Scottish Affairs - Minutes of EvidenceHC 1117

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Scottish Affairs Committee

The Crown Estate in Scotland

Monday 31 October 2011


Brian Swinbanks, Robert Clement and Captain Ron Bailey


Evidence heard in Public Questions 188 - 286



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Oral Evidence

Taken before the Scottish Affairs Committee

on Monday 31 October 2011

Members present:

Mr Ian Davidson (Chair)

Jim McGovern

Graeme Morrice

Mr Alan Reid

Lindsay Roy


Examination of Witnesses

Witnesses: Brian Swinbanks, Chair, Tobermory Harbour Association, Robert Clement, Chairman, West Highland Anchorages and Moorings Association, and Captain Ron Bailey, Harbour Master, Clydeport Operations Limited, gave evidence.

Q188 Chair: Gentlemen, there is a photographer here who wants to take a photo of you. Apparently we have to do it before we formally start, so if you do not mind sitting there while he takes a photo of us, and hopefully we will be ready to start before 3.00pm.

The Committee paused for photographs.

Q189 Chair: Right, could I start the Committee then, gentlemen? Could I apologise, first of all, for that slight delay and welcome you to this meeting of the Scottish Affairs Select Committee in Glasgow. As you are aware, we are looking at various aspects relating to the Crown Estate, and particularly today we are wanting to meet local authorities and yourselves. I wonder if I could start off by asking a number of points about Clydeport and your operations. In particular, just for the record, could you just tell us who Clydeport are, what you do, who owns you, how big you are?

Capt Bailey: Good afternoon. My name is Ron Bailey. I am the Harbour Master for Clydeport and have been for the last 15 years. Clydeport are a statutory harbour authority. We have, we understand, the largest area of jurisdiction in Western Europe, some 450 square miles. We have an annual turnover of approximately £50 million and about 250 employees. We operate our own ports at Hunterston, which imports coal, power station coal; Greenock, which exports whisky-cruise vessels come in; 40 I think we have for next year-and also building materials. King George V dock has a lot of turbines coming in now, wind turbines, for the various developments onshore in Scotland, and there is building products, cement, animal feed and so on. In addition to that-those are the three berths that Clydeport operate-there are many independent berth operators. There are berths that export scrap. There is the Finnart terminal in Loch Long. That is connected to Grangemouth so it imports crude oil and also exports refined products. In Rothesay dock at Clydebank we have over 1 million tonnes of petrol and diesel coming into the port. We share the port with the Royal Navy and, of course, there are also very many leisure activities. We have over 1,500 leisure moorings within the Clyde and we have commercial fishing as well. We are part of the Peel Ports Group. The other ports within the group are Mersey Docks and Harbour Company, the Port of Heysham, Manchester Ship Canal and Medway Ports.

Q190 Chair: Can I just clarify the responsibility and role of Clydeport for the management of the River Clyde and its estuary? You are a private organisation, privately owned, yet you clearly have wider responsibilities for the running of the river and the estuary. Can you just clarify what these are?

Capt Bailey: Yes, that is correct. I should have said as well I am also here today to represent the British Ports Association, who represent the majority of ports within Scotland. That then leads me on to the types of port. There are municipal ports, municipally owned and operated ports. There are trust ports, of which Aberdeen would be the best example or the largest example in Scotland. On private ports, we did have plc ports of which Clydeport in the old days-a few years ago-was one, and Forth Ports is the last one that has just recently gone into private ownership. But no matter where or what the ownership of the particular port is, we all have the same statutory duties, which is the safety of navigation and the regulation of navigation for water users in our port area. The public have a right to navigate. Ports have a right to make reasonable charges and they have a statutory duty to ensure that it is safe, that those who choose to navigate do so within their own waters.

Q191 Lindsay Roy: Good afternoon. What responsibility does the Crown Estate have for the seabed and foreshore within your harbour area?

Capt Bailey: The Crown Estate operates as the landlord and gives, or we negotiate-not just Clydeport-leases with the Crown Estate for the use of the seabed. That is done for commercial reasons, but also I chair a committee called the Clyde Moorings Committee in which these 1,500 moorings that I talked about, private moorings and some commercial moorings, deal with the Crown through us. We give permission from a navigational point of view. They lease a proportion of the seabed. We prefer if they do it through mooring associations. It is cheaper for them and it is also easier to regulate, and that then goes through to the Crown. Of course, we also have fish farms and so on-so anything to do with the seabed. Where it has been artificially made, the Crown do not own that proportion.

Q192 Lindsay Roy: How meaningful are the negotiations? In other contexts we have heard that the Crown Estate has more or less dictated the terms.

Capt Bailey: Well, if I might just quote from the British Ports in Scotland: "It is our experience that over the past 10 years and starting from a position where there was strong criticism of the way in which the Crown Estate went about lease negotiations, the British Ports Association is now in a position where there is relative satisfaction with the lease agreements that have been reached and the way in which they have been negotiated, albeit that there will always be some tensions in the landlord-tenant relationship." To move or to drill down, as seems to be the phrase these days, a little bit more into that, there are always going to be difficulties with this landlord-tenant arrangement. On occasions, the Crown can be perceived to be slow and difficult to deal with. There is a tendency, we would feel, for their lease agreements to take a disproportionate amount of value, given that it is generally areas that they give to us that need an awful lot of capital investment to realise any value at all. I am not talking about moorings here; I am talking about commercial use of their land.

Q193 Lindsay Roy: What kind of figure are we talking about in terms of payments to the Crown Estate for the use of the seabed and the foreshore with your businesses, roughly?

Capt Bailey: That would be very difficult for me to give and I am afraid I did not come prepared for that particular question.

Q194 Chair: Well, if there is anything like that that any of you are asked, you can maybe just drop us a note afterwards. We are not trying to catch you out, but if there is information requested that you do not have at your fingertips, you can maybe just let us know subsequently.

Capt Bailey: Yes.

Q195 Lindsay Roy: Can I just follow that up? Do you think that the rental charges and other payments that you make are on a fair basis?

Capt Bailey: I would split that into two halves. I think on the mooring side of it they are, yes. On the commercial side, we as Clydeport-and I am not trying to be evasive here but it is not something that I deal with-my property colleagues I am sure would always argue that they were paying too much.

Q196 Lindsay Roy: Why do you think that is?

Capt Bailey: That’s the nature of the game, isn’t it? But if I could take that question away, particularly the previous question on the figure, and come back to you rather than pluck a figure from the air.

Q197 Lindsay Roy: Can you give us a few words that would describe your working relationship with the Crown Estate, that characterise the relationship?

Capt Bailey: I have been dealing as Harbour Master with the Crown Estate, as I say, for 15 years. I would think it was about five, six, seven years ago when there was a company called Bidwells who became their agents and were introduced into the equation. Bidwells seem to be a little bit more aware of the sensitivities when dealing with leaseholders or potential leaseholders. Generally speaking, we find that it has improved significantly over the last seven or eight years.

Q198 Lindsay Roy: That is a couple of words. Have you any other words that you would use to characterise the relationship-things like trust, integrity?

Capt Bailey: I have no reason to doubt their trust or their integrity at all. I have always had very good dealings with them. If we have had a problem, we have been able to resolve it.

Q199 Lindsay Roy: The culture of secrecy, which has been put forward as a way in which the Crown Estate deal with some of these rental charges?

Capt Bailey: Not that I have experienced, no.

Q200 Jim McGovern: Could you tell me, please, Mr Bailey-

Chair: Sorry, could you press your button?

Jim McGovern: I beg your pardon, I am sorry. I think everybody forgets that the first time. Could you tell me, are there any other large private sector harbour operators in Scotland similar to Clydeport, for example, in the Firth of Forth; and if so, are they paying, as far as you are aware, similar charges to the Crown Estate?

Capt Bailey: Well, yes, of course, there is Forth Ports, which are on the east coast. As far as I am aware, they are paying similar charges to the Crown Estate, yes.

Q201 Jim McGovern: Being slightly parochial, do you know if that would apply to Dundee, because I think Dundee is run by Forth Ports? That is my constituency.

Capt Bailey: Sorry, I missed that one.

Jim McGovern: Would that apply to Dundee as well? I think Forth Ports run Dundee. I don’t know if you would be aware of that.

Capt Bailey: No, I am obviously aware of Dundee and I know the harbour staff there, albeit most of them are based in Edinburgh now. I have no reason to doubt that there would be any difference whatsoever. As far as I am aware, there is a fairly common charging structure across Scotland.

Q202 Lindsay Roy: Would it be fair to say that you don’t have a great deal of dialogue with Forth Ports Authority about the Crown Estate?

Capt Bailey: As we are rival companies, that would be correct.

Q203 Lindsay Roy: Is it not in your interest to share information, particularly if-

Capt Bailey: Particularly on the Crown Estate-

Lindsay Roy: -you feel you are being overcharged?

Capt Bailey: We have never had the need to do that, no.

Q204 Chair: Could I just follow that up, and I will try this without the microphone because there is quite a bit of boom and I am not quite sure whether or not this is better. I am struggling slightly to try and work out the relationship between yourselves and the Crown Estate in terms of financing. I have almost never come across a situation where the tenant did not feel that they were being overcharged and the landlord, as it were, felt that they were overcharging. Presumably, you have benchmarks that you can compare with what is happening elsewhere in the UK. To what extent are the Crown Estate charges reasonable as compared to what would be appropriate elsewhere in the UK or anywhere else?

Capt Bailey: This is where, for myself, this becomes a little bit difficult. I am talking on behalf of the Scottish Ports Association. David Whitehead, who is the director based in London, deals with all of the ports on a national basis, so he would be better placed to answer that question. Again, I would have to take that back to him.

Q205 Chair: But surely you must have an impression. It must be something that either is or is not talked about at the office-how outrageous it is in Scotland or how outrageous somebody else is. If you are saying that there is no discussion about that, well, that tells us something.

Capt Bailey: On the mooring side, there is very little, almost no discussion about it. Obviously, you will always get somebody objecting to the price of moorings, the very fact that there had to be moorings. For a long time the Rothesay charter was talked about. Moorings in Rothesay were to be free, it was deemed. That was settled, I think, in the Court of Session last November. You are obviously always going to get some people who do not want to pay. What we try to do on the moorings side is to impress upon people the value that they are getting from that, in that you are getting a secure mooring. You are not going to get a free for all. You are going to get something that is protected and-

Q206 Chair: No, I understand that side of it. Do people feel that it is better like this?

