The management of the Crown Estate - Treasury Contents

Written evidence submitted by the Scottish Government

  The Crown Estate in Scotland is substantial, including 36,000 hectares of rural land, split into five estates, mixed office and retail property and around half of the foreshore and almost all of the seabed out to the 12 nautical mile territorial limit. The revenue from this property is paid to the Treasury.

  The Scotland Act includes a specific reservation of the management of the Crown Estate which limits the engagement of the Scottish Parliament and Scottish Government in respect of the Estate and of the Crown Estate Commissioners.

  For some years there has been concern in Scotland, largely from marine users, about whether the management of the Crown Estate in Scotland was sufficiently attuned to Scottish interests.

  The Crown Estate has recently sought to increase its engagement with Scottish interests. The Scottish Government now has observer status on the Crown Estate Scottish stakeholder group and has also been working in partnership on a number of projects, particularly on marine issues. The role of the marine estate is particularly important because of the substantial wave, wind and tidal resources in the waters around Scotland.

  The position of the Crown Estate was highlighted in the Scottish Government White Paper "Your Scotland Your voice; a National conversation". In particular, this highlighted that revenues collected from Scottish coastal businesses by the Crown Estate bring very little visible benefit to Scotland.

  The Commission on Scottish Devolution recommended that the United Kingdom Government should consult Scottish Ministers and more actively exercise powers of direction under the Crown Estate Act 1961. The Commission also proposed that the appointment of a Scottish Crown Estate Commissioner should be made following formal consultation with Scottish Ministers. These recommendations have not yet been implemented.


  The effectiveness of The Crown Estate Commissioners in rising to the challenge of developing renewable energy in the Marine Estate is of high strategic importance to the Scottish Government. One of the Scottish Government's key priorities is the development of a successful renewable energy industry—underpinned by the enormous natural resource that exists in Scotland and around its coastline. Ambitious targets have been set to meet 50% of Scotland's electricity demand and 20% of primary energy demand from renewable resources by 2020.

  Although onshore wind accounts for much of Scotland's existing installed renewable energy capacity, offshore wind and marine renewable energy will play an increasingly important role in the years up to and beyond 2020. Scotland is estimated to possess 25% of Europe's offshore wind and tidal resource and 10% of its wave energy resource which provides significant potential for harnessing renewable energy.

  In terms of renewable development, to date, the Scottish Government's principal involvement with The Crown Estate has centred on activities relating to the Round 3 and Scottish Territorial Waters offshore wind zones, as well as the marine leasing round in the Pentland Firth and Orkney Waters area.

  Generally, the Scottish Government, Marine Scotland and the economic development agencies have developed a positive and constructive working relationship with the Crown Estate.

  A good example is the work that is being taken forward through the Pentland Firth Coordination Committee. The Pentland Firth Coordination Committee is led jointly by the Crown Estate, Scottish Government, Highlands and Islands Enterprise, Highlands Council and Orkney Islands Council. The Committee is focussed on successful delivery of projects with lease awards comprising 700 MW of installed wave and tidal energy capacity in the Pentland Firth and Orkney Waters area. Therefore, the interest of the Committee is primarily on identifying and addressing barriers to the development of these marine renewable projects to allow these projects to deliver to their project plans. Good progress is already being made and this is largely due to the high level of cooperation and joined up working amongst the Pentland Firth Coordination Committee partners and their efforts in engaging with a broad range of interested stakeholders.

  Given the fragile coastal economies in many parts of Scotland and the competition for use of marine space, it is important that wider socio-economic benefits from marine energy are seen as fair and equitable. However it remains the case that the administration of the Crown Estate gives the highest priority to revenue generation and appreciation of assets in the short and medium terms and this can limit the readiness of the Estate to support activities which have longer paybacks and returns are less certain.

  The Crown Estate has taken a very constructive, approach to supporting the development of marine renewables. But there are issues on the status of activities which improve sustainability, against that of other economic activities. This could have the unfortunate implication of constraining the progress of emerging industries, which have huge potential, such as wave and tidal energy but where the business case is less robust. The Scottish Government believes that a stronger focus on sustainable development would be a more appropriate basis for the approach to the exploitation of these national assets, given our international commitments on climate change.

February 2010

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