Scottish Affairs - Minutes of EvidenceHC 1117

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Evidence heard in Public

Questions 807 - 898



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Oral Evidence

Taken before the Scottish Affairs Committee

on Wednesday 14 December 2011

Members present:

Mr Ian Davidson (Chair)

Fiona Bruce

Graeme Morrice

David Mowat

Mr Alan Reid

Lindsay Roy


Examination of Witnesses

Witnesses: Right Hon Michael Moore MP, Secretary of State for Scotland, Right Hon David Mundell MP, Parliamentary Under-Secretary of State for Scotland, Miss Chloe Smith MP, Economic Secretary to the Treasury, Paula Diggle, Treasury Officer of Accounts, and Alisdair McIntosh, Director of the Scotland Office.

Q807 Chair: Can I welcome you all to this meeting of the Scottish Affairs Committee, particularly Minister Smith, as this is the first time you have been here? I understand that Ministers have to leave within the hour, so it would be appreciated if answers were condensed. From my time on the Public Accounts Committee, I remember how lots of officials used to speak for hours as a means of killing time. We would prefer not to have that. Can I ask first whether the Government are willing to contemplate any changes in the operation of the Crown Estate? Or is the Government’s intention simply to defend the status quo?

Miss Smith: The Treasury is the Crown Estate sponsor, so I am the Minister who keeps in regular contact with reference, when necessary, to the Chancellor in relation to the Crown Estate. If I may answer and open up the word "devolution", which no doubt my colleagues will come to in the course of the session, the intention would be for the Crown Estate to remain a UK-wide organisation.

Q808 Chair: Without any changes?

Miss Smith: I would refer to the work that has been done on the Scotland Bill, which formalises the position of the Commissioner. Otherwise, yes, I believe that would be the case.

Q809 Chair: Could I just ask for clarification from Michael and Chloe about your respective responsibilities for the Crown Estate, since we have heard from people in various locations about the difficulties of having two ministerial teams involved in some way or another?

Michael Moore: As Chloe has rightly said, the Treasury is the sponsor Department; she is the responsible Minister in the Treasury for oversight of the Crown Estate. The Scotland Office has a locus by virtue of the 1961 Act, which includes the power of direction for the Chancellor of the Exchequer and the Secretary of State. Custom and practice has been that the Scotland Office, or its predecessor the Scottish Office, had almost no involvement whatsoever.

The power of direction has been regarded as a power to be held in reserve, often described as the nuclear option, should the Crown Estate Commissioners in their oversight not be looking after the Crown Estate appropriately. It has never been used and my sense, after 18 months of engagement with the Crown Estate, is that it would be used only in extremis. That is not to say that the Scotland Office, because of the significant interest the Crown Estate has in Scotland, should not be engaged. That is certainly something I have sought to do in the past 18 months. We work together; I worked with Chloe’s predecessor Justine Greening; and our officials work closely all the time.

I would say that having two Departments involved, rather than offering some difficulty, is a good, positive sign of constructive engagement. Out of that, we have seen in the past 18 months a higher degree of involvement from me than any of my predecessors. We have also begun to see, through the Treasury and our own work, things such as the Coastal Communities Fund coming forward and we have the Scotland Bill provisions. As I have previously said to the Committee, we were obviously interested to hear your findings about how things would develop. As Chloe said, notwithstanding the Scottish Government’s view on devolving the Crown Estate, we have yet to be persuaded on that. We think it should remain a UK-wide body.

Q810 Lindsay Roy: Michael, why has custom and practice changed? As Secretary of State, how regularly do you meet representatives of the Crown Estate, and what has been the nature of the discussions?

Michael Moore: I arrived in office with the concerns of many of my colleagues, including Mr Reid, from Highlands and Islands communities in particular, saying that they felt that the Crown Estate was not responsive enough; that on some good pragmatic areas, such as the sale of sea bed for ports and so on, there had been little progress historically. I thought that, given that the Secretary of State for Scotland is named in the Act, it was my duty to show at least a bit of interest. On the specific point of how often we have met, I think it is now five formal meetings. There are other informal contacts. As it happens, the Crown Estate Commissioner for Scotland, Gareth Baird, is a constituent of mine, and I meet him in other circumstances as a result. Our officials meet regularly, both with Treasury colleagues and with the Crown Estate.

Q811 Lindsay Roy: What have been the key beneficial outcomes of these meetings?

Michael Moore: I hope that we have been able to encourage the Crown Estate and see it develop its accountability in Scotland and its willingness to engage. My judgment on this-I think it is one that it would accept-is that some of the communities around the coast in particular have been critical of the accessibility and transparency of the organisation. There has been a need to develop the way in which the Crown Estate engages with the Scottish Government, although that is a two-way process-it requires the Scottish Government to engage too, but I think we have seen progress on that as well. I think it has also helped to inform the major development of the past 18 months, namely the Coastal Communities Fund, which we will be able to produce further details on and make a proper announcement from Chloe and colleagues in, I hope, the very near future.

Q812 Lindsay Roy: Can we be clear, for the record, that you do not consider devolution of the responsibilities of the Crown Estate Commission to the Scottish Parliament to be the most appropriate way forward to improve transparency and accountability in Scotland?

Michael Moore: If the objectives are to improve accountability and transparency, we can improve. We have made progress on the governance of the Crown Estate. I am happy for Chloe and colleagues to talk about the measures.

Q813 Lindsay Roy: When you say "we," who do you mean by that?

Michael Moore: I mean the Government. We are listening, however, and that is why the evidence that you are taking and the views that you come to in your report, as I said right at the outset when you said you were going to do it, will be an important part of that process. If you were to come up with a vastly different perspective on that, obviously we would need to look at that very carefully, but for the reasons that I think have been set out in evidence to you from the Crown Estate directly, this is a UK-wide organisation that takes advantage of the different parts of the UK in terms of what it can offer as investment vehicles and returns from those. It is learning. It has to be more responsive and open to our scrutiny, and I hope that you concur that that is now becoming the case.

Q814 Chair: Could I come back to the question of ministerial responsibilities and the extent to which you, jointly with Chloe, have complete control over the Crown Estate, as distinct from the Scotland Office? Also, the Crown Estate was a body created by Parliament: to what extent should it be responsible to Parliament, rather than simply being responsible to the Government?

Miss Smith: If I may turn to a point within your question, the Treasury does not have complete control over the Crown Estate. The Crown Estate, as the rest of your question underlines, has a governance structure of its own. The Treasury, I would say, is its liaison point within Government, but it does not have control over it in that sense. However, between the two offices, it is the Treasury which is in the lead rather than the Scotland Office-that is true.