Capt Bailey: Yes, personally I do.

Chair: I don’t know whether those in the cheap seats, as it were, at the back-you can’t hear anything? You can’t hear the witnesses. In that case, we had better use the microphone, then.

Capt Bailey: Sorry, could I just read from what I was given by-

Chair: Could you put your microphones on, because they can hear us but they can’t hear you.

Capt Bailey: If you could just bear with me, I don’t know if this paragraph will help. Devolving the Crown Estate’s affairs to Scotland-I am quoting a paragraph here: "The paper also refers to the Crown Estate’s narrow remit of maximising returns. Notwithstanding our previous comments about profitability, the Crown Estate has nevertheless been investing in the development of offshore renewables. For example, British Ports Association is a member of the Offshore Wind Developers Forum Supply Chain Group, a group organised by the Crown Estate, which is actively looking to control and reduce the cost of renewablegenerated electricity. It has set aside £300,000 for the project. It was announced in July that 50% of the revenues from the Crown Estate’s current activities would finance a new Coastal Communities Fund. We are not here to act as agents for the Crown Estate. These activities and other cooperative agreements serve to demonstrate that the Crown Estate do not always act in a traditional landlord way and do appear to see themselves as investors." I hope that answers the question a bit better.

Chair: Fine. Thanks very much.

Capt Bailey: That has not always been the case.

Chair: No, I think we understand that.

Q207 Jim McGovern: Chair, can I maybe make a brief suggestion? I am sorry for interrupting, but there is quite a lot to get through here. With your indulgence, maybe we should say to the witnesses that if you wish to read from preprepared statements that are in the public domain, it would save time if you just sent them to us rather than reading a full page.

Capt Bailey: Okay, understood.

Jim McGovern: If you agree, Chair?

Chair: Yes, fine, thanks.

Q208 Graeme Morrice: Good afternoon, gentlemen. I want to ask about your relationship with the Scottish Government and, in particular, how much contact and what kind of contact you have with Scottish Government officials.

Capt Bailey: One at a time or-

Chair: No, with yourselves at the moment and we will come on to the others later on.

Capt Bailey: It is a small department and I am pleased to say that I know most of them on a first-name basis. They are particularly conscious and interested in the success of the ports. I have a lot more to do with them than I do with the Westminster Government. If there is any threat of bad weather or disruption they seem to want to know what is going on. Generally speaking, I think it is very, very good. The one criticism I would have, and this must happen in all areas of devolved activity, is that sometimes I am answering London and Holyrood for the same question. It is not quite clear whom it lies with. I am sure you are very familiar with that.

Q209 Graeme Morrice: Thanks. Can I also ask, do you have any particular views on whether there might be any benefits, or indeed any disbenefits, in the Scottish Government managing the seabed permissions and charges rather than the Crown Estate?

Capt Bailey: Again, if I might just look at the conclusions that the British Ports came to. My colleagues here who represent other interests may well disagree, but the majority view of the British Ports in Scotland is that, "The ports have achieved a good and workmanlike commercial relationship with the Crown Estate in recent years. There is evidence that the Crown Estate, using national resources, is making investments in new businesses and specifically offshore renewables. Using lease agreements to raise money for specific projects could lead to price distortion. Prices, we believe, should be controlled by market demand. In conclusion, the British Ports Association are unconvinced that devolution of the Crown Estate will produce significant benefits and could, in fact, produce disbenefits."

Q210 Chair: I think we understand that. There is a discussion to be taken later on about the question of passing many of the responsibilities of the Crown Estate to local authorities. Do you have any observations on that?

Capt Bailey: Some local authorities may wish for that but the majority of commercial ports, we would not support any such transfer.

Q211 Chair: Why?

Capt Bailey: We believe that this would lead to even longer delays and bias from bodies who have no resource and are possibly politically motivated, and we would resist anything that could lead to just becoming another tax.

Q212 Chair: Can I just clarify the point? You mentioned bias there. Could you expand a little on that? What sort of bias would there be?

Capt Bailey: Well, I think the two would go in together. I think there would be concern that we are beginning to see the Crown Estate now putting some investment back into the benefit of ports and the ports industry and the future in terms of renewables. We are not so sure that that would happen with local authorities, and it may just become another taxraising power.

Q213 Chair: Yes, I understand, but your sole reservation, then, is that the local authorities, because they might be cash strapped, would not be able to put in the capital investment that the Crown Estate might and that they might see you as a means of raising money, rather than somewhere to spend money?

Capt Bailey: That is our overall concern, yes.

Q214 Mr Reid: At various times over the years there have been boats that have not been in use that have been moored in sea lochs, and I believe it is Clydeport that benefit from that. If you are charging boats for mooring in some of the sea lochs when they are tied up for long periods, do you have to pay the Crown Estate a fee for the use of that sea loch?

Capt Bailey: Could I just clarify, when you are talking about boats you are talking about commercial ships?

Mr Reid: Commercial ships, yes.

Capt Bailey: And particularly then you would be referring to Loch Striven, which was the ship we-

Mr Reid: Yes.

Capt Bailey: Loch Striven actually is very interesting. It is a sort of history of recessions. If you read about the ships that have been in Loch Striven, you go through the oil crisis from the 1970s, the various recessions that we have had. You will no doubt be aware that in 2008-09 we had six very large container ships there. There was an exchange of letters from Bidwells on behalf of the Crown to us. I think-I am pretty sure-I went back and said, "Well, these ships are here for six to nine months". We did not agree with Bidwells and it went no further. I really could not comment, without going back to the files, as to what happened in the 1970s or even the 1980s when they were there.

Q215 Mr Reid: Sorry, I am still not clear. Did you have to pay a fee to the Crown Estate for the use of the seabed while those containers were there?

Capt Bailey: No, we did not. Bidwells wrote a letter to us. They asked, "How long are they going to be there?" I don’t have the letter in front of me.

Chair: A simple "no" is sufficient.

Q216 Mr Reid: Did the Crown Estate have the power to charge but chose not to do so?

Capt Bailey: I think that is a matter of debate, to be quite honest. I don’t think that they have the power to charge and they certainly didn’t come to us and say, "Yes, we have".

Q217 Mr Reid: What you are saying is the legislation that set you up gives you the power to have container ships moored anywhere in the Clyde Basin?

Capt Bailey: I believe that it does. If we had these ships, bearing in mind where we are today, 2011, if those ships had been there two or three years, I suggest that Bidwells would have had more of an argument. As it was, I think they were there for less than a year.

Q218 Mr Reid: Is your contract for ever, or is there a certain timeframe for which your company is the port authority for the Clyde?

Capt Bailey: No, we are the port authority for the Clyde. The contract that we had with the container ships that were laid up, that was only for a few months and I think it went on a month-by-month basis. Nobody knew what was happening in 2008-09 when we were coming out of this.

Q219 Mr Reid: No, but I think the point I am trying to get across is, are you the port authority for the Clyde for ever or does the legislation set you up for a limited period of time?

Capt Bailey: No, it is not time limited. Clydeport as it is now is a combination of the River Clyde Navigation Trustees, the Clyde Lighthouse Board, and so on. That came about in the 1960s. That was set out under the Clydeport Confirmation Act in 1965. Clydeport is the body. It has had different names over the years, but it has basically been the same body, going through, with different names.

Q220 Chair: As I mentioned earlier on, you are a private sector organisation with some public responsibilities.

Capt Bailey: Going a little bit off, but the way I always put this is that the holding company is Peel Ports. If you owned a vessel and that vessel committed an offence in each one of Peel’s ports, and the port decided to prosecute, then you would be prosecuted under Clydeport legislation, Mersey Docks and Harbour Company legislation, Heysham legislation, and so on. There is no Peel Ports port authority legislation. Does that explain it?

Chair: Yes.

Q221 Lindsay Roy: Can I just clarify, are you really saying that you feel that local authorities would be a bit more punitive in their tax regime than the Crown Estate, and if so, what evidence do you have to substantiate that?

Capt Bailey: No, I don’t think I am saying that. In fact, I know I am not saying that. I am not saying they would be more punitive. It is a combination of things. The ports industry is beginning to see the Crown Estate put some investment back-give some direct payback into the ports industry. We are not sure that would happen with local authorities, and we are also concerned about the amount of time you are giving this-if this was to go to local authorities, it is just adding more and more layers on to them for what they already have. We feel that at the moment, the system seems to be working well. We are not against it. We are just saying we need to be convinced-that there has to be further benefits than we are seeing at the moment, if it was to be transferred.

Q222 Lindsay Roy: You would like more evidence?

Capt Bailey: We would like more evidence, please.

Chair: Fine. I wonder now if we could move on to the other witnesses.

Q223 Mr Reid: Good afternoon, Robert and Brian. Thanks very much for coming along. Perhaps you could both tell us how your associations are constituted.

Robert Clement: Yes; we are a little bit smaller than Clydeport and we have no commercial side whatsoever. The West Highland Anchorages and Moorings Association was set up subsequent to the proliferation of fish farms and suchlike appearing on the west coast of Scotland and taking up the better anchoring areas, such that the leisure industry was prevented in some cases from seeking refuge and finding a safe anchorage overnight. When it was first formed back in about the mid1980s, there were some disagreements with the Crown Estate at that time, but over the period it has now been realised that WHAM do know what they are talking about and the Crown Estate sometimes come to us with regard to the positioning of moorings on the west coast.

Q224 Mr Reid: Just to clarify how you are constituted-

Robert Clement: We are just an association.

Q225 Mr Reid: You are an association of moorings associations. How would those individual moorings associations be constituted?

Robert Clement: The individual moorings associations pay a subscription to WHAM but we are not-they are affiliated to WHAM but that is as far as it goes.

Q226 Mr Reid: Thank you. Brian of Tobermory?

