crown Estate
should be managed in Scotland...The management should be transferred
to Scotland and then down to the local authorities over certain
aspects to get that management right."[166]
He acknowledged, however, that little had changed since the publication
of the report. Mr Maciver of Western Isles Council further observed
that "there has been a breakdown in relationships."[167]
106. In similar vein, Ms Linda Rosborough, Head of
Marine Planning and Policy, Scottish Government, affirmed the
view of the Scotland Government that the optimum means of improving
relations with the CEC in Scotland would be through the "administration
of the Crown Estate to happen within Scotland under a different
constitutional arrangement."[168]
Short of this though, she told us that "we are looking for
additional leverage over the administration of the Crown Estate
in Scotland."[169]
She acknowledged that "I think the Crown Estate has improved
in terms of the visibility of the work they are doing in terms
of additional investment,"[170]
but felt that problems remained with regard to their accountability,
engagement and involvement in Scottish affairs, observing that
"the Crown Estate is quite an Anglo-centric body as it stands
at the moment."[171]
To counter-balance this, she stressed the importance, "if
we continue with the current arrangement"[172]
that there is a [Scottish] Commissioner who has knowledge of Scottish
interests" particularly "given that half the seas around
the UK are Scottish seas".[173]
107. The CEC have a different view of their Scottish
interests and relationships. Their Scottish Report states that
they are a commercial organisation "but with a difference",
and puts great emphasis on the long-term economic benefits they
bring to Scotland and "the strengths of the partnerships
we have formed". They highlight in particular their major
commitment of time and resources to support the growth of marine
renewables, their £6 million investment over the last three
years in ports, harbours and marinas, their support for fish farming,
and support for Scottish agriculture. They also emphasise their
commitment to improving relationships in Scotland, citing by way
of example the Scottish Liaison Group that they have set up to
"help us work more effectively with our partners in Scotland."[174]
Calman Report and beyond
108. In 2009, the same issues were considered within
the wider context of the inquiry of the Commission on Scottish
Devolution chaired by Professor Calman. The Report acknowledged
that the Commission had received evidence calling for the CEC
to be devolved "to enable the Crown Estate to be made more
accountable and to help ensure that its Scottish assets are managed
in Scotland's interests".[175]
It noted, too, arguments that "the current management of
the Crown Estate focuses too narrowly on securing revenue, leading
to unnecessarily high charges, and that this surplus is not fully
re-invested into Scotland."[176]
It observed though that "an important counter-argument to
this, however, is the benefits that the Crown Estate in Scotland
derives from being part of a much wider (and more profitable)
Estate" and that "Crown Estate profits which flow to
the UK Treasury are also used for the benefit of all UK taxpayers."[177].
109. In sum, the Calman Report did not consider that
legislative competence over the administration of the Crown Estate
in Scotland should be devolved. It did however "take note
of the strength of feeling in the evidence submitted that the
Crown Estate in Scotland has given too great a priority to maximising
income". This of course is precisely what we also found in
relation to the evidence we received on the Urban and Marine Estates.
The Calman report recommended, therefore, that:
The Secretary of State for Scotland should more
actively exercise his powers of direction under the Crown Estate
Act 1961, with the additional requirement for formal consultation
with Scottish Ministers in doing so, to ensure that the Crown
Estate Commissioners, in discharging their statutory duties, have
due regard to Scottish interests and the wider context within
which the Crown estate in Scotland operates.[178]
110. The Calman Report also believed that "it
would be appropriate for the recommendation as to the appointment
of a Scottish Crown Estate Commissioner to be made following formal
consultation with Scottish Ministers",[179]
a recommendation also subsequently accepted by the UK Government.
This seems to us to be a welcome step in the direction of fostering
a closer working relationship between the Scottish Government
and the CEC. We consider though, given the strong cases made by
both Scottish local and national Government, that further steps
are also required. The Scottish Government saw merit in having
a more formal memorandum of understanding or concordat with the
CEC, and during oral evidence the CEC stated that they "would
obviously be receptive to that if it was felt that would be helpful."[180]
We also see merit in this. The extent of the Scottish Government's
powers and responsibilities, including those over Scotland's marine
environment and renewable energy development, mean that it is
essential that there is a close and constructive working relationship
between the CEC and the Scottish Government. Finally, we consider
that in order to engage with the Scottish Government, and to adapt
as necessary to the different public policy environment in Scotland,
the CEC will need greatly to strengthen their management arrangements
within Scotland.
111. The Government's response to the Calman
Report agreed that the appointment of the Scottish Crown Estate
Commissioner should be made following formal consultation with
Scottish Ministers. We endorse this action as a means to improving
the CEC's relationships in Scotland. We recommend, however, that
this initiative be further strengthened through a concordat or
memorandum of understanding between the Scottish Government and
the CEC to consolidate their working relationship, and that the
CEC greatly strengthen their management arrangements within Scotland
to assist this process.
112. The UK Government rejected the Calman Commission
recommendation that the Secretary of State for Scotland should,
in consultation with Scottish Ministers, more actively exercise
his powers of direction under the Crown Estate Act 1961, affirming
only that "the Government recognises the case for proactive
engagement with the Crown Estate in Scotland, and the Secretary
of State does and will continue to engage on important issues
as they arise, but that "the statutory powers of direction
in the 1961 Act, a reserve power for use in extreme circumstances
never used, remains a sanction of last resort."[181]
We explore wider questions about the oversight role of Government
in relation to the CEC, and the scope of its powers of direction,
in the next section.
165 The Report of the Crown Estate Review Working Group,
The Crown Estate in Scotland: New opportunities for public benefits,
December 2006. Our Specialist Adviser was also the Specialist
Adviser for the Councils' Report. Back
166
Q 34 Back
167
Q 37 Back
168
Q 67 Back
169
Q 67 Back
170
Q 71 Back
171
Q 78 Back
172
Q 78 Back
173
Q 78 Back
174
The Crown Estate, Scotland Report 2009, July 2009, Overview Back
175
Calman Commission on Scottish Devolution, Serving Scotland Better:
Scotland and the UK in the 21st century, June 2009,p 179 Back
176
Ibid., p 180 Back
177
Calman Commission on Scottish Devolution, Serving Scotland Better:
Scotland and the UK in the 21st century, June 2009,p 179 Back
178
Ibid., p 181 Back
179
Ibid., p 181 Back
180
Q 152 Back
181
Scotland Office, Scotland's Future in the UK: building on ten
years of Scottish devolution, CM 7738, November 2008, p 28 Back
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