On the second part of your question on accountability to Parliament or the Government, to back up what has already been referred to, it has been established under statute-the 1961 Act. It certainly lays accounts in Parliament, so it is clearly accountable in that sense to Parliament. It runs itself-the Secretary of State has already referred to this-as a very professional investment organisation, for sound reasons in that sense, and, of course, it runs its affairs on behalf of the monarch, so there are further limits between what the Government could do constitutionally, but I believe it is accountable to Parliament through its accounts and through the link with the Treasury.

Q815 Chair: When was the last time there was a debate about the Crown Estate and its accounts in Parliament?

Miss Smith: I am afraid I can’t answer that, but perhaps my official can.

Paula Diggle: First of all, there was a Treasury Committee hearing at the beginning of last year, and there were a couple of PAC hearings about 20 years ago.

Chair: Twenty years ago-that’s what I thought.

Paula Diggle: Before my time, I’m afraid, so I can’t give an exact date.

Michael Moore: And your inquiry now.

Miss Smith: Indeed.

Q816 David Mowat: To follow on from that, you described the Treasury’s role in relation to the Crown Estate-would you say it is roughly analogous to a shareholder role and that the Treasury acts as the shareholder in terms of the Crown Estate?

Miss Smith: I couldn’t confirm that, because, of course, there isn’t a financial transaction in that sense.

Q817 David Mowat: No, I mean analogous in the sense of so far as you have a governance role over it.

Paula Diggle: Perhaps I can clarify. The Queen owns the property of the Crown Estate and she owns it by right of her place as the monarch. However, the Government, under the statute of 1961 and indeed under the Civil List Act 1952, get the revenue of the Crown Estate. That is how it works.

Q818 David Mowat: Let me ask the question a simpler way then. I was just trying to get at to whom they are accountable. Who would actually act if the operations bit was very poor? Who would do something?

Paula Diggle: If something was going wrong, the Treasury would see it as its duty to put things right.

Q819 David Mowat: To that extent, you act as the shareholders then?

Paula Diggle: We are its sponsor, and we act in such a way as we hope that anything will never go wrong, because we keep in close touch.

Q820 David Mowat: Well, we all hope nothing goes wrong, but occasionally in life things do, don’t they?

Paula Diggle: Of course. If something were to go wrong, we would be the backstop, yes.

Miss Smith: If I could return to what has already been referred to, that-in the nuclear option-would amount to the power of direction to ensure that the Crown Estate and its Commissioners adhere to its own statutory footing.

Q821 Chair: It was made clear to us that it was really the Treasury, because the chief executive of the Crown Estate told us, "Formally we have to be accountable to the Treasury. We can’t be formally accountable to two masters." That tends rather to suggest that he listens to the Secretary of Scotland as a courtesy, rather than anything else. Is that fair?

Michael Moore: I think we have more than courteous encounters, but I have never ducked the fact that this is primarily a Treasury responsibility. As I say, I am showing more interest and involvement in the Crown Estate than was the case with my predecessors and I think we have developed a good model for that, but I would not seek to challenge the view that the Treasury is the lead Department.

Q822 Chair: Could I just follow that up? Your predecessors would seem then to have been negligent in dealing with the Crown Estate-

Michael Moore: Well, I-

Chair: Can I just finish the point? As we have travelled around Scotland, we have heard a host of horror stories about the way in which the Crown Estate has behaved without any consideration, discussion or consultation with local communities. If you are saying that this situation has improved under you, then presumably that is an implied criticism of your predecessors, who presumably allowed the Crown Estate to get on with it without dealing with them.

Michael Moore: I am not in the business of apportioning blame or criticism; I am simply pointing out-because you, as the Select Committee, are concerned to see this-that the Scotland Office is engaged with the Crown Estate. I am very aware of the criticisms that have been made as part of your inquiry, but also more generally. As I said in my earlier remarks, part of the reason why I took an interest in this from the outset was that I was very familiar with what colleagues, particularly in the Highlands and Islands, felt about the role of the Crown Estate. This is a process that has to continue to develop. I am not going to claim today that we have reached the right balance in terms of engagement and accountability to local communities.

Q823 Lindsay Roy: You will appreciate, Michael, that in many of our witness statements people have said they feel disfranchised, and that things are done to them and not with them. Have you taken that up directly with the Crown Estate Commission and the Crown Estate Commissioner in Scotland?

Michael Moore: Apologies. The start of the question was whether I have taken-

Lindsay Roy: Have you taken these things up-that people are disfranchised and that things are done to them and not with them, so they often find out as an afterthought?

Michael Moore: You have already been able to put the specifics that you have encountered in the inquiry to the Crown Estate, and it can see the evidence and I would expect it to respond to that, but the general issue has been central to the types of discussion I have had with the chief executive, Roger Bright, and the commissioners over the past 18 months. They, too, recognise that they have not necessarily always done the right things. That is why they have been looking to get memorandums of understanding with the Highland council and others, and to establish proper protocols with the Scottish Government and with the Committees of the Scottish Parliament-so that there can be more interaction, and they can hear the criticisms and learn to work to avoid those being repeated.

Q824 Lindsay Roy: What about at the level beneath that with local government and local communities, because they are the ones who have complained most vociferously?

Michael Moore: We will be interested to look at what the report from you says, and if there needs to be another level of engagement beyond what they already do or are contemplating, that is something we would obviously want to reflect on, but I am not trying to downplay the concerns that people express.

Q825 Lindsay Roy: You are aware of the issue?

Michael Moore: Yes.

Q826 Chair: Would it be fair to say that one of the beneficial by-products of Calman is that much more attention is now being paid to the Crown Estate? It was not until a host of submissions came to Calman about the Crown Estate that this whole issue moved considerably up the agenda. Is that fair? Was the Scotland Office starting to engage more with the Crown Estate before all this correspondence came in about Calman?

Michael Moore: The Calman process predates my time as Secretary of State and I am sure my predecessors will be happy to supply information if that were needed. As I have said, I am not criticising any of them or suggesting that things went badly under their watch-far from it. The point is that Calman drew some attention to this. Interestingly, the recommendations were fairly limited, but we have reflected the central point, which is that there should be a Scottish commissioner, which is recognising Scotland’s particular place in the Crown Estate’s portfolio.

Q827 Chair: Could I turn to Chloe for a moment? Do the discussions between the Treasury and the Crown Estate go beyond the questions of finance? Do you discuss with it the question of its accountability in the relationships with local communities or are you only following the money?

