Consultation Response from Islands Council

Background Orkney Islands Council has long recognised the inequity of The ’s current operation in and has lobbied for change. Orkney Islands Council has been particularly critical of the way the marine estate revenues has been managed. The Crown Estate Commissioners have operated under a commercial remit with all associated revenues leaking from the local economy to HM Treasury in London. This has given rise to controversy since insufficient attention has been given to the interests of the local community when reaching decisions in respect of the ownership and use of the sea bed. There has been a democratic deficit with scant accountability to the local community.

The Coastal Communities Fund has brought minimal benefit to Orkney. This Fund is not embodied in statute and therefore can be withdrawn at any time. It rewards communities who do not suffer the disbenefits of deployment and creates a needless dislocation between deployments and the communities hosting them.

Orkney Islands Council has been consistently clear that 100% of Crown Estate revenues should be returned to the communities who host the revenue raising deployments and that the management function for administration of deployments and revenues should reside with the Local Authority as the elected representative of the local community.

Scottish Government has made clear commitments in respect of Crown Estate revenues. The SNP “Manifesto for the Islands” committed to the following: “Ensure island communities receive the full revenues from Crown Estate assets around their shores and have a greater say in how the assets of the Crown

Such revenues will help strengthen our community and are essential to the continued wellbeing of our islands. Social and economic development is fundamental to achieving growth and employment opportunities, particularly in remote, sparsely-populated areas.

These aspirations were well represented in the report of 24 November 2014: “Responsibility for the management of the Crown Estate’s economic assets in Scotland, and the revenue generated from these assets, will be transferred to the . This will include the Crown Estate’s seabed, urban assets, rural estates, mineral and fishing rights, and the Scottish foreshore for which it is responsible. “Following this transfer, responsibility for the management of those assets will be further devolved to local authority areas such as Orkney, Shetland, Na h-Eilean Siar or other areas who seek such responsibilities. It is recommended that the definition of economic assets in coastal waters recognises the foreshore and economic activity such as aquaculture”. The Smith Commission report went through an exhaustive Parliamentary process and Orkney Islands Council is puzzled by the ’s reluctance to implement this ‘double devolution’ principle without further consultation on the second stage of that devolution. Orkney Islands Council is particularly concerned by the Scottish Government’s introduction of a contrived differentiation between Local Authority and Local Community and the statement that Scottish Ministers already favour regional or central decision making. Regional or central decision making is contrary to the findings of the Smith Commission which clearly recommended that, as the fully representative elected body with the powers and capacity to manage Crown Estate assets and revenues, the Local Authority should be the locus for Crown Estate management responsibility.

Consultation Questions Q1: Should the future approach be changed from the duty to manage the assets on a commercial basis?

YES NO □ Don’t know □

Q2: If YES, should there be a power to take account of wider socioeconomic or other benefits?

YES NO □ Don’t know □

Q3: If YES, which assets should be managed on a commercial basis and which should be managed differently? (Please provide details in the space below)

Orkney Islands Council believes that the duty should be changed from one of financial imperative to a duty to take account of wider socioeconomic or other benefits, something akin to a Local authority’s duty to achieve best value. This could be done through a socioeconomic benefit analysis being carried out and, through appropriate consultation, the community interest being respected and supported.

Q4: Should the requirement on ‘good management’ be retained?

YES NO □ Don’t know □

Q5: Should the requirement on ‘good management’ be amended to take account of environmental implications in relation to the management functions?

YES NO □ Don’t know □

“Good management” would be best defined on the basis of sustainable development principles as set out in the National Marine plan, Scottish SD Strategy and the appropriate marine plan. This would provide for balanced decisions taking account of social, economic and environmental factors.

SEA and EIA provisions already provide for environmental implications to be taken account of at the programme/plan stage.

Q6: Should the existing Crown Estate portfolio in Scotland be preserved in its current form? YES □

NO Don’t know □

Orkney Islands Council does not believe that the estate should be preserved in its current form, particularly given that there could be a division between marine and land based assets of varying values. This is particularly the case in Orkney where there are no land based assets.

Q7: Should Scottish Ministers’ approval be required for sizeable sales?

YES NO □ Don’t know □

“Sizeable” would require to be defined as this is not detailed in the consultation document. There should also be appropriate consultation with local authority and community interests in respect of the purpose of any sale.

Q8: Should the existing policy - the general presumption against selling the seabed - be maintained?