Brian Swinbanks: Good afternoon, everybody. Tobermory Harbour Association was first formed in 1983 as a pressure group, as an association. We realised that we would have to take responsibility for leasing areas on the seabed for the laying of moorings. We knew that the seabed belonged to the nation and we were happy from the earliest outset, from 1985, to pay the Crown Estate. They were offering a discount for moorings. That discount was very advantageous. We also knew that if we took in and got the authority to lay and maintain, that authority would give us some power locally, and it did. I consider that many people, by continuing to fight and continuing to prevaricate, have missed an opportunity to devolve localism to their communities, to their harbours, through the system that was in place. We have used that quite a number of times. We have used that to achieve a car park-a huge car park for over 100 cars-bus parks and everything in Tobermory, in conjunction with Strathclyde. We forgave that right to lay and maintain to Strathclyde. They came in, in conjunction with us, and built a very large car park, boat park, bus park-facilities that drove forward community businesses and other businesses and private infrastructure within the town. That is partnership using the Crown Estate to an advantage, but maybe we had a committee that realised that could be done.

Q227 Mr Reid: Are you both non-profit-making organisations?

Brian Swinbanks: We are totally non-profit-making.

Robert Clement: Yes.

Brian Swinbanks: We have now moved forward to a company limited by guarantee with a board of 17, which ploughs all profits back into the community, for the community on behalf of the community.

Q228 Mr Reid: How do people become members of the association? Whom is it open to?

Brian Swinbanks: It is non-fee. You just come into the AGM or any other thing and say, "I want to be a member of the THA", you sign a form and you are a member of the Tobermory Harbour Association. It is open to anyone-associates from outside the Isle of Mull, direct members within the Isle of Mull.

Q229 Mr Reid: If somebody wanted to have a mooring-I think the question will be to both Robert and Brian, but maybe Brian first-in Tobermory Harbour, what do they have to do to go about that?

Brian Swinbanks: They would apply to us to get a mooring in Tobermory Harbour. Unfortunately, at present we have just over 100 moorings in the bay and a waiting list of just over 20. We are trying to rejuggle the grid. We go back to the question of unregulated moorings, and you both alluded to that before. When it was unregulated moorings and we wanted to reorganise the bay, we had to call upon the Crown Estate and PJ Korbel, their moorings officer, who came to Tobermory, read the riot act to the community who were refusing to move, and said, "If you don’t reorganise Tobermory Bay, everybody will have to apply individually". Nobody, of course, wanted to apply individually because they got the discount. We were doing all the work for them. We went in to form the mooring association. We reorganised the whole bay at that time, which included a new fairway, new moorings, a new cleared anchoring area, as specifically requested by the Crown Estate, to give some clear areas for other visitors when they came.

But this was all done on behalf of the community, the fishermen, the people who owned hotels and everything around Tobermory. This was not done for visiting yachts. In fact, our main opponents throughout this whole process were the RYA. Time and again they asked for a third of the bay. They asked for more and better facilities for visiting yachts. We opposed that regularly. We wanted to have our bay and our community working for the community by the community, and in this we were supported by the Crown Estate.

Q230 Mr Reid: Robert, in the other, smaller moorings associations, what do people have to do to get a mooring?

Robert Clement: More or less exactly the same. Each association covers a small area and anybody who wishes to put a mooring down in that area has to apply to the association to see if they can.

Q231 Mr Reid: I believe that Marine Scotland and Crown Estate consents are required. Do you do that for the individual?

Robert Clement: Yes, every mooring has to have what used to be called a section 34, which was a licence to place the mooring in a position that was proved not to be detrimental to navigation. Once that was obtained, they could then apply to the Crown Estate for a lease of the seabed in that area.

Q232 Mr Reid: How would you both describe your relationship with the Crown Estate?

Robert Clement: Satisfactory now. Initially there were some arguments between us, but I think we both realised that we have to work together and we are doing that very successfully.

Q233 Mr Reid: And Tobermory?

Brian Swinbanks: I have a couple of things to say. We have a very good relationship. As you know, it is a financial relationship. We manage the pontoons now for the Crown Estate. They have bought them off us and they have invested in Tobermory to the tune of over £300,000. We manage them on behalf of the Crown Estate. We have a very, I think, advantageous but commercial agreement with them to manage them and have a profit share. Where I have disagreed with the Crown Estate-and you asked for that really-is that they should not have gone to London. I feel that they should have had a Crown Estate in Scotland that was, like the Forestry Commission, a Scottish Crown Estate, a Scottish model.

Q234 Chair: That is presumably the argument-that you want to have them closer. One of the suggestions has been that the powers of the Crown Estate should simply be passed to the local authority, on the basis that they are even closer than the Crown Estate would be if it was based in Edinburgh. What do you think of that idea?

Brian Swinbanks: No, I think the model is Marine Scotland, I really do. I have read a lot of the work that has been put out, and the Crown Estate working as a management team with Marine Scotland in partnership could do this job exceptionally well.

Q235 Chair: What would be your unhappiness about working with the local authorities?

Brian Swinbanks: The local authorities for many, many years owned and managed the visitor moorings, they were gifted them by the HIDB, or they may have bought them commercially, I don’t know-eight moorings in Tobermory, six in Salen, some in Loch Aline, some at Loch Sunart. They lay, they were badly managed, not very well serviced, and they had no foresight to upgrade them. Within one year we had turned eight into 20. We had taken on an employee and we had turned something that they were just doing into a commercial operation. A parallel is Oban, where the Crown Estate were prepared to put money into Oban Bay Marina to make a new pontoon marina right in the centre of Oban and bring benefit to the town; the local authority refused to invest and match the money from the Crown Estate.

Robert Clement: My comments would be very similar. I live in the Oban area and I experienced that decision in Oban, and I think that was a great pity. From our experience in the area, I am afraid I would not like it to go to councils.

Q236 Chair: Can you just clarify why exactly that is?

Robert Clement: There is greater difficulty in trying to get them to do anything. In Oban it started off as everybody being for it, but in the end nothing came. This was over about four years.

Q237 Chair: You can understand why we have to ask these sorts of questions. We are being given various alternatives as to how the Crown Estate’s rights might be managed in future. I detect signs that your enthusiasm for local authority control is less than total, then?

Robert Clement: I would agree with that, yes, and it was not just in Oban. There was an instance elsewhere where the local authority dropped moorings in a completely unsuitable position and it took a long, long time for anything to be resolved about that.

Q238 Jim McGovern: The Committee has visited Orkney, Shetland, Caithness, Tiree, Barra and Stornoway as part of this inquiry. I concur with some of what you have said. Quite a lot of people we have met would rather that there was local control but not necessarily by the local authority. I think a lot of organisations would like to see it even more local than that-community trusts and so on being set up. I wonder if Robert and Brian have an opinion on that. Brian, given recent events, I wonder if you could just clarify that, when you said that your organisation read another organisation the riot act, you don’t mean literally.

Brian Swinbanks: No; what I meant was the Crown Estate had to read some people within the community the riot act to get-

Q239 Jim McGovern: You don’t mean literally the Riot Act?

Brian Swinbanks: No. He had to come in and say that we would remove the moorings-that is, the Crown Estate-if the people failed to follow our plan to reorganise the bay.

I think it is critically important, ladies and gentlemen-I think it is on your shoulders here-that this idea that the seabed is a sheet of paper covered in pound notes, and all conversations seem to lead back to pound notes, is utterly wrong going forward in the 21st century. The person that runs the seabed in the future must be given a duty of care over the seabed. The seabed is a living infrastructure. It is the earth that supports the column of water above it. It has crabs on it, it has shells on it, it has everything on it. It has oil below it. It has the detritus of eons that created gas and oil. Above that, you have the tides. You have the wind above that. You must impose a duty of care on this, and I do not see you are going to be able to do that with the local authorities. This has to be down to something like Marine Scotland. We need a duty of care on the seabed going forward. It is not just pounds.

Chair: That was very poetic.

Q240 Mr Reid: We have had your views on devolving to local authorities. What would your views be on situations where there was a constituted harbour association or a mooring association, and that association was itself given control of the seabed? Is that something you would support, or do you see any drawbacks to that?

Brian Swinbanks: I welcome it. We would take responsibility.

Robert Clement: To a certain extent we do at the present moment. The association has leased an area and we can put into that space as many or as few moorings as we wish, but no lease is exclusive. It does mean that anybody could come and apply to put a mooring within our leased area, and if it is deemed that there is space he will probably get permission.

Q241 Mr Reid: You said in evidence that you have worked well with the Crown Estate and they have helped you to put in new investments. If the Crown Estate were out of the picture and the harbour association was in complete control, do you foresee any problems getting access to capital for investment in new pontoons, say?

Robert Clement: I will have to leave that to Brian because we have nothing to do with the pontoons.

Brian Swinbanks: There is a history of us going to banks to try and get mortgages on pontoons or to use pontoons as collateral for our harbour building, which costs approximately £1 million and has toilets and offices for local businesses and starter businesses, and things like that. When we went to borrow money against the pontoons, we were told by banks no, but when we went to the Crown Estate and asked them to lend money or to buy the pontoons back off us so that we could reinvest in future facilities, they had no problem investing. If you want actual figures, I think the rate was 5.75%.

Q242 Mr Reid: The thing that is concerning me is that if the Crown Estate or Marine Scotland-if nobody else was in the picture and you had complete control of the seabed yourselves and you went to the bank, do you think you would be able to get the money at a reasonable rate of interest for investment?

Brian Swinbanks: No; there must be some vehicle set up to do that, yes.

Q243 Chair: When we were out and about up in Lewis particularly and we were meeting communityowned land sites and groups and so on, they were very keen to take control of some of the foreshore and the like. Does an arrangement whereby your organisations-which could be seen as mutuals, in a way-were given control, but within a framework of someone like the local authority, the Scottish Government or Marine Scotland having overarching responsibility, sound more suitable than the existing arrangements?

Brian Swinbanks: From Scotland’s point of view, yes. At the moment, the existing arrangements work very well from Tobermory’s point of view, I have to say that; but from Scotland’s point of view, yes. Marine partnerships in future are the way forward, definitely.

Robert Clement: Yes, I think they probably would be, but to a certain extent it would not affect the WHAM to a great extent because we are not even a regulatory body; we are just an advisory body, really.

Q244 Chair: Right. I was thinking in terms of the groups for whom you are speaking.

Robert Clement: Yes. In some cases it would be very helpful, I would think; in other cases possibly not so helpful, because very few have any land facilities.

Chair: Yes. I think we are just coming to the end of this session. Are there any other final points?