Miss Smith: It is fair to say that the Treasury has its priority in following the money. I would also build on my previous statement to say that we also take an interest in the Crown Estate’s strategy. We would expect it to discuss that with us. There are also major initiatives, such as, for example, some that we will no doubt discuss later under the Coastal Communities Fund. Do I go into further detail with the Crown Estate beyond that? No, for the reason that I have set out already, which is that it has its own operation.

Q828 Chair: Can I be clear that the main Government Department that deals with the Crown Estate has been pursuing issues relating to finance and has not really engaged with the Crown Estate on its work with local communities and the way it interacts with them and anything like that?

Miss Smith: No, I wouldn’t say that. As I say, we take a clear interest in its strategy and its major initiatives. Under those headings, we absolutely take an interest in its accountability, as would Parliament as well.

Q829 Chair: So if there is criticism of the lack of accountability and contact between the Crown Estate and local people, the Treasury will bear a share of that responsibility?

Miss Smith: We would take an interest in the debate.

Q830 Chair: But if blame is being allocated, because of the high-handed way in which the Crown Estate has dealt with local communities, you would accept that the Treasury is partly responsible for that, since you have discussed this with it.

Miss Smith: I reiterate that the Treasury is the sponsor of the department and so takes an interest in both its accounts and its strategy. We expect it to respond to such local points, as I believe it has.

Q831 Lindsay Roy: You said that you take an interest. How robust is that interrogation of its planning and its strategy?

Paula Diggle: Perhaps I could take this. We have two formal sessions each year, in which we look first at the forward year’s budget and secondly at its strategy on a three-year view. We look at all aspects of it, not just the financial side, although that is very important to us. We also look at its broader credibility in the marketplace generally.

Lindsay Roy: Can you instance any recommendations that you have made to the Crown Estate to change its approach and its strategy?

Paula Diggle: It is never, or hardly ever, a question of formal questions. It is more usually a question of talking something through and deciding a line that makes sense. It is influence and nudging, if you like, but it works.

Q832 Lindsay Roy: Has it made a difference?

Paula Diggle: Yes, it has.

Q833 Lindsay Roy: Can you give me an instance?

Paula Diggle: I do not think that I could, I’m afraid, because some of this is confidential stuff that relates to commercial decisions.

Q834 Lindsay Roy: So in the area of commercial work, you feel that you have made a difference, but you cannot reveal the details, because of confidentiality.

Paula Diggle: I do not think that I can, I am sorry, but I assure you that it is a robust exchange.

Miss Smith: Mr Roy, if I may come back in on that question to add a couple of further details, I am clearly a relatively new Minister, so you would expect my engagement with the Crown Estate to have been two months’ worth, if you put it like that, which-

Q835 Lindsay Roy: Telescoped.

Miss Smith: A running start, as with so many things. Within that time I have met the Crown Estate and intend to carry on doing so. My predecessor, of course, held regular meetings with the Crown Estate. Also, I will add that the Secretary of State for Scotland and myself will be opening up what you could call a positive new set of meetings in the new year onwards with the Crown Estate jointly, in which we will be able to discuss issues such as this, as well as the oversight we have already made clear to the Committee.

Q836 Chair: Can I just follow up the point that Ms Diggle made? The impression that we have from meeting local communities is that the Crown Estate has been for a long time essentially a top-down, secretive organisation which did things to people. Did the Treasury ever intervene with it at all in regard to how it was dealing with local communities and the total lack of consultation? For example, in the case of the introduction of fish farms, local communities suddenly found that the Crown Estate had decided things, did you involve yourselves at all in that?

Paula Diggle: Well, the Treasury certainly kept in close touch with the Crown Estate, but you have to remember that for many years it chose to fly below the radar. It did not want to have a high profile. It wanted to just get on with its business in a straightforward commercial fashion. We have engaged with it, for example on the matter of residential housing. If you remember, that was a big issue at the Treasury Select Committee at the beginning of last year-it became a matter of public interest-and we were concerned that that should proceed in a way that was-

Chair: No, no. Not immediately recently.

Paula Diggle: I am afraid, I cannot tell you about fish farms.

Q837 Chair: You are here as the accounting officer on behalf of the Department to tell us about what happened, not only from your own experience in your time here, but also that of your predecessors.

Paula Diggle: What I can tell you is that I know that the Crown Estate have taken great trouble to try to be generous to their tenants. For example, they pay for research into fish farming. They genuinely try to foster that particular industry, in the interest not just of the tenants but of local employment and so on.

Q838 David Mowat: I was reflecting that perhaps the issue that we have here is that the sponsoring Department, as you call it, is the Treasury, which by its nature has a primary interest in financial matters, I guess. Some of the questions that we are getting relate to the fact that the Crown Estate is still a public body, and that there is some evidence that its interactions with the public are not always satisfactory. That slightly begs the question whether that is partly due to the fact that the Treasury, as a sponsoring Department, has a primary interest in finance. That was the driver behind that observation.

I want to ask a couple of questions on finance. I am interested in how accountable, even in the narrow financial sense, the Crown Estate really are. How do you judge whether they are good or not, compared to equivalent organisations? They have a huge amount of assets-it is a big, big organisation. I understand that you have these six-monthly reviews. Have you ever said, "This is completely inadequate; for what you are doing and all the other things, your returns should be"-let us say-"20% more"?

Paula Diggle: Under our guidance, they actually judge themselves. They actually publish their results compared to various independent indices.

David Mowat: Yes, I know that.

Paula Diggle: And they actually come out rather well against those.

Q839 David Mowat: That’s right, but when you judge yourself that is often the case.

Paula Diggle: These are indices that other people draw up. I don’t think it’s just a straightforward self-assessment. If it were, I would be as nervous as you are, but I genuinely think that these are independent indices, which have some weight and can be trusted.

Q840 David Mowat: Okay. I will move on. I would just make the point that it is a very important issue whether they are really accountable to anybody; otherwise you have effectively got a revenue-earning quango which just becomes self-perpetuating and self-satisfying.

Since 2002 there are no accounts for Scotland. I think that is right, isn’t it? That was due to the way you chose to organise yourselves. Again, that becomes an issue in the context of devolution and all the rest of it. I think 3% or 4% of the revenue of the Crown Estate is in Scotland, and yet in some aspects-in terms of renewables and all of that-it is very important to the development of aspects of Scotland. Is the Scottish aspect under-managed because of the way that you are not structured around Scotland any more?