YES but management rights should be transferred to Local Authorities. NO □ Don’t know □

Q9: Do you have any other views on how the management of the Crown Estate in Scotland can ensure delivery of the duties in the Scotland Acts 1998 and 2016? (Please provide details in the space below)

Further devolution to Local Authorities, as recommended by the Smith Commission, will ensure delivery of these duties. The principle of aligning the management of the assets with marine planning at the national and regional level would help to deliver these duties.

Q10: How can transparency on the sale and management of the Crown Estate assets be enhanced? (Please provide details in the space below)

The Crown Estate Scotland (Interim Management) Board should comprise members from each geographic area of Scotland to ensure that one representative is drawn from each of the main island groups. Board meetings should be open to the public and Board minutes should be published online. Any proposal to revise the management regime or sell assets should be widely publicised in a way that makes the information accessible to all communities. With full devolution to Local Authorities, transparency will be ensured by the receiving, democratically elected Local Authority. There should be a statutory requirement to consult local authorities on the decision to sell assets within their areas of jurisdiction - as well as any established Marine planning Partnership.

Q11: How can the devolution of the management of the Crown Estate contribute to community empowerment? (Please provide details in the space below)

Further devolution to Local Authorities, as recommended by the Smith Commission, will contribute to community empowerment. . Given that the Interim body will not be subject to the Community Empowerment (Scotland) Act 2015, the Procurement Reform (Scotland) Act 2014 or the forthcoming socioeconomic duty within the Equality Act 2010 but local authorities are, this means that the only mechanism for achieving community empowerment is to devolve the Crown Estate in Scotland to Local Authorities.

Q12: How can the devolution of the management of the Crown Estate contribute to land reform? (Please provide details in the space below)

Local management of these elements will give confidence to prospective community Estates and ensure the maximisation of benefit from Crown Estate assets for the local community.

Q13: How can we further improve alignment with Scottish Ministers’ objectives to deliver on the national outcomes? (Please provide details in the space below)

Marine planning and access to the maritime environment and other national objectives will be more effectively facilitated through management of Crown Estate assets by the relevant Local Authority. Within the Scottish marine regions, it is difficult to envisage how regional marine planning will work effectively without local management of the seabed.

Protection and enhancement of access to the built and natural environment, realisation of full economic potential from Crown Estate assets and strong, resilient communities will all be products of local management of Crown Estate assets.

Q14: Do you have any views on the proposed application of the above principles to guide the long term framework for managing Crown Estate assets? YES □ NO Don’t know □

Yes.

Principle 1 states that “people should be able to influence decisions that affest them and their families”. Principle 2 states that “arrangements should be appropriate and tailored towards the needs and aspirations of people and places”. The devolution of the management of Crown assets to island authorities would greatly enhance the ability of local people to influence important decisions and support the above principles.

Q15: Which of the three proposed options for managing Crown Estate assets in Scotland do you prefer? Option 1 (national) □

Option 2 (local) Orkney Islands Council resists the assertion in the consultation document that, “it is not clear that all Local Authorities or communities would prefer to manage the assets in their area and whether the skills and expertise are currently available at a local level or whether they can be developed in a timely and efficient manner” and, “This option could lead to fragmentation or local competition between different parts of Scotland”.

The Smith Commission was very clear in seeking full devolution to the three Scottish Island Local Authorities, naming them specifically, and the Scottish Government should not now reverse from this commitment. To do would also be contrary to the Lerwick Declaration.

Far from fragmentation taking place, devolution to local authorities will result in cohesive management of the estate, decentralisation, strengthened local democracy, transparency and community empowerment. It would also support better integration with local development planning and regional marine planning.

Option 3 (hybrid) □ Don’t know □ OTHER □

Q16: If OTHER, what approach to management do you propose?

Another option would be for a pilot scheme for the islands authorities followed by full devolution.

N/A.

Q17: Should a geographic or a functional approach guide the reform of the management of the Crown Estate in Scotland?

Geographic Management of all assets should go to the Local Authorities concerned, in line with the Smith Commission findings. Functional □ Don’t know □ Other □ Please Specify: ______

Q18: Do you have a preference for management on a geographic basis being led by either local authorities or communities?