Q245 Graeme Morrice: Yes, Chair; perhaps I will direct this question to Brian. In your written evidence you mention a major project to develop new facilities at the harbour in the 1990s. The project involved reclaiming an area of seabed. Was this area of seabed bought or leased from the Crown Estate, and if the project was publicly funded, were other public funds used to pay any charges by the Crown Estate?

Brian Swinbanks: The land that we are talking about, which was a reclamation of the Ledaig area in Tobermory-a large area probably four or five times the size of this room-was reclaimed because there was rock available from a new project to build the new roads. But in reply to your question, as I said earlier, we passed on our lease for the seabed to Strathclyde, but the problem is that our right to lay and maintain was on the seabed in that area. The Crown Estate then wrote to us and asked, "I would be grateful if you could advise, Tobermory Harbour Association will agree to the blue area on the plan being removed from the current moorings agreement". We removed it from the moorings agreement. Strathclyde was then able to go ahead and infill that area with moneys raised also by the harbour association through the enterprise companies to create this massive car park, boat park, bus park, promenades, everything like that. That now resides in a joint ownership between the local authority-that is Argyll and Bute now-and it has been recognised that it is a community park designed by the Tobermory Harbour Association, such that I have to admit in this room they don’t impose parking charges. They can’t.

Q246 Graeme Morrice: Just finally, Chair, could I ask what, if any, future plans you have that could involve reclaiming further foreshore or seabed; and would these be likely to involve payments to the Crown Estate to buy or lease the areas?

Brian Swinbanks: Well, the rental for the land on the Crown Estate land at Ledaig was £1,596 when it was built in 1996. It has gone up a small amount since then. It may be-and I don’t know because that was a private arrangement between them and Argyll and Bute at that time-about £2,000 for the rental of the whole seabed for this massive car park, bus park and so on.

Q247 Chair: Any final points that you want to add- very, very briefly?

Brian Swinbanks: This is a very confidential document. You asked for documents not in the public domain, and this is our agreement with the Crown Estate. It says here, "Objectives means the following objectives, namely the provision of berthing facilities in Tobermory Bay at a reasonable cost but not purely for maximum profit". It goes on to say, "In the further interests of the community of Tobermory, with objects from time to time that would include berthing facilities". They are giving us the right to impose charges and things like that, and we may give discounts and benefit to local people. What they are not saying in our lease agreement is that you must maximise profits all the time.

Q248 Chair: No, I think we understand that. Sorry, Mr Bailey.

Capt Bailey: Could I just make one point? We touched upon Marine Scotland and their consents now replacing the old section 34 of the Coastal Protection Act. The change that has happened there is that no Marine Scotland consent is needed if it is within a statutory harbour area. On the Clyde, the way that we do this is this. I chair the Clyde Moorings Committee, which has just celebrated its 30th anniversary. It was ahead of its time because it is actually a sort of marine forum. The representatives are the Clyde Fishermen’s Association, the Royal Yachting Association, Clyde Yacht Club, ourselves, the MOD, and so on. They consider all the moorings and regulate moorings as a group, for the benefit of the whole of the Clyde area.

Chair: Thank you very much, gentlemen. That has been very helpful and we will obviously be producing our report in due course. Thank you.

Examination of Witnesses

Witnesses: John Watt, Highlands and Islands Enterprise, Cllr Michael Foxley, Highland Council, Cllr Angus Campbell, Comhairle nan Eilean Siar, Cllr James Foubister, Orkney Islands Council, Cllr Sandy Cluness, Shetland Islands Council, and Cllr Dick Walsh, Argyll and Bute Council, gave evidence.

Q249 Chair: Gentlemen, thank you very much for coming to see us today. You are aware of the background. We have been having an investigation into the Crown Estate for a little while. We have been meandering around Scotland. We have been up in Orkney, Shetland and Caithness and elsewhere, the Western Isles-I have forgotten all the places we went to, actually.

Graeme Morrice: Tiree.

Chair: Tiree, thank you. Tiree as well. We are interested in the proposals that you put forward about the extent to which responsibilities should be shifted from the Crown Estate directly to yourselves. Could we start off by asking you about the Crown Estate Review Working Group Report that you produced? What response have you had from the Scottish Government on that, and is there an agreement at all between them and you about the way forward on these areas? With six council leaders I am not quite sure what the collective term is. I am not quite sure who gets to speak first. It is probably safer for me just to point in that general direction and you sort it out yourselves.

Cllr Foxley: Thank you very much for inviting us again to give evidence. It is good to see you here in Glasgow. In the sense that we have been advocating the devolution of the management not just to Scotland but further down to local authorities and even further down to local communityowned harbours and communityowned land, we are in agreement with the Scottish Government on the first part. They have been silent on the second part, the secondary devolution. As recently as last Monday we were all in Boat of Garten in the Highlands at the Convention of Highlands and Islands, which was chaired by John Swinney. It was an issue raised by both Angus Campbell and myself at that meeting, but they have been silent so far on that secondary devolution down to the local level.

Q250 Chair: I am not betraying any secrets if I indicate that I think most of us have been persuaded of the very strong argument for secondary devolution, decentralisation further and so on. I am a bit surprised, though, to hear that there has been no discussion between the Scottish Government and yourselves about taking this matter further. Surely there must have been something. Surely there has been some dialogue at some stage. When you produced your initial report, surely there was some sort of feedback to you from the Scottish Government about what they thought of it.

Cllr Campbell: I think the only feedback I certainly can think of, and I speak for my own authority, is one meeting we had with Richard Lochhead in Inverness when we talked round the subject. We have had nothing back in terms-I think we as local authorities have made our view known to the Scottish Government in terms of the secondary devolution of power for the seabed, but there has been very little conversation at all that I am aware of from my local authority area.

Q251 Chair: Is that the view of all of you?

Cllr Cluness: Yes. I think the Scottish Government has made its position fairly clear, in that it wants to take over, if you like, the control-

Chair: Sorry, you will have to speak up a little bit.

Cllr Cluness: I think the Scottish Government has made its position fairly clear. It says that it believes that the powers in this respect should devolve to the Scottish people.

Q252 Chair: Sorry, it is the operational issue-how that actually happens. I think that the view we have heard from many people is they want to see some power staying in Edinburgh and then other powers going beyond that, down closer to the Scottish people. I remember when we were in Scrabster, I think, people there said that they did not want powers going to Edinburgh, they did not even want powers going to Inverness and they certainly were not happy about the idea of Wick or Thurso. They wanted things to go to Scrabster if possible. We are not necessarily going to be able to resolve all that here today, but the thrust, as I understand it, of your argument is that you want decentralisation beyond just simply Edinburgh. I am quite surprised that either you have not pursued this or you have not had anything back at all. I am just trying to seek clarification. Surely there must be dialogue through COSLA or some other bodies about what was, I think, a major report that you produced.

Cllr Walsh: Could I just come in, Chair? We have not, in all honesty, had that kind of detailed discussion on how the operation would roll out. Personally speaking, I felt it was anachronistic in a post-devolution Scotland for the Scottish Parliament not to have some form of authority over the Crown Estate, given the huge agenda that we all face here in terms of renewables and the potential income that is likely to come to Scotland, not least the jobs. We have not had that kind of dialogue. In fact, I think it was only in July that the Scottish Parliament themselves agreed an allparty motion to devolve more of the Crown Estate powers to the Scottish Parliament. We have, through the Highlands and Islands, had our dialogues as to how we would do that, but we have not gone into the nuts and bolts and the detail, to be fair.

Cllr Foxley: In the last three months I have spoken to the First Minister; Richard Lochhead, Cabinet Secretary; and John Swinney, Cabinet Secretary about the need for that secondary devolution, without any satisfactory response or, indeed, much of a dialogue. The conversation has just stopped. The other thing is that several of us gave evidence to the Scottish Committee on the Scotland Bill in the Scottish Parliament about a month ago, and certainly the members there were very, I suppose the word would be, empathetic towards that secondary devolution, because we see that as essential. I would like to come back to Scrabster at one point because that sums up what this is all about.

Q253 Graeme Morrice: Can I just pick up on that point about consultation and discussion. In particular, COSLA was mentioned and Michael latterly mentioned discourse between individual local authorities and the powers that be at Edinburgh. Could I just ask-and Dick kind of alluded to it-just to clarify, has there been discussion internally within COSLA to at least get a line on this, or is that something that still needs to happen? Does a line need to be determined so that there can be a united voice within Scottish local government on this issue, as it continues to have discussions with the Scottish Government and other agencies?

Cllr Walsh: From my recollection, we have had no specific discussions on that in COSLA. There have been no papers produced. There have been a number of papers produced in terms of planning that have skated round about it, but nothing in relation to the operational nature of the Crown Estate if it was devolved to Scotland. We have not had that dialogue yet.

Q254 Lindsay Roy: That seems quite surprising to me given that there seems to be a collective commitment within local authorities to have some of these powers.

Cllr Walsh: Absolutely, yes. I think we are fairly clear and definite in what we want and, as I say, we had the decision in July. In fact, I remember attending a video conference call where we were talking about some form of memorandum of understanding and we were advised by the Scottish Government to hold fire on the memorandum of understanding because the Scottish Government and the UK Government were talking about this, but nothing beyond that. A bit of time passed on that when, as I said, the Scottish Parliament took the decision that they did in July this year. We have not, as I understand it, yet developed the operational roll-out of that if it were to happen. In fact, your input into this is the first time that I personally have had an involvement in this important business.

Cllr Cluness: Whatever legislation comes about, it probably is more relevant to the Highlands and Islands than some other areas of Scotland, which is why some local authorities are perhaps not quite so interested in the subject as we are.

Cllr Foxley: Can I briefly reinforce what Sandy has just said? In the Highlands and Islands we have been campaigning. Both Orkney and Shetland took legal action over the status of the Crown Estate for about 30 years because it did affect our harbours, moorings and fish farming over that period, but it has not affected much of Scotland outwith the Highlands and Islands. I think, to be honest, it is only recently-I am not saying the seabed is covered in pound notes or whatever the phrase was earlier on, but it is the potential for offshore marine renewables that has captured the attention of the rest of Scotland. But we have seen this as an issue, whether it is the location issue of a fish farm, local control of moorings or development of a harbour, and that is why we have campaigned for long enough; but it has been a voice from the Highlands and Islands that has been making that case.