Miss Smith: Let me answer some of that and refer to Paula for further detail if that is required. I think it is fair to say that the Crown Estate is a UK-wide organisation, as we have already suggested, so there isn’t such a thing as "Crown Estate Scotland" on a logo or anything like that, but it has been possible to say what has arisen from the holdings in Scotland. You have cited one figure and you could also cite the figure that suggests that the growth surplus is £9.9 million from those activities in Scotland. It is possible to get to that level of detail without it being a Scottish organisation. It is a matter of technicality as to whether that amounts to it being an account for Scotland-I will ask Paula to address that.

On the accountability question for Scotland, I would note that, of the board of Commissioners, you have made the point yourself that there is a 3% proportion for Scotland, as it were, against the rest of the UK. Of course, one eighth of the board looks at Scotland against the rest of the UK’s interest in the Crown Estate. I would say that that is a very positive proportion in terms of the accountability given over to Scottish affairs. Would you like Paula to go into more detail?

Q841 David Mowat: No, that is useful. To summarise that, your judgment is that Scotland is not under-represented and that, actually, it is over-represented in terms of the governance.

Miss Smith: My judgment is that it is well represented.

Q842 David Mowat: You have asked the NAO to look at the Scottish figures-why is that?

Miss Smith: That is correct. It is responsible for the Crown Estate’s audit, so I think it is appropriate to do so.

Q843 David Mowat: So you have specifically asked it to look at the extraction of the Scottish figures-you quoted £9.9 million-just to validate that.

Miss Smith: To be clear, I understand that there is an option resting with the Comptroller and Auditor General to carry out studies, if he thinks it is worth doing so, to investigate value-for-money, but yes, I would regard it as perfectly legitimate to do so.

Q844 David Mowat: As you say, the Crown Estate is managed across the whole UK now. A feature of that is that there have been a lot more capital disposals than capital investment in Scotland over the past decade. I suppose the attitude to that would be that that is just the way the operational decisions were made at the time.

Miss Smith: I think you would also want to look at that decision over a number of years. It is managed as a UK-wide portfolio, so there are parts that go up and parts that go down over time and over places. You would need to add time into that.

Q845 Chair: What time period do you think we should look at?

Miss Smith: May I ask Paula to answer that, if we are going backwards through the accounts?

Paula Diggle: We have figures for the past 12 years, which we gave to the Scottish Parliament and we are happy for you to have them, too.

Q846 Chair: Fine. What do they show?

Paula Diggle: I’m sorry, but I don’t have them with me. They show that there has been ebb and flow of investment, exactly as the Minister describes.

Q847 Chair: What is the overall impression-has it ebbed more than it’s flowed?

Paula Diggle: I think it’s probably slightly more investment into Scotland. I can certainly corroborate that the Crown Estate spends a lot of time thinking about renewable energy prospects, and it is very concerned that that particular area of its business should flourish and has been taking its own risks in actually investing in that.

Q848 David Mowat: I have one more question, and then Graeme wants to come in. If the Crown Estate were devolved to Scotland-that is what some people think should happen-given that the Scottish percentage of it is something like 3% or 4%, my understanding is that that would be of disbenefit to Scotland in terms of how the Barnett consequentials work, because they would give it something more like 10%. Am I right?

Miss Smith: The basic point there being that the proceeds from the Crown Estate go into the UK consolidated fund, which is then shared back out, as you say, according to Barnett, and to the other devolved Administrations.

Q849 David Mowat: Yes, and the result of that is that, if it were devolved, there would be a net loss to Scotland in terms of cash.

Miss Smith: That is certainly possible.

Michael Moore: Yes, if you did it crudely on the basis of the current state of the investment portfolio, but, if I may say so, I think that what might lie behind the portfolio management of the Crown Estate is that, over time, it will move from investments in residential or commercial property into the marine renewables estate. Scotland will have had less investment over recent times than other parts of the United Kingdom, but, going forward, the marine renewables estate stands to have significant investment, but that is done on a UK basis and to maximise the impact of that around the whole of the United Kingdom. I would be very surprised if, in a few years’ time, successor Committees, or indeed this very one, looked at and examined this and did not see significant additional investment in Scotland.

Q850 David Mowat: That answer implies that the 3% or 4%, which is the current figure, will increase to 10% or 12% and then it will reverse.

Michael Moore: Indeed. I think there is a big argument for saying that, as a UK, there is more access to investment firepower than there might be in a separate devolved arrangement.

Q851 David Mowat: I will finish on this. It strikes me that that is a very important answer, because, in a sense, what you have just said is that the materiality of Scotland in the total Crown Estate is, in your judgment, going to increase significantly in the next few years.

Michael Moore: I would anticipate that. Again, the Crown Estate themselves manage the portfolio, but given our anticipation of how marine renewables will develop, I absolutely agree with you.

Chair: To come back to the point that Paula Diggle made, the figures that we got from the Crown Estate indicated that it had taken £10.6 million more out of Scotland than it had invested over the last 12-year period. I understand your point about that changing in the future, but that has happened.

Q852 Graeme Morrice: We were discussing the finances with Crown Estate on Monday when were taking evidence from them in Edinburgh, and we noted that the actual surplus from the Crown Estate’s operations in Scotland was significantly less than the £9.9 million that was reported in their accounts. We also note that the Treasury has announced that it will be giving £3.9 million back to Scotland through the new Coastal Communities Fund. What is the net benefit to the UK Treasury from the Crown Estate’s operation in Scotland?

Miss Smith: I believe that is £10 million of a total of £231 million in 2010-11.

Paula Diggle: It is actually £10 million as part of £264 million, gross-on-gross. That is the gross comparison. We do not have a net profit figure for Scotland.

Q853 Chair: I think the point that we discussed on Monday was that the net profit figures would be considerably less-

Paula Diggle: They would.

Q854 Chair: Given that all the overheads and all the central charges and so on would still have to be deducted, it is really quite a misleading figure to have the £9.9 million as being a profit made in Scotland since it is in fact much less than that.

Michael Moore: It is a gross surplus. Again, it comes down to the fact that the Crown Estate is managed as a United Kingdom entity with all the overheads and so on. One could do a series of allocations of those costs out to different parts of the UK if one chose but, as long as we understand gross surpluses and net surpluses and how they are applied around the UK, you are right.

Q855 Chair: There is a culture of grievance in some parts of Scotland, and therefore-

Michael Moore: I cannot think what you are referring to.

Q856 Chair: I am sure that you can work that out for yourself. I would have thought it is necessary in these circumstances to clarify what the-

Michael Moore: I think it is an important distinction to make. This is a gross surplus. There are other central costs that are borne on behalf of the whole of the UK through to Scotland.