Local authorities Orkney Islands council would challenge the differentiation between local authorities and communities given that local authorities represent communities, and would be the obvious route for engagement with communities, and handling particular requests and discussions with communities about onward devolution beyond local authority level. This is what The Smith Commission recommended. Communities □ Don’t know □

Q19: Should Scottish Ministers have the power to hand responsibility for management of the estate, or parts of it, to a particular person or persons? YES □

NO Local Authorities are the common sense vehicles for the asset management role. Provision for removing the role from Local Authorities in the future will create uncertainty and erode community confidence in the system.

Don’t know □

Q20: Should Scottish Ministers have a power to vary management arrangements held by other parties over time? YES □

NO Don’t know □

Q21: Should Scottish Ministers have the power to extinguish rights currently held in the Crown Estate where management of the asset can be adequately covered by other legislation?

YES Yes, but only where the community interest is not negatively impacted upon or the powers of Local Authorities reduced. NO □ 65

Q22: Do you have any views on which assets should be managed at the (i) national level (ii) by local authorities or (iii) by communities? (Please provide details in the space below)

NATIONAL LEVEL – large scale infrastructure, deployed in the national interest, for example major connections to the UK’s electricity network or large scale commercial Offshore Wind installations. All seabed assets within Scottish marine regions should be managed by adjacent local authorities.

LOCAL AUTHORITY – all Crown Estate deployments not included in NATIONAL above.

COMMUNITY – none since the Local Authority is recognised as the highest expression of the local.

Q23: Should local authorities or communities be expected to make a case for further devolution? YES □

NO Orkney Islands Council is perplexed by the inclusion of this question. The case for further devolution to Local Authorities is already well made in the Smith Commission report and Local Authorities have the proven capability to effectively and safely manage Crown Estate assets and revenues, to maintain service delivery and to maximise the benefits from these assets. Devolution to Local Authorities will ensure democratic accountability and legitimacy for The Crown Estate in Scotland.

The Islands Councils have extensive experience and expertise in regard to the marine environment.

One needs only to look at what Orkney Islands Council have done over the past 40 years in implementing the Orkney County Council Act 1974. This was private legislation designed primarily to address issues arising from the development of the oil industry and the infrastructure in the islands areas to support it, but in practice it is very relevant to tackling the development of aquaculture and other marine developments. The works licences granted by Orkney Islands Council were in many respects far more considered and robust in dealing with the issues than was the work done by the Crown Estate, from which rental agreements had to be sought, and which played what might be described as the planning authority role in areas that were not covered by the local Act. It is worth noting that the Crown Estate very much relied on the work of Orkney Islands Council in granting works licences when it came to issuing its own rental agreements. Indeed, the planning arrangements that were set up to deal with the works were subsequently applied to the rest of Scotland. Orkney and Shetland provided the model for the rest of the country in planning arrangements for the inshore marine environment.

There is both the capacity and the capability within Orkney Islands Council to exercise these powers in a responsible and imaginative way that will bring benefit to our community.

It should also be noted that we have extensive experience in consenting and strategic planning for aquaculture development under the land use planning system since 2007. Furthermore, Orkney and Shetland are leading the way in the development of regional marine planning and governance.

Don’t know □

Q24: If YES, should they demonstrate the capability to ensure appropriate management, to maintain service delivery and to deliver increased benefits? N/A YES □ NO □ Don’t know □

Q25: Replicating functions in each area is likely to lead to fragmentation of the estate which would pose significant risk to realisation of new revenue – how can these risks be avoided? (Please provide details in the space below)

The same functions will be delivered in each area within the constraints of a national framework in much the same way as every Local Authority currently delivers the Planning service without ‘fragmentation’. Orkney Islands council does not accept the argument that ‘fragmentation’ will occur if responsibility is devolved on a geographic basis. Local Authorities should be directly involved in the drawing up of any national framework and the agreement of all Local Authorities to its terms should be a requirement.

Q26: Should shared services be a requirement of devolution to the local level of decision-making on property, rights and interests of the Crown Estate? (Please provide details in the space below)

No. Orkney Islands Council has lobbied for many years for Crown Estate management to be devolved to the Local Authority area.

The introduction of a regional tier of governance takes us back to the days before Local Government reorganisation and will be strongly resisted by Orkney Islands Council. Orkney Islands Council will resist any attempt by the centre or the region to interfere in administrative powers which have been devolved to the Local Authority in line with Smith Commission findings. The Local Authority is best placed to identify and address local need. Collaboration will occur organically and as required between Local Authorities and should not be prescribed in legislation so as to maximise flexibility and responsiveness. Our Islands Our Future is an example of local authorities working collaboratively.