Chair: Can I just say I think that is entirely fair. We really only picked this up when we were invited to look at Calman and we saw that quite a number of people had written in about Calman saying that this is something that had been omitted. I think that certainly moved it up our agenda and I think that the extent to which reviewing devolution is an ongoing process certainly has worked in this particular case. I wonder if, rather than just continuing with that, Alan, I could maybe turn to you to pick up the issues relating to harbours.

Q255 Mr Reid: Yes. A lot of the harbours in the Highlands and Islands are obviously under council control-the council for harbour authority-but clearly the Crown Estate also has a role. I wonder perhaps if you could tell us what the relationship with the Crown Estate has been regarding the ports and harbours.

Cllr Campbell: Well, I would say, quite frankly, from our local authority point of view there is no relationship and it is as blunt as that. All we have done in the Western Isles in terms of development of any harbour has been done at the hands of the local authority, and what you quite simply get at the end of the day is a bill for the extra rental. That is the sumup of the relationship we have with the Crown Estate. I think you have to remember very clearly that without the input of the local authorities, particularly in the island areas, the new harbours that I have seen happening in the Outer Hebrides in the last three, four, five, six years would not have happened. Regarding the Crown Estate, the only knowledge I have is of the Storas Uibhist, which is one of the community land buy-outs where we are trying to get an £11 million redevelopment of the harbour there. They offered to lend at a rate of 6%-slightly more than the gentleman in the last session said-where we could access that money a lot cheaper. That is the only input in 13 years of local government I have seen from the Crown Estate, apart from the bills coming through the door.

Q256 Mr Reid: Is that the general view of all the councils?

Chair: Sorry-it is quite difficult again. James caught my eye first. I know that council leaders are not used to having to speak in order, but I will try.

Cllr Foubister: If I could add and corroborate largely what Angus has said because here within Orkney I am sure the Committee is well aware of the development of marine renewables, which is now beginning to happen. Part of our policy within Orkney is to develop a three port strategy at strategic locations to service this huge, growing industry. The only investment-of which there has been none-the only contact, essentially, as Angus has just said, that we have had with the Crown Estate is a bill for development facilities. But perhaps more importantly for us-and I don’t know if the members have seen the designated areas in and around Orkney, which are extremely extensive-there is a major issue there in terms of communication, or rather lack of communication.

We have a very strong inshore fishing industry, and there are some 7,000 ship movements annually through the Pentland Firth, where one or two of these locations are. There was absolutely no consultation whatsoever with the local authority, the inshore fishing industry or any local interests at all; and while we welcome and encourage the development of renewables, there was no consultation whatsoever.

Q257 Lindsay Roy: James, that is very interesting because that confirms exactly the evidence we had from people on the ground when we were in Orkney, and they were most dissatisfied with the whole arrangement.

Cllr Foubister: Yes, a lot of enthusiasm for the development but absolutely no consultation whatsoever.

Lindsay Roy: They felt disfranchised.

Cllr Foubister: Yes.

Cllr Cluness: I was going to say we always used to pay the Crown Estate revenues under protest. We, of course, have had a long experience of the Crown Estate Commission, although it tended to be simply a question of them sending us the bills. We have run, as you know, the Port of Sullom Voe as a local authority for more than 30 years. In that time we have paid a great deal one way and another to external bodies like the Crown Estate Commission without seeing any return for it. We did have a visit from a representative of the Crown Estate some years ago, whose name I forget. At that time he was suggesting that should there be some kind of joint venture, and they would be happy to look into that. I have to say that probably we have not taken them up on it.

I can also say from the point of view of Lerwick Point Authority, which is the only harbour not controlled by the local authority, they have recently purchased a piece of seabed from the Crown Estate Commission to enable them to develop their decommissioning. As far as I am aware-I am not a member of the port authority-I think they would say on that occasion, at least, agreement has been reached.

Our only basis for complaint against the Crown Estate is that, in essence, they derive considerable incomes not only from anything we do within the oil industry and the considerable developments that come there-of course in addition to renewables-but also in relation to salmon farming. We have not yet seen any return of any size from the Crown Estate in relation to the fees that we have paid them.

Q258 Mr Reid: This is a question for Dick. You were here in the earlier session, when they were giving evidence that the Crown Estate had been willing to invest in Oban but the council had not. What is your response to that?

Cllr Walsh: Can I preface my answer, because there is an important issue here that relates to connectivity and the importance of infrastructure in supporting that connectivity? I am talking about, in our case, ferries. The councils commit a significant capital resource in order to create those facilities, but they don’t own the land that they sit on and there is an issue about the periods of the leases that we are able to negotiate with them, the period of borrowing, and so on. So it is all about satisfying the business cases that you produce in order to satisfy that level of investment.

Specifically related to the Oban initiative, as you know Argyll and Bute have a significant CHORD project proposing £30 million of investment in the main waterfront areas of the town, and Oban is part of that. We had committed £900,000 towards a marina proposal in the Oban area. The difficulty for the Council was that, following independent advice to scrutinise the business plan, it did not stack up. It is not the case that you can plant moorings anywhere; not every type of mooring arrangement is brought on in terms of business. The clear advice from independent advisors was that it was not a good, sound business case, so we could not continue to invest in the £900,000. We are, however, promoting a significant investment and have submitted a bid for the tax incentivisation fund to support that in that particular area.

Cllr Foxley: Can I just briefly cover harbours from the Highland perspective? On many occasions over the past few years the Crown Estate have repeatedly said the only funding they would put in to any development would be £5,000 to £10,000, unless it was an investment and they expected a substantial return from the funds they contributed. That is the general point.

On the specifics, I was a member of Mallaig Harbour Authority for 21 years. We carried out three major developments in the harbour in that time. We did not receive any funding from the Crown Estate. What we did receive was protracted and bureaucratic negotiations and legal exchanges in order to acquire the seabed to carry out that development.

The other example I want to give was Scrabster, with a £20 million-plus development under way. They again ran into the same minefield of legal and bureaucratic delays from the Crown Estate. As a council, we were prepared to guarantee a loan in principle of £6 million towards that development, and in the event they managed to, remarkably, raise that money from the bank, which helped the funding package in terms of other sources of funding. But we as a council were heavily involved with the Mallaig development, we were promoting the development at Kishorn and so on. We were prepared to put in energy and money into these developments; the Crown Estate aren’t.

Q259 Chair: Can I just pick up one point relating to this? When we were in Lewis we met the Stornoway Port Trust and I think their enthusiasm for being linked to the local authority was again less than total, and all the things that you are accusing the Crown Estate of they were accusing the local authority of in terms of being bureaucratic, slow and so on. You will have heard the witnesses earlier on, and being embraced by local authorities is not necessarily universally welcome. How do you respond to these sorts of points? I think all of us understand the general democratic point about decentralisation, but if the response of ordinary people is that the local authority is so hidebound by rules and systems that it is worse than it was before, then you can see that there is a natural difficulty about arguing for that case.

Cllr Campbell: Can I maybe take that one? You raised a specific there. I met the Stornoway Port Authority on Friday afternoon in the knowledge I was coming here. To say we are slow and difficult to deal with-I would contend it is the other way round, and I was on the Stornoway Port Authority as well. Each development that has happened in the last few years has resulted in the local council putting money in to make it happen. At the moment we have a community planning bid in for the whole redevelopment of the inner harbour, which is dependent on the local authority coming across with the money to make that happen.

The statement that came out of the Stornoway Port Authority was based on no knowledge of our position, because our position is that everything that has gone in the trust port area should return to them, not to the local authority. We are not looking to take control over ports that we don’t now have control of. What we would say is someone at the Stornoway Port Authority could use the money they are presently paying in rent to the Crown Estate to improve the facilities that are badly needed and improve that port.

The same would be true of the port that is the only trust port in the whole of the Outer Hebrides. We would look at that money, instead of going down the road to London, being used to reinvest in the infrastructure of these ports. So it is not a matter of local authority take-over. That, I think, was said in a lack of understanding of where we were coming from.

Cllr Foubister: If I can go back to what we discussed earlier there, whereby leased areas were designated without any local consultation. By a similar quirk of fate the Crown Estate then decided that we are not going to allow any more within this particular area, and that gave a huge disadvantage to ourselves as the port operators, because we are building up infrastructure to support an industry. Then the Crown Estate came back and said, "Well, sorry, guys, we are not going to allow any more development here" when there are still vast resources. Thankfully we have had further negotiations with them and they have tended to relax that to a degree, but not the current position that we are in. This is where I totally agree with Shetland, Sandy, inasmuch as my understanding of Scottish law is that, if you own the title, effectively you own anything and everything that is on that piece of land-or, in this case, the seabed. I would ask the Crown Estate to come forward with the titles for the seabed in Orkney and Shetland.

Chair: Tomorrow.

Q260 Jim McGovern: Could I first of all thank James for raising what I would regard as the plight of the various fishermen’s associations. Like Lindsay, I would say that of all the associations that we met, and there were numerous local authorities, community trusts, and so on, the fishermen probably felt most that they had been ignored in any consultation process-that no one had spoken to them. Announcements were made and heralded in the press and the media, and they only knew about them when they heard it on the radio or read it in the paper or whatever, so I am grateful to James for that.

Again, Angus referred to Stornoway Port Authority and said that, far from what the Chair said about them being not totally enthusiastic about the local authority running it, you thought maybe it was the other way about-the local authority were less than enthusiastic about them running it. There is only going to be so much of a cake, if it is decentralised at all. Obviously the Scottish Government in Edinburgh feel it should go there. The various local authorities that we have met feel that somehow or other they should be in control of it. There is a safe community trust that feel they should somehow be involved-fishermen’s associations, Uncle Tom Cobley and all. How are we going to get together? Our report will contain some recommendations. Nobody is obliged to follow them, but they will be read and they will be commented upon. How do I reach some sort of consensus as to how this cake should be divided?

Cllr Campbell: First of all, I think what I was saying-not answering that question-was that we were accused of being slow and bureaucratic. My experience of working with the Stornoway Port Authority is that the boot should be on the other foot, but that is not the question.

Jim McGovern: Beg your pardon if I misunderstood you.

Cllr Campbell: That is not the question you are really asking.

Jim McGovern: We recorded all this.