Q857 Chair: We have asked the Crown Estate to give us an estimate of what they believe the actual figure is once all these central costs are deducted. Therefore, if you speak to them in the near future, perhaps you could hurry them up to get us those figures sooner rather than later.

Miss Smith: I am happy to make that request.

Q858 Graeme Morrice: We did indeed ask that question, but what, in general terms, do you think are the main benefits to the UK of the Crown Estate operating in Scotland?

Miss Smith: If I can offer an initial view of that, then I think it returns to the need to have a well-managed Crown Estate overall, which is the point that we have been making this morning. I think it returns to the themes of local engagement that we have been talking about. I think we have laid out a number of ways in which we hope that is due to improve, and we have contributed to putting in place a number of mechanisms that will do that.

Furthermore, looking ahead to future generations, marine assets have been mentioned, and there is clearly a need to have those well managed for the financial good of the United Kingdom and, within that, through the mechanisms that we have laid out for Scotland. I would also then make a point about our heritage. Much of the Crown Estate includes things that are pleasant for people to be around. That is a much more informal benefit.

Michael Moore: Chloe has set out the key issues. I think that Scotland, as part of the United Kingdom, has offered the Crown Estate investment opportunities through its traditional routes-whether that was in the rural estates or in urban property portfolios-and it clearly now offers a disproportionate potential benefit through marine renewables. Again, by managing it on a UK-wide basis and by being sensitive to the issues in Scotland, I think we can maximise the impact that the Crown Estate has and the revenues that it returns.

Q859 Lindsay Roy: Minister, to the best of your knowledge, does the Crown Estate have a strategic plan for the development of the sea bed?

Miss Smith: I believe it does; I have not seen it. May I refer to my official on that note?

Paula Diggle: Yes, the Crown Estate is very interested and concerned to make best use of its sea-bed resources. It has let three rounds of wind energy leases and a fourth is in preparation, I believe. It is also contributing to the experiment in the Pentland Firth in wave power. It hopes to help the expert developers exploit those two fields. It is looking for sensible opportunities in the way it does so. In the third round, it was careful to ensure that the people who were successful in bidding for leases intended to use them, because the early leases had not all been taken up. It is concerned that the intended development should take place.

Q860 Lindsay Roy: Did they have a strategic plan for the development of the whole of the UK sea bed?

Paula Diggle: Yes, the Scottish part of it is part of the whole UK strategic plan for the sea bed around the UK.

Q861 Lindsay Roy: That conflicts with the evidence we had from the Crown Estate.

Chair: Yes.

Paula Diggle: I am sorry; I am puzzled by that.

Q862 Chair: They told us that they did not have a plan for the management of the sea bed. They had a corporate plan for the maximising of income from it.

Paula Diggle: Perhaps that is what I am talking about. I know that they think very carefully about how they use the resources at their disposal.

Q863 Chair: You can understand why this takes us to the core. There is a distinction between having a plan for maximising income and having a plan for management thereof. That goes to the kernel of the Crown Estate. On a number of occasions they have told us that they cannot really take account of community needs, because the rules under which they operate from the Treasury are all about maximising surplus-admittedly over the longer term-but they are not a charitable organisation. Then commercial confidentiality comes into it. They cannot tell us anything about what they are doing.

Paula Diggle: These aren’t just Treasury rules drawn up on a whim. They are actually in statute, and statute says that they must make a profit and act commercially.

Q864 Chair: No, I think it says a bit more than that. It has been interpreted in a way, and presumably endorsed by the Treasury, that allows them to say that they do not want or need to take account of community needs, because they have a burden placed on them of maximising revenue, admittedly over the long term, and therefore there are investments they can make and so on. However, all of it relates to maximising revenue, so they tell us repeatedly that unless it is involved in maximising revenue they cannot take account of local needs, comments, observations, or the need for local employment, unless it directly affects their bottom line. That is clearly an unsatisfactory position.

Paula Diggle: Can I clarify what they can do? What they do is to use their resources where it makes sense to further the benefits of the local population, insofar as it relates to the land that they let. They cannot take account of wider public- good benefits in the wider area. That is just not something they are able to do under their statute.

Q865 Chair: That’s right. So the question of generating local employment is not something they take into account unless it is to their benefit.

Paula Diggle: Or to the benefit of the property that they manage.

Chair: That’s right, benefit the property.

Miss Smith: If I may, I think the Government’s interest in that is clearly for a broader economic purpose. Some of these details were no doubt gone through when considering the Sovereign Grant Act, for example, about how that benefits the UK purse. The work of the Crown Estate comes into the UK purse which, as we have discussed, then goes back out to communities. I don’t see that as a negative thing, per se. That is clearly something that the Treasury would wish them to succeed at for everyone’s benefit. We would also wish, on a softer note, for them to engage as far as possible within their statute and the extra measures we have been discussing this morning.

Q866 Chair: The issue for us and local communities has been, as you put it, on this softer note. I think that there is a view that the Crown Estate emphasises unduly the maximisation of revenue-which is what they are encouraged to do by the Treasury-without having adequate regard to their position as a major landowner and developer and the impact that has on local communities, fishermen, consultation and the like. That has caused an enormous amount of discontent and unhappiness, of which, no doubt, you are aware, which has essentially triggered this investigation and all the correspondence that came in to Calman.

Q867 Fiona Bruce: Can you tell me, Ministers, what discussions you have had with the Scottish Government following the publication of their position paper in June? Have they outlined to you what management or policy decisions they might do differently if the Crown Estate were devolved?

Michael Moore: The Scottish Government submitted this as part of their six proposals for changing the Scotland Bill and we have had a series of meetings with Ministers at which the proposals have been discussed in the round. It is fair to say that, in the course of that, they have not specified any greater detail about how they would envisage managing or running the Crown Estate were it devolved beyond their proposal for its devolution, which is in the public domain.

Q868 Fiona Bruce: Have you any evidence that local interest would be better represented if the Crown Estate were devolved?

Michael Moore: Not on the basis of what has been proposed to us. We have, of course, some clear statements of intent, but no detail on the way in which it would be managed or run. I think that is clear from the submission.

Q869 Fiona Bruce: Could any steps be taken, including legislation at Westminster, to ensure that, in the event of devolution, the rights and revenues of the Crown Estate would not be centralised-perhaps in Edinburgh? That concern has been raised with us.

Michael Moore: There are currently no proposals from the UK Government to devolve the Crown Estate. Were we to receive additional information that might persuade us to do otherwise, we would share it in the public domain. That has not come forward as yet and, for the reasons that we have been setting out, we think this works as a UK institution, subject to the changes that we are introducing and closer engagement.