Cllr Campbell: We have a very clear idea as a local authority how that could work and we believe that there are different layers of benefit there. Like I said, we would not want to get involved in what was within the area of a port. Let them get on with-if they received back what they are at present paying in rent and if any developments took place, we would expect them to be the ones that took control of that situation. But remember, we are talking about the whole of the coast in the Outer Hebrides; it is huge. Something like Stornoway Port Authority-it is a minute piece of seabed compared to what we are talking about here.

We see Marine Scotland as probably having a play in terms of the legislation of the sea and looking after the planning aspect. We see at the higher level there being a very strategic cue for the UK Government to take on things like interconnection of renewable energy, and there must be an acknowledgement of that because that is the level it sits at. We could see a three-layered system of working that benefit down that could go to the National Government at Westminster, to the Scottish Government and through to Marine Scotland; but ultimately local communities and the local authority should have a slice of that that they can use for what comes on.

You can draw these lines for renewables, for instance, at the number of megawatts that are involved in a transaction. In something like connection of electricity to the mainland you obviously have to have a national input of the money that goes in to provide that strategy. But within 12 miles, for instance, that could relate back to the local authority, and that is why I would see a three-tiered answer to this: where it is not going to the Crown Estate, but it is coming to direct economic benefit on joint criteria that we have both as a local area and nationally.

Q261 Jim McGovern: I meant to put a point in my question which I did not quite get in. In Angus’ two most recent contributions, I am conscious he referred to "we". Is that "we" at this table, or "we" Highlands and Islands? Who is "we"?

Cllr Campbell: I think the case is common for the communities right across the Highlands and Islands, and I would think that we all have the same interests and we all have the same issues to deal with. So when I say "we" I probably speak-I hope; unless anybody is going to bang me on the head-for the Highlands and Islands.

Cllr Walsh: Could I come in and deal with the specifics of your question in relation to the renewable energy revolution? The question about the identification of sites in the first place in offshore is something that local authorities and others have been divorced from; there is a question about the authority. You have the Crown Estate that deal with the exclusivity rights, and Marine Scotland deal with the development, so there is a need for some clarity around that. On the process around exclusivity of rights, a number of people in the communities believe that when the Crown Estate grant an exclusivity right, they are granting a licence when clearly that is not the case. There was a degree of fog regarding Tiree, where I know the fishermen are pretty irate. The problem with this whole process has been that nobody can add clarity to it. There is still an area of development that is unknown. Development companies have been promoting schemes and have been pressurised into providing photomontage information; but in reality, that will in no way look like the sites that are to be developed.

So there is an issue about the multiplicity of bodies and what they do, and a lack of clarity about that. We, the local authorities, in my view, are tending to be dragged into those aspects when we don’t have the authority for those areas. In Argyll and Bute we have set up the Argyll and Bute Renewables Alliance, which I think is a fairly positive initiative that is bringing all the key players around the table and now, fortunately, includes the Crown Estate. Hopefully we can start developing that kind of clarity in a way that the communities will understand, and it will also involve them. In the Island communities-and I know the one in Tiree, which you experienced-there are indigenous communities that are all for it, while others in the community have no desire to have it. But there is a lot of fog: nobody is clear on any aspect of it.

Q262 Chair: Before we go into some detailed questions, it seems to me that one of the points that you made, Angus, about yourselves having met the harbour trust and them not having realised what it was you were essentially proposing, was that they were not aware that under your grand scheme of things for the Crown Estate, they would retain their control over it. It would be immensely helpful to us, I think, if we had a much clearer view of what exactly it was that you wanted to see going forward.

I used to be in a local authority and I know some of my colleagues have close links with local authorities. If you were giving us something that we can then consider as the basis of recommendations, which would spell things out, what exactly would be the relationship between mutually owned port authorities and yourselves? How would you relate to other community land buy-outs and so on? There is a lot of apprehension about all of that, and about your hierarchy, which we discussed when we were in Stornoway. I was not clear whether or not that was, as it were, you and I agreeing about the way forward-whether or not you were necessarily speaking on behalf of the other local authorities. I think it would be quite helpful if we had something concrete coming forward that we can either accept wholesale, or come back to you and say, "Look, on the basis of our evidence, what about some minor adjustments?" and so on, and see whether or not we can then have an agreed position. If your position ends up completely at variance with ours, and we then have the community land people and harbour people all arguing in different directions, that "divide and rule" situation is a recipe for nothing very heartening at all.

I think we are quite keen to roll this forward so that when we report there is going to be a momentum behind it-where something will happen rather than just being shelved. I am conscious of that, to some extent, passing some of the onus back on to yourselves. You are closer and you have more staff than we have for this sort of investigation and you will have closer links with the community land groups and so on. I hope you will take that in the spirit in which it is intended-about wanting to move things forward.

If we can now move on to some of the other questions. Graeme, you wanted to come in.

Cllr Foxley: Can I just reply, Chairman, and say on behalf of my colleagues, we would be extremely happy to do that. We will come back with an absolutely explicit, very simple statement about that, as it were, tertiary devolution of harbours, community-owned land and trusts. We will organise that very quickly.

Chair: So if we have that for next Monday.

Cllr Foxley: We will do that for next Monday.

Q263 Graeme Morrice: I think that direction from yourself, Chair, is certainly useful. I would like to touch on the general issue of where we are with this and where we are going, and obviously there are different points of view based on what we heard earlier from the first round of witnesses. I think in what you have said in terms of your own experiences, and giving the tangible examples of what you do in your own local authority areas, to an extent you have dispelled that and obviously given examples of where other agencies perhaps have dragged their feet when you have wanted to go forward, and we all understand the restrictions in relation to finance.

We all believe in subsidiarity and, of course, we need to see a kind of strategic framework in which we operate that could be implemented at both the national and regional level. It is not about having everything locally carried out by a local authority; it is about yourselves working in partnership. I think it is about the framework in which local authorities have to operate, what is specified; and, secondly, working in partnership with the community planning process.

What are you doing on utilising the community planning process within your local authority areas, and how do you think more effectively you could utilise that by working with various agencies? You have the Highlands and Islands Enterprise here; we have mentioned Marine Scotland, the Crown Estate and the ports and harbours authorities and associations. Rather than having all these issues, problems and difficulties and barriers to change, you can all get beyond that and work together to make a difference at the most localised level possible. How do we do that?

Cllr Cluness: I can only speak from the point of view of Shetland and of course, a bit like Orkney, we are slightly different in that we have a special Act of Parliament, in our case the ZCC Act 1974, which allows us to operate around Shetland, other than Lerwick. Although we don’t always agree with Lerwick Port Authority, I don’t think we have any difficulty in relation to what happens with the Crown Estate Commission. But that Act allows us, to a certain extent, to control any development up to the 12-mile limit, which means that anyone wishing to get a works licence still has to come through our local authority. What we have done with the funds we obtained from our operation at the port is to invest it in the local economy and at this time that runs at about £500 million.

What interested me, and what I saw in the Scotland Government papers, was the proposal for the creation of a fund for future generations, which is very much what we have created in Shetland. Having spent this £500 million on infrastructure, we still have a similar sum that we can invest for the future. I would go along with the Scottish Government, to the extent that, clearly, because most of the renewable development is going to be based in, if you like, Scottish waters, in theory it would be reasonable for a certain relevant section of income from the Crown Estate Commission to go to Scotland as a whole-always provided that, as you say, there was some secondary system whereby the areas that are directly related to these developments achieve a fair degree of income as well.

I cannot see from our past experience of the Crown Estate Commission at the moment any indication that the Highlands and Islands, which will bear the main brunt, if you like, of development in renewables, will benefit in any way to their communities. I am not prepared to enter into this discussion, to some extent, about the difference in communities. Every local authority has its difficulties in many ways with local groups and so on. As I say, I am not aware of any specific case of the Crown Estate Commission having any difficulty with the Lerwick Port Authority, which is extremely successful in its own right and good luck to it.

I would not like this meeting to end without thinking in terms of whether or not Scotland, as a country, should gain from the revenues that are going to come as a result of this. I say that as an independent individual, not a member of any political party. So I think what we have achieved in Shetland could be achieved for Scotland as a whole, but I would doubt whether that was possible if control of the Scottish interest in the Crown Estate remains in London.

Q264 Chair: I think to be fair we have moved a bit on from that, and I think in our visits we can say that the roads in Shetland we were immensely impressed by. The only place I think that had better roads was Barra, if I remember correctly, which is the constituency of the roads convenor, which I presume is just a coincidence.

I wonder if I could just turn to the question of the foreshore because we have a number of issues to go through. You have most of the foreshore. It would be helpful if you just gave us, for the record, an indication of why you think the local authority in particular should have control of the foreshore. The same applies to our colleagues from Orkney and Shetland, in terms of udal rules-how exactly those would apply, for the record, here as well for the foreshore. Perhaps we can deal with non-Orkney and Shetland first. Why should you get the foreshore? Could somebody spell that out for us?

Cllr Campbell: I think to begin with, from a strategic point of view for planning for any sort of development in our islands, it is crucially important that you identify one body who has the foreshore, and I would argue that if one thing you do from this Committee is that you get us the same rates as Orkney and Shetland, then we would benefit greatly from that.

But seriously, I think you have to stop and look at how the system works at the moment. I think this is something you alluded to when you talked about the way it would work within the local community and community planning in particular. We in renewables, on land, for instance, have put together something called the Western Isles Development Trust, which has centres right across the islands, which is not just a local authority but brings all these centres to bear. We have a very effective community planning partnership, which includes everything from youth representation to community land owners’ representation, as well as statutory bodies. You will, if you go to every small community, have them putting forward what they see as what is right in front of their door, quite correctly, but somebody within an area like the Outer Hebrides has to have some strategic plan of how you can go ahead and develop the economy of the Outer Hebrides. What I would argue is that whether the local authority deliver it directly through their own organisation, or through an organisation similar to the Western Isles Development Trust, that is where it should sit at the level of bringing forward what is best for the Outer Hebrides.

Cllr Foxley: Coming from the Highland perspective, it is just so that there is one body dealing with the development on the land and on the foreshore, to take an overview as to what happens without having other consents and leases being granted about which we know nothing. To respond to Mr Morrice’s comments about Highlands and Islands, certainly from Shetland’s point of view, there are very local issues but strategically across the Highlands and Islands we have agreed that the strategic issues need to be dealt with by some form of joint body between the local authorities, HIE and appropriate members like Marine Scotland once they become a bit more active. Secondly, that also applies to the proposed Coastal Community Fund-that that should be managed across the local authorities. We meet regularly, about once a month, through one venue and another, and we have made progress on those two aspects and we can progress others.

Q265 Chair: Mr Watt, you have not said anything that anybody has disagreed with so far, so let us-

John Watt: I have not said anything at all, Chairman.

Chair: Indeed.

John Watt: Just a minor correction, flattered though I am: I am not a local authority leader. I do not work for a local authority. I work for Highlands and Islands Enterprise, I work in partnership with all of the gentlemen at the table here and I have been letting them answer very direct questions related to local authorities because I think that is only correct.

Let me say just a couple of reinforcing things, from an agency that has a region-wide responsibility and a more strategic responsibility. I think the main principle of our position is that the marine asset is one that we have to capitalise on as best we possibly can in the Highlands and Islands for reinvestment into the Highlands and Islands for broad community benefit, and the potential loss of revenue from that asset has been a problem over the years. We are already seeing, at a time of difficulty in public funding, some very creative collaborations beginning to happen on investments in the Highlands and Islands between local authorities and ourselves and others.

It was interesting to hear the evidence from Tobermory, where you have an independent harbours association which, of course, has access to all sorts of other sources of funding. In that particular impressive investment, we and the Lottery had quite significant input, as well as other bodies.

My colleague from Comhairle nan Eilean also mentioned Lochboisdale, where we have several partners trying to develop a major port in the southern isles, and in Scrabster and other places. So I think your challenge for us to come back with a very clear statement of how double devolution, and in fact triple devolution, might work is one we would take very seriously. I think there is enough evidence now of collaboration at the regional level of alliances that already distribute other funding, European funding and the like, which can be targeted for the general benefit of all the communities in the Highlands and Islands.

Q266 Mr Reid: Mr Watt, we heard evidence earlier from Tobermory Harbour Association. They were very keen to be able to take over control of the seabed for themselves but there was the concern about access to capital-that the Crown Estate had been able to negotiate a loan for them from the bank at a reasonable rate of interest, but Brian Swinbanks said there would need to be some other umbrella. Would Highlands and Islands Enterprise be able to step into the breach there and negotiate loans at a reasonable rate for access to capital if the Crown Estate were no longer there and the harbour association owned the seabed?

John Watt: We can consider lending ourselves, but inevitably we are constrained by State aid issues in terms of our investments into property.

Q267 Mr Reid: But surely the Crown Estate has the same restrictions. It is a public body so it must have the same State aid rules.

John Watt: Yes. For two reasons I think that is why they charge commercial rates for lending. One is that they have to comply with State aid and, secondly, they have to maximise the return for the Treasury on their investments.

Negotiating with banks at the moment is extremely challenging and we are seeing that all over Highlands and Islands, and not just in port facilities but in businesses everywhere. It is a significant challenge.

In terms of, if you like, third sector organisations or community-based organisations like Tobermory and some of the harbour trusts that we have talked about, they do have the privilege of access to other types of lending through social banks. Already we have experience of the Co-op Bank, Triodos Bank, and the like, who are now making investments in this property-based infrastructure, sometimes more generously or more easily than the hard commercial banks, if you like. That is what I was trying to illustrate, that there are more creative collaborations possible now for some of these investments than there were in the past; but all the better if some of the revenue being generated is retained and recirculated locally.

Cllr Foubister: Just to go back to the question of the Crown Estate again and the lease of the seabed. Sandy is the lawyer here, not me, but my experience of udal law is that the Crown Estate will accept an individual’s title to the foreshore, provided that that is recorded within the title. But in terms of diversification of funds and how it could be administered, we need to look no further than the rural transport partnerships in the days when they had capital funding. For Shetland there is a separate entity within Hightrans. There are some five different councils where as a group, we looked at allocating capital funding for major projects working within the area, and I think perhaps that is a model that could be developed for disbursement of funds here. I think the point is that there is experience within the Highlands and Islands area for doing this.

Q268 Chair: I hope you are not going to tell us all about the legal basis of udal law, because we have heard this several times and we lost the will to live on several occasions while we were having it explained to us.

Cllr Cluness: I will do it in two minutes then. There are the cases of Balfour and Bruce, if you want to look them up. They are from the 19th century, but essentially it was that the King of Scotland could not have inherited such rights from Norway because the Norwegians did not operate on that basis and still do not. If you look at these old Orkney and Shetland titles, they say that the land is owned to the lowest stone in the ebb, but of course in Shetland some estates are now owned by the local authority because the owners have been glad to get rid of them. It is a minimal and, to me, marginal point.

Chair: Thanks very much. Lindsay, you were going to ask about your point 6 in the marine renewable energy.

Q269 Lindsay Roy: I think first of all, John, I want to ask you about Highlands and Islands Enterprise and your strategic engagement and interaction with the Crown Estate and local government and what the advantages and disadvantages are of the development role that the Crown Estate Commission are playing in this sector. Are you an intermediary, are you a catalyst? What is your role with the Crown Estate and local authorities?

John Watt: Our main relationship with the Crown Estate in recent times has been around the potential development of offshore renewables and in that respect, although it is not my direct responsibility, we have had varying degrees of relationship with them, and some have been reasonably positive. They have teams of professionals that are able to advise on offshore developments. At other times we are perhaps not getting as much information as we would have liked in hearing about potential developments.

Q270 Lindsay Roy: Have you been consulted by the Crown Estate Commissioners about potential licences and potential locations?

John Watt: We get some degree of consultation but I still think we feel at times we are not maybe getting as much as we would like.

Q271 Lindsay Roy: Have you raised that with them?

John Watt: Yes.

Q272 Lindsay Roy: Gentlemen, with regard to the local authorities, what is the current role of the Crown Estate Commissioners in the development of marine renewables? Are you happy with that role? Briefly-don’t all jump in at once. I think we know the answer, but just for the record.

Cllr Foubister: I can start, but I think I effectively answered that question previously. We have our own indigenous industries in and around the Islands, and these decisions are being taken without any local consultation whatsoever, which can have a serious impact on inshore fishing and so on.

Q273 Lindsay Roy: Is that universal across the authorities?

Cllr Foxley: Yes. Can I just make a couple of comments? No, we are not happy with the Crown Estate. First of all, in terms of capital, I recently listened to Rob Hastings, who is the Marine Director of the Crown Estate, giving evidence and their investment across Scotland in terms of the marine environment was £4 million to £5 million over the last five years and £5 million over the next five years per annum. To put that in context, the Highland Council’s capital programme is £70 million a year and we are prepared to guarantee loans to Scrabster of £6 million. The figures have stuck-I was surprised it was that small. That is a very small forward investment.

Secondly, I usually hear about the leases, as does my director of planning and chief executive, on the radio or when we get the Scottish national papers. I recently met quite a prominent developer of offshore marine, and this is a direct quote from him. He said, "Now I know what it is like to have dealt with a medieval feudal baron because they have the power to say yes or no with no right of challenge, no right of recourse". He was explaining he had spent £1 million on development work, not in Scotland but within the UK, came to the second stage of leasing and that lease was going to another company. That is what we are up against in terms of the leases.

Q274 Lindsay Roy: So it is not engagement, it is exclusion?

Cllr Foxley: Yes.

Cllr Walsh: There is a need for clarity, because the Crown Estate have this commercial approach to business. They have the land that is under the sea and they are actively promoting that land for particular developments, in this case it is renewable energy, and that is the way the process works. I think in recent times we are a bit more fortunate in Argyll and Bute inasmuch as we have the Argyll and Bute Renewables Alliance, which has the developers and the Crown Estate now in the one room and we are able to discuss the renewable energy approach; but that is after, if you like, the areas have been identified. We do get some information on the exclusivity process, and I think there is probably a good area for discussion. I think it was Graeme who raised the question of what will happen in relation to the UK Government and the Scottish Government and how this process will roll out; that also will involve the exclusivity process, because there is a whole range of things that can be built into that, and that is something we are working at just now. For example, on community benefit-whether it is the Scottish Government, a local authority or another body-the issue is to get involved in this process, which is not clear at the moment and not possible, although we are beginning to move that way.

Q275 Lindsay Roy: So initially, and perhaps thereafter, things have been done to you and not with you; would that be a fair summary?

Cllr Campbell: Sorry to interrupt, but could I give one example? Pelamis were trying to develop a 40 megawatt development off the west coast of Lewis, which is an area we were trying to include in the infrastructure of the harbour for a long time. We did not find out anything about that until days after Pelamis had been told that their business plan had been looked at by the Crown Estate; it thought it did not stack up and therefore it would not go ahead. For us or our communities not to be involved in these discussions-what could have been gained if that infrastructure were put in place, and what else could have been built on in terms of fishing infrastructure, tourism infrastructure, yachting infrastructure. If we are going to look at developing a place, we have to have discussions that include all the stakeholders, not just the Crown Estate saying on a business plan basis that this goes or does not go ahead without us even being involved.

Q276 Lindsay Roy: We have heard from you already, if I am right, that the Scottish Government has been reluctant to talk about further decentralisation with you in any depth whatsoever. The Crown Estate referred to memorandum of understanding proposals, on the one hand, with the Scottish Government and also with local government. Have you been involved in any discussions on that with the Crown Estate, and if so, on what basis?

Cllr Campbell: The Highlands and Islands Leaders Group got involved in discussions with the Crown Estate about two or three years ago as to having a memorandum of understanding with them. Speaking for my own council, when we took it back and looked at it, my own view was it was not worth the paper it was written on. It was a draft.

Q277 Lindsay Roy: So it has remained a draft and there have been no further discussions?

Cllr Campbell: Our council took a view that we would not pursue that because we did not think we were gaining anything out of it in any meaningful way.

Cllr Walsh: But that was a drive from the local authorities collectively in the Highlands and Islands to be involved, so we were happy to draft a memorandum of understanding that did involve us in the process. As I said, we had a meeting in which the Minister was present through VC, and he suggested that we hold fire on the memorandum of understanding until they had discussions with the UK Government on devolution.

Q278 Lindsay Roy: So it would be euphemistic to say that you were disenchanted and disillusioned?