As Chloe said, from the new year, we will be holding formal meetings on the Crown Estate to look at what to do in Scotland, and engagement with communities will be part of that process. I share your concern that if we devolved this, we would need robust mechanisms to ensure that we did not simply replace the criticisms that you are hearing as you go round Scotland at the moment with a set of criticisms focused on Edinburgh.

Q870 Chair: When we asked representatives from Marine Scotland, who were representing the Scottish Government, about whether they had any proposals for the urban estate or rural, agricultural estates if they were devolved, they simply said that they would consult about that. That seemed to us to be entirely vacuous. Is there any evidence that they have proposals of any sort to do anything different from that which is being done at the moment with the urban or the agricultural estates?

Michael Moore: Your evidence on Monday was the latest statement from representatives of the Scottish Government, which represents their state of play, so, no, we do not have the detail. As you may recall, in considering all the proposals for devolution, we have said that the starting point is that any request has to be based on a detailed, evidenced case that will maintain the consensus, or establish a consensus, with political parties and others, and that it will not be detrimental either to Scotland or to the rest of the United Kingdom. So far, we are not really even getting past that first bit of the detail.

David Mundell: I have had a number of discussions with the Scottish Government about the Crown Estate. I think it is fair to characterise their position as about criticism of the current situation, but nothing substantive has been put forward about how they would manage it. They just feel they should, in very simple terms.

Chair: Okay, they’ve seen it, so they want it. I think we understand that.

David Mundell: Fiona Bruce makes a very important point, which those of us who represent rural Scotland-including my own constituency-have a very large Crown Estate interest in. Centralising something in Edinburgh is no more attractive than the perception that it is centralised in London.

Q871 Chair: I have often thought that people in Edinburgh are a bad lot, but we will leave that aside. I have been rebuked and told that we should be referring to Holyrood, rather than Edinburgh in general. Would you clarify whether you have had any discussions with the Highlands and Islands local authorities? They have come forward with some fairly positive plans about how some functions of the Crown Estate could be devolved beyond Holyrood, should responsibilities be passed to the Scottish Parliament.

David Mundell: I have met Western Isles council, Orkney Islands council and Shetland Islands council in relation to specific issues. Clearly, they wish the Crown Estate to be more responsive to their specific needs, particularly in relation to issues surrounding renewable energy and the operation of port and marine facilities. My impression from those discussions is that they are looking for the Crown Estate to be more responsive in their interaction. The Secretary of State has already referred to moving forward with the memorandum of understanding, but I did not form the impression that they thought that, simply by the Crown Estate being devolved to the Scottish Government, that would change the position automatically.

Q872 Mr Reid: In your evidence, you said that the UK Government have no plans to devolve the Crown Estate to the Scottish Parliament, but what about devolving powers to local authorities, harbour trusts or community groups, let us say, that have bought their island? Are there any plans, while the Crown Estate remains a UK public body, to devolve power to organisations like that?

Miss Smith: If I may answer from a Treasury perspective, I do not believe there have been formalised plans or proposals made or discussed. Talking from general principles, it would be positive to see such engagement, as we have already described here this morning, but I have not, in my short tenure, seen such plans. May I clarify with Paula whether she has?

Paula Diggle: The Crown Estate has some arrangements in some coastal areas where the harbour authority acts as a head lessee and sub-lets. It is possible that that could be extended, but it is a matter of local negotiation for each case. Is that what you are talking about?

Q873 Mr Reid: Yes, that is right. I will just give an example that we picked up on in evidence where things do not appear to be working very well. On Tiree, an area of the sea bed off the island has been allocated to ScottishPower. The islanders first heard about that when it was officially announced, after there had been a long period of secret negotiations between the Crown Estate, ScottishPower and Marine Scotland. In evidence, even ScottishPower said that they were a bit embarrassed by all the secrecy-they had wanted to make the discussions public-but it was the Crown Estate that told them they could not. I am sure it must be a source of embarrassment that a Spanish-owned power company wants to engage with local people, but a UK public body is telling them they cannot. I am sure you regard that as unsatisfactory, so I wonder what plans there are to improve local engagement.

Paula Diggle: Perhaps I can speculate about what that could be about. I think the use of the sea bed was probably in the most recent round of letting. This was a competition, and they had to be very fair under European law about the way in which they did the competition. The Crown Estate thought very carefully about how it told local people about what was going on, and its legal advice was that it was actually rather restricted in what it could tell them.

Q874 Mr Reid: The Crown Estate went to the EU as well. I have heard the EU blamed for a lot of things.

Chair: Quite rightly.

Mr Reid: Are you saying that it is illegal for local groups like islanders in Tiree to be informed at an early stage that all these negotiations are going on about the use of the sea bed off their island?

Paula Diggle: We would have to look at the detail if you want us to go into that.

Mr Reid: Will you do that and get back to us?

Q875 Chair: This is a key point. I do not doubt that the Crown Estate thought carefully about it, then decided to keep it a secret. The fact that they thought carefully and then decided to keep it a secret, if anything, makes it worse. That is a bias against sharing knowledge with people. The fact that there was a competition taking place about a site off the coast of Tiree surely could have been told to local people without prejudicing the competition itself.

Paula Diggle: But that was public knowledge. It was a public competition.

Mr Reid: No.

Q876 Chair: No. It was public knowledge that there was a competition going on in Scottish waters somewhere, but it was not public knowledge that this site off Tiree was the site that was being discussed.

Paula Diggle: I am really puzzled by that. I will have to look into this.

Chair: So will the local people.

Miss Smith: If I may sum that up to the extent I that am able as the Minister responsible-I have had to refer to my officials because the episode occurred before my time, but we would be happy to look into any outstanding details if that helps the Committee-in the context of the points that we have made this morning across the piece about the desire to engage further with the Crown Estate in the new year between our two Offices, I am sure we can pick up the points you have just made, Mr Chairman.

Q877 Chair: We consistently seem to have the pattern that the Crown Estate and the Treasury are willing to yield only when pressed to do so. They are not proactive at all in seeking to engage, and they constantly hide behind either statute or, in this case, the EU, and unnecessarily so. Can I just take us back to the question of planning? We met Marine Scotland, which told us that it was developing plans for the sea bed. I am not quite clear how the Crown Estate meshed its plans with those of Marine Scotland. It seems that potentially there is an issue when you have two public bodies both drawing up plans for the same area of ground where there is potential for conflict. There is a strong argument for a democratically accountable body to have responsibility, rather than an undemocratic, unaccountable one.

Miss Smith: I would not describe the Crown Estate as unaccountable. It presents its accounts to Parliament, which is a definition of accountability that I would certainly uphold. In relation to Marine Scotland, I understand that you questioned the Crown Estate about that on Monday, and it promised to return to you with correspondence that will help the Committee in its inquiry. I would be happy to raise these issues with the Crown Estate in the new year when we move on to our meetings.

Michael Moore: On the broader point about the Scottish Government agency Marine Scotland interacting with the Crown Estate, that is clearly something that has to work. An entirely legitimate issue is being raised, and, in fairness, the Crown Estate has sought to engage with Marine Scotland, and professionally it is doing so all the time. How that is overseen, either here or in the Scottish Parliament or Scottish Government, is an issue that certainly in the Scottish context has not developed as far as perhaps it might. That is certainly something that we will reflect on from your points and the evidence that you have been taking, and we will look to see how we improve that. The accountability beyond the accounts is clearly important.

Chair: Absolutely. It is key.

Q878 David Mowat: Can I just ask a follow-up about that? It strikes me that the issue is that at the moment the Treasury has the role in Government, so ought there, therefore, to be a formal role for other Government Departments, given the sensitivity of a lot of what the Crown Estate does? It does not sound to me as though that currently exists. For example, your Department would clearly have a more formal role in Scotland.

Michael Moore: You will clearly form a view as a Committee, and we will be interested to see that, on how the Government’s oversight and accountability works. The decision we have taken to have Treasury and Scotland Office Ministers and the Crown Estate meeting twice yearly to consider how they are operating in Scotland is an important development. It is an informal arrangement between Ministers, but it is publicly acknowledged as such. I would hope that that would be sufficiently robust to give you the comfort that a greater degree of interest is being taken.

Q879 David Mowat: Your judgment as Secretary of State would be that you do not feel as though you need a more formal role, then?

Michael Moore: As things stand, no, because I think we have been able to demonstrate a greater level of engagement and cross-departmental working in recent times. I am not suggesting for a minute that we are the sole purveyors of wisdom, however, and clearly the Committee will have a view on that too.

Miss Smith: If I may contribute to that question, clearly the Treasury’s role in relation to the Crown Estate requires working with other Departments. I wish to place on record the fact that, of course, it is not only the Scottish Office, but the other nations and relationships with their devolved Governments. For example, Department for Communities and Local Government: there are a multitude of relationships that are relevant to different parts, which the Treasury endeavours to manage informally.

Q880 David Mowat: As an example-I am thinking on the hoof-the Crown Estate could be administered by a governance board of representatives from a number of Government Departments, including the Scotland Office and the Treasury .

Paula Diggle: I don’t think statute would let that happen, sadly.

The Crown Estate seeks to operate with the grain of Government. It talks to all the relevant Government Departments, exactly as the Minister said, one of which is DECC, so it is always in tune with what energy requirements are.

Q881 Chair: Before we move on to revenues, can I just come back to control? Alan raised a very interesting point about local harbour trusts and community land organisations wanting to have some say. A great deal of the thrust of calls for the Scottish Parliament to have control over the Crown Estate in Scotland has arisen because people want to have control over the foreshore of the local area and the immediately adjacent coastline.

Are you willing to entertain other ways in which local people and local groups can have control over the foreshore-local authorities, community land buy-outs, trust harbours and the like-or is the only way that we can pursue the question of decentralisation handing everything to the Scottish Parliament so that it can have further consultation about further decentralisation? Is there a decentralisation that will come directly from yourselves?

Miss Smith: I would say no, it is not within the Treasury’s powers to hand those out from where we are at present.

Q882 Chair: So whose power is it?

Miss Smith: I was going on to say that, of course, the Crown Estate will do what it is permitted to do by statute, as Paula has referred to throughout. Politically, the UK Government would seek, as we have said, to retain the Crown Estate as a UK-wide organisation, but would, by all means, be open to proposals made and would consider them carefully.

Michael Moore: There are specific instances in recent times. I am thinking of Lerwick and Scrabster where, historically, the right to buy or the ability to buy had been one that was kept in cold storage and the Crown Estate would allow extensions to harbours and charge extra rent for that extension, which didn’t go down particularly well. There has been a welcome, more pragmatic and responsive approach to that, and those are two examples of it.

The question that needs to be balanced is between the local concerns, as manifested in those particular examples-Alan Reid gave the further example of Tiree; I know you will have countless others-on the one hand, and the broader portfolio management responsibilities of the Crown Estate. In terms of whether, piecemeal or in a managed fashion, you would ever contemplate passing over the ownership to these local communities-

Q883 Chair: What about control, and not necessarily ownership? I understand the distinction between ownership and control.

Michael Moore: Unless we have a radical change over the remit in terms of revenue responsibilities and so on, control is closely related to that revenue potential. Is there a model somewhere in between, which allows the Crown Estate to be more responsive and take account of what is happening in local communities, and what the advantages are? That is basically what your inquiry is focused on, and rightly so. I hope that we have given very strong indications of where we want to explore.

Q884 Chair: This comes back to the dichotomy between revenue maximisation on the one hand and public good on the other, where the Treasury and the Crown Estate seem on some occasions to pursue a very narrowly focused revenue maximisation. The particular example that Lindsay has quoted in a number of situations was Lerwick harbour, where the Crown Estate, if I remember correctly, charged the harbour board to dredge materials from the harbour in order to improve it, then charged them to dump the materials that they dredged out somewhere else, thereby taking money off them twice, while the good organisation was actually improving the harbour.

Q885 Lindsay Roy: Indeed. That was to allow cruise liners to come in to bring dividends to the local economy.

Q886 Chair: That doesn’t seem to me to be the work of an organisation that has a broad public good perspective, as I am sure you understand, but we look forward to hearing from you in due course, once we recommend changes.

Q887 Mr Reid: The Coastal Communities Fund was widely welcomed by local groups, but there is concern that the distribution body is the national lottery, which is seen as remote. Also, local groups have experience of applying to the lottery and they say it is a huge amount of effort and that they often get knocked back. First, why was the lottery chosen and, secondly, what are you as a Government going to do to ensure that decisions are taken at a local level, rather than centrally in London?

Miss Smith: There were two key reasons that the Big Lottery Fund was chosen from a process, as you would expect: first, it has a record for delivering with as little bureaucracy as possible in the work that it has done-I am happy to go into some examples which we think have been very positive-and, secondly, it is one of the few organisations that has a UK-wide reach, which is consistent with what we have been saying about that being our desire for the Crown Estate. We are aware of the concerns raised, no doubt about that, but it is important to have that capacity within an organisation. We are aware of some good examples of programmes where it has strongly invested in communities and demonstrated its willingness to do so. I fully hope that it hears what has been said and responds with due sensitivity.