Cllr Foxley: We are all in agreement on that but we had a draft MOU and the words sounded fine. It was the underlying action plan where I think there were to be direct actions into the local authorities and local communities, but, to be honest, two things changed. Things changed within the Scottish Government, but they certainly changed at a UK level because there was the Treasury Sub-Committee 18 months ago and now your own Committee. That is a level of interest that none of us have ever experienced before in the Crown Estate, so this was not the time to try and sign up for half a fig leaf. I think 10 years ago, if I am honest about it, we probably would have done that because there was nothing else, but the climate has significantly changed. There are wee cracks in the edifice now.

Lindsay Roy: Just wee cracks?

Chair: Boys with levers trying to widen them a little bit.

Q279 Jim McGovern: Possibly this question has been covered in large part in previous contributions, but just for the record it is worth asking it again. I realise the Chair has been trying to juggle the balls or keep the plates in the air, or whatever you want to call it. I know if there are five different leaders the chances are you get five different answers, but everybody does not have to answer this one. The UK Government announced a new Coastal Communities Fund. I am sure Highlands and Islands Enterprise will have a view on this, but everybody can give us an answer or you can nominate one person-deal with it how you will. How do you view the fund from the Highlands and Islands’ perspective?

Cllr Foxley: We certainly welcome it. There are three elements. First of all, we said informally to the Treasury and also in a letter we would certainly like that to be 100% rather than 50%. We think the figure anyway is too low. Our estimate of marine revenues, fish farming, alone in Highland is £2 million; we think across the Highlands and Islands it is £5 million. It is very hard to get the figures out of the Crown Estate but our estimate is about £7 million in total; half of that is £3.5 million, so we would settle for that. The discussion we had before, which I alluded to briefly, is we would see that being managed by a strategic group for the Highlands and Islands local authorities with Highlands and Islands Enterprise and anybody else who was appropriate, rather than a big lottery.

Q280 Jim McGovern: Can I just interrupt you? When you say £3.5 million would be acceptable, you are saying £3.5 million would be 50% of your figure, and that that would be acceptable?

Cllr Foxley: That would be an acceptable start because we are then doubling it and then we will say 100%. There are clearly implications for the Barnett formula but it is a significant start.

Q281 Lindsay Roy: I take it you are unhappy about the proposal that these applications should be through the Big Lottery Fund?

Cllr Campbell: Absolutely. I think one thing that we can point to is that on European funding we have an organisation that works very well across the Highlands and Islands regarding how we judge and disburse such funding. I think we are all in agreement that we can equally manage that without the Lottery being involved, just on the condition that the actual office for the employees comes to the Western Isles.

Chair: And drives on the road in Barra. I think we do understand that. That has had a lasting impression on us. If you are going to come back to us about how the division would be between the ports and all the rest of it, consider being a bit more explicit about how you see the resources coming and then being divided up. I think we did hear the people in Scrabster saying that they did not want all the money to go to Inverness because they thought they were a bad lot; they wanted it to come to Scrabster. They certainly did not want it to go to Edinburgh. There has to be some sort of way in which particularly local community groups that maybe own the land do get something out of it, and then beyond that it goes to a wider area, and beyond that a wider area.

I think you have to give us some sort of feel for what would be appropriate in these circumstances. There has been a lot of wandering around the subject without having something firm, and I think if you were maybe proposing something that could then be the basis for further discussion with all the relevant interested parties, it would have the advantage of you doing it and getting the blame, rather than maybe us doing it. It could confirm people’s prejudices about local authorities, rather than about MPs. You wanted to come in, Alan, and then I will pick up some of yourselves.

Q282 Mr Reid: It was just Michael’s point that he thought the Crown Estate were underestimating the profits made in Scotland. Would you be able to send us a breakdown of your calculation so that we can challenge the Crown Estate on that?

Cllr Foxley: Yes.

Cllr Walsh: There is a big issue here that I think is vitally important in terms of the moneys that are likely to come to Scotland from renewable energy, some £30 billion. You have heard me saying this, Chair, at Tiree: that for once there is a real opportunity to get positive and tangible developments for some of the remote and island communities. At the moment we suffer out-migration of the economic activities group people. There is an issue about people having to leave the Island to get a skill, to get a qualification, and they usually don’t come back until they retire. Once in a lifetime we get a real opportunity to do something about that, not just in the islands but in the remote and rural areas, and there needs to be some kind of synergy about this. There is this question about, first of all, clarifying the issue of devolving the administration and the revenues currently enjoyed by the Crown Estate-and they are significant and there is a potential for even more significant resources. It is how we use that to the betterment of or the benefit of Scotland, and also specifically those communities where there will be an impact. Without a doubt there will be an impact. It is trying to get that kind of balance, if you like, and getting a mechanism and a process for actively doing that.

Local authorities are well placed to do it. We spoke about the Coastal Communities Fund there. Would it not be wrong for resources to be channelled for flavour of the month projects? We need resources to invest in our schools, in our roads, creating jobs and all the rest of it; it is this important balance that we need to work out. The reason local authorities have taken the view they have is that we are best placed locally to do that through community planning. We have all the main players in the room discussing strategic policy with the local authorities, looking at our budgets, looking at our priorities. I think that is a key way forward.

Cllr Foubister: I see this in a different light. I do not see this as a sort of slush fund for local authorities for trust ports; rather, as an investment in a new industry for the future to make Scotland, in particular, as a whole much more sustainable. For example, a large part of the resources are on the north, and certainly on the west coast of Scotland here, but if we are going to have a complete industry here we have to look at other venues within Scotland for manufacturing, because that is what we are looking for. We are looking for a combined thing-the resources can be at one place, the manufacturing can be at others-that, if it is supported and diversified throughout Scotland, can support communities throughout the length and breadth of Scotland. There is a huge opportunity for this to be a world leader here.

In terms of actual payback, certainly in the developments we are involved in in Orkney, at the moment we are looking towards Europe for partnership funding. It is difficult for a local authority-it is certainly more difficult even for trust ports to access that money without some sort of percentage input from themselves. This is an area and an opportunity where, not only will the payback be to the local areas, but we could enhance that by taking money in from Europe as well.

Q283 Chair: I like very much the sort of things you are saying there, but much of that is what we are asking you to do for us, is it not?

Cllr Foubister: Sorry, I did not catch that.

Chair: Much of what you are saying there is what we are asking you now to do for us, ranging from how you are going to deal with the funding of the interconnectors and so on, right down to what is the benefit for the community-owned land group in Ness, for example. That is specifically what we are asking you to come back to us on. I think we will try and make time to see you as soon as-I said Monday, but Tuesday possibly. Same time next week we could meet, if you had your report ready by then. I think it is a question of: the mood is there to start exploring these things and it might not come round again at all for a long time, so the onus now lies on you to discuss some of these things and put them forward to us.

We are getting towards the end of this meeting. If this was Edinburgh we would have said you will have had your tea. We have tea and coffee there for you, and everybody else is welcome to join us, but I just wondered whether or not there are any final points that you want to make-any answers that you had ready to questions that we have not asked yet?

Cllr Campbell: Can I just maybe come in? I am eager to come in on what Dick says because we have a different opinion on that one, I think. I would hold up what we have done with the Western Isles Development Trust for onshore renewables as a way of delivering what we can get out of this. It has to go to empowering communities. It has to go to building for the advantages for renewables; it is not there to fill gaps in budgets. I want to make that absolutely clear.

A lot of the work you are asking us to do has already been done, so your date of Monday or Tuesday I don’t think is impossible because we have a good relationship working together. We have been working on the coastguards and the tugs very coherently together over the last while. I think that we can bring it forward to our respective authorities very quickly, get overall approval and get it to you.

Q284 Chair: Just following that up, it may very well be that if you have something, you do not just simply present it to us-we could maybe meet with some of the trust ports and some of the community organisations collectively just so they can have some sort of input into this as well. I will maybe leave that with you to think about-where and how and when we could do that. But it will be much better if going forward we had a broad alliance: a consensus of opinion emerging about how this is progressed, because there will be those, I think, that just want to grab as much as possible either to Edinburgh or somewhere else, where it could quite easily disappear into a black hole, to be used to subsidise general spending, cut taxes or something similar. As you said, I think it is a once in a lifetime opportunity so I think we have to try and not only identify what we want to do but build a consensus.

Cllr Walsh: Can I just pick up a point in that one, so that there is no confusion. It is about what has real community benefit, rather than grabbing money because it is there. It is about developing real community benefit.

Cllr Foxley: I am very happy to get as much as possible back by Monday or Tuesday. I just want briefly to touch on one thing that has not been referred to, which is about training. I had a discussion with head of external affairs at the Crown Estate as recently as last Friday and, as we all know, there are significant cuts in the public sector, including the Scottish Funding Council. The point that we were making is that we want as many people in the Highlands and Islands to get the jobs in offshore renewables-we want as many people within Scotland to get those jobs. We were pressing the Crown Estate as to what investment they could make, so that an offshore island, the local community, would train to take part in that, and we did not get very far with that conversation.

I had a conversation with Roger Bright, the chief executive of the Crown Estate, two years ago about making that sort of investment. We were talking about a potential figure of £4 million a year. That was at the time we were talking about the MOU but nothing has come through. So, on the 3,500 jobs that will be coming to NIG in the near future, unless people are trained up, it won’t be people from there that will be getting those jobs, and that is critically important.

Q285 Chair: I have been advised that I should make it absolutely clear: he did not pass us a note but he did tell us that when I said Monday or Tuesday, that was a joke. I mean it was not necessarily Monday or Tuesday.

Cllr Foxley: We rise to the challenge.

Q286 Chair: I didn’t want to get myself into any bother for saying something that is misunderstood; so "as soon as" I think would be the best way of dealing with that.

John Watt: I was just going to repeat Michael’s point: the important aspect is, if you look at the supplementary written submissions from the people at the table, there is a reasonably clear consensus that we need to invest in long-term legacy projects with any revenue that is derived from these activities; and skills and infrastructure and energy-related projects are consistent across the responses.

Chair: I think there is a consensus, but there is also a great deal of misunderstanding or anxiety about what might be involved, so I think that is where we do need to speak to some other people.

I thank you very much for coming. As I said, there is tea over there, at a modest charge, and there might even be a biscuit.

Lindsay Roy: We would also like to thank you for the warm welcome that we have had when we have been in your communities, because it certainly has been exceptional.

Prepared 19th March 2012