Q888 Mr Reid: One example that was given to us of good practice during evidence was that of the Scottish Land Fund, which was in operation in the last decade under the auspices of the Big Lottery Fund, but the actual decisions for the Highlands and Islands were subcontracted to Highlands and Islands Enterprise. Is that a type of model that could be looked at?

Michael Moore: In the design of the detail, the Treasury hopes that it will be able to make announcements in the not-to-distant future, as all these different models need to be looked at. It is helpful to have that highlighted to us.

Q889 Chair: I think that it is fair to say that we have had quite a lot of criticism of this idea. We welcome the decision that quite a lot of the money would go back into local areas. That is very welcome and we have not heard anyone criticise that. There is haggling over the amounts and so on, because no matter what you provide, people will want more of that. I understand that, but I think that there is a feeling that the lottery is too complex, that it is run by people who are not necessarily representative of the local communities, to put it generously, and that it puts organisations applying in competition with each other. The main point is that there is no form of democratic accountability on the decisions on priorities. You, Michael, are democratically accountable. I think many of the people that we have met would much rather Michael had the money to spend.

Michael Moore: That is the one of the more generous points that you have made, Mr Chairman. It must really be pretty bad. I appreciate the point that you made. In terms of accountability, successive Governments have taken the view that the lottery works in a certain way. It sets out clear criteria and that, again, will be the measure for this allocation across the United Kingdom. There are different committees that work to look at these awards. Clearly, in the design of this, we need to take account of that point, but on the last point that you made, about bidding, it will inevitably have to be on a bid basis, because, as you said, there is a finite pot.

Q890 Chair: Who then decides between them? It is much better to have someone who has a degree of democratic accountability, rather than some gang of the great and the good, who are responsible to nobody. That is the worry. Have you considered having either an amalgam of the local authorities covering the Crown Estates and foreshores, or Highlands and Islands Enterprise together with the local communities doing it? The view that we have heard is that they very much welcome the fact that the money is going back in. They are unhappy, overwhelmingly, if not unanimously, about the mechanism. They want some degree of local accountability and control. It seems that you are missing a potential success here, because the Crown Estate and the Treasury are seen to be unduly remote. If there is an opportunity to see some of the benefits flowing by a mechanism that people can understand, it would be sensible to take it.

Miss Smith: I see that. If I may, I will make a few comments and ask Paula to supply further detail on what else came in through this process. I just want to make a couple of points about the Big Lottery Fund. It is not remote; it has a dedicated Scotland committee, which the Secretary of State just began to refer to; it has accountability, because it will be contracted to distribute funds linked to what I have been describing all morning as a democratically accountable body, the Crown Estate; it will use local advisory panels; and, crucially, Mr Davidson, I believe it has a large office in Glasgow, which might be of interest to you and others around the table.

Q891 Chair: We don’t get much money from it.

Miss Smith: I would not want to take employment from people in your constituency.

Q892 Chair: It gives money to private schools but not to local authority schools in my area, for example, which is why I am unhappy about how these things operate.

Miss Smith: I could not possibly comment on whether you would wish people to be in employment in Glasgow. May I ask Paula to come in on this point?

Paula Diggle: I cannot add to that, I am sorry. That is as far as we can go right now until the next policy statement.

Q893 David Mowat: I know we are out of time, but this is just an observation. This fund, which is 50% of the marine fund, is a hugely beneficial idea for Scotland. If anybody loses out in this it is the rest of the UK, because marine is two thirds of the total Crown Estate income in Scotland. In terms of our previous discussion, giving 50% of that-about £4 million-back to Scotland means that the Crown Estate presumably makes very little out of Scotland. I wonder whether that £4 million is entirely fair to the rest of the country.

Miss Smith: To put figures to that, if it would help, based on the Crown Estate’s marine revenues in 2010-11 the overall fund in 2012 will be worth £23.7 million. You are absolutely right to point to a figure of £4 million for Scotland. That will be broken down as £1.85 million to the Highlands and Islands, and £2.05 million to the rest of Scotland.

Q894 David Mowat: What I am really saying is that as a proportion of the Crown Estate’s operations that is, in a way, a big rebate to Scotland. The rest of the country does not get such a rebate because it is done just on marine, which is massively beneficial to Scotland.

Miss Smith: I would certainly hope the whole operation-

David Mowat: It is a very good-news thing for Scotland. We are where we are, but I would just make that point.

Q895 Fiona Bruce: Could you give us some relevant examples from today of where the Big Lottery Fund is demonstrating local knowledge in terms of coastal communities?

Miss Smith: Certainly. I will start with examples where it is operating in Scotland and focused on communities, and we will go on to the coastal aspects. I am aware of three that I think would be worth the Committee taking an interest in. The first is entitled Growing Community Assets, which seeks to push ownership of assets to communities; the second is Life Transitions, which seeks to support people through projects that help them at key times of change in their own lives and their communities’ lives; and the third is entitled Supporting 21st Century Life. Those are three that the Committee may wish to look into in more detail. As we have been saying throughout, the fund has experience around the UK in coastal and non-coastal areas, and it fully expects to dedicate itself to what we are asking it to do here.

Q896 Chair: You could perhaps give us details of those people-of the great and the good who are going to disburse this money-and a note indicating what experience they have got in the areas that are being looked at.

Michael Moore: There will be an announcement to Parliament as soon as possible, and the detail will be furnished as part of that.

Q897 Chair: That would be helpful. We are drawing matters to a close, because we have held you nine minutes beyond your allotted span. Are there any answers you had prepared for questions that we have not asked, or things you want to get off your chest? Mr McIntosh, you have played an absolute blinder so far.

Michael Moore: I think we have had a fair opportunity to reflect on the issues you are finding as a Committee, and we look forward to your report. If there is any further information that we can provide to you, we will be happy to do so. Otherwise, thank you very much for this opportunity.

Q898 Chair: The final point I want to make is to Miss Smith, and it relates to the Crown Estate’s rule about maximising revenue. Can you have a look to see whether that could be interpreted in a wider, more generous, more publicly responsible way, rather than the relatively narrowly focused income maximisation way in which the Crown Estate has been interpreting it up to now? It would be constructive and helpful if we thought that potential change was there.

Miss Smith: I would be happy to do so.

Chair: Okay. Thank you very much for coming along.

Prepared 19th March 2012