Q27: What are the opportunities, if any, of further devolution? (Please provide details in the space below)

Devolution of the management and administration of all non-National Crown Estate assets and revenues should be made, in full, to Local Authorities, as envisaged by the Smith Commission. Further devolution is therefore considered unnecessary.

Q28: What are the challenges, if any, of further devolution? (Please provide details in the space below)

If the terms of the Smith Commission are honoured, there is no ‘further devolution’ beyond Local Authorities. Local Authorities are already set up, in legal, audit, financial management, project management, community engagement and benefit maximisation terms to handle devolved responsibilities. The risks of devolution to Local Authorities are therefore minimal and manageable. Devolution to a special purpose community vehicle would introduce additional, unquantified risk.

Q29: Is there a need for strategic planning and a long term investment strategy, in order to co-ordinate work to enhance the value of the estate?

YES NO □ Don’t know □

Q30: Do you have any views on the value of a national framework to guide local decision-making? (Please provide details in the space below)

A national framework is required to ensure consistent management terms across all areas and will be particularly important with regard to the lease terms and leasing rates offered to developers. The extent of local management (vis a vis national management) will have to be specified and charging bands and reviews should be set out. There should be no role for Scottish Ministers in local decision making as this goes against the principles of devolution. Scottish Ministers’ approval should only be required for the sale of major assets and Scottish Ministers should have no involvement in the local use of capital or revenue proceeds.

Q31: Should there be consistent charging approaches between areas to avoid competition between different parts of Scotland?

YES NO □ Don’t know □

Q32: Are there any other issues that should be covered by a national framework for management of Crown Estate assets in Scotland? (Please provide details in the space below)

Annual reporting and reversion of assets to the manager if they are not put to the intended purpose within a specified timescale.

Q33: Should the future arrangements in Orkney, Shetland and the Western Isles be considered first?

YES NO □ Don’t know □ Q34: Is a phased approach needed to introduce reforms to the management of Crown Estate assets across Scotland? YES □

NO Don’t know □ 67

Q35: Is there value in a pilot scheme prior to implementing reforms?

YES NO □ Don’t know □

A pilot scheme can help inform the legislation for the longer term management arrangements.

A Pilot Scheme would help inform:

 duties with which managers must comply ;  circumstances where notification to Scottish Ministers (the Interim body) is required;  arrangements for co-operation where more than one manager is involved;  the potential for defining a national structure for setting and reviewing charges for leases etc.  integration between the management of the seabed asset and regional level marine planning

The three Islands Councils are uniquely placed to carry out a Pilot Scheme.

The Councils would work together to share existing experience, develop governance arrangements to avoid conflict of roles, prepare template schemes for other councils desirous of a similar cascade of powers etc for management of their coastal zones. Having the experience to take forward both the regulatory and management role in a co-ordinated fashion, this would add greater value to further devolution proposals and would be of considerable benefit to the Scottish Government.

The governance will require to be clear and transparent to give investors confidence in the whole process. Existing stakeholders should not be any worse off following any change of governance. There are multi-million pound investments in our locality and a key requirement for serious investment is confidence in the abilities of the authorities to deal with a prospective development appropriately and consistently. This consistency would be enhanced through the proposed integrated approach to seabed/foreshore leasing, marine planning policy and consenting at the local level.

It will be important to uphold the obligations to maintain the public right to navigation, including anchorage. Orkney Islands council has long been responsible for large Harbour areas, dealing with navigation issues on a daily basis. The retention of safe anchorages was a material consideration of the works licence process when considering aquaculture developments. The Prospectus states: “Local people are a resource with skills and knowledge that we must respect, nourish and unlock to help deliver shared outcomes. The need to apply local knowledge to the delivery of national policies was never more the case than in the three Island Areas”.

Orkney Islands Council is well versed in the benefits of Pilot Schemes. For example, The Pentland Firth and Orkney Waters Marine Spatial Plan – developed jointly by Orkney Islands Council, The Highland Council and – won the Partnership Working category at the Scottish Awards for Quality in Planning (SAQP).

Q36: How can people influence decisions in relation to the management of the Crown Estate assets? (Please provide details in the space below)

Devolution to Local Authorities will allow genuine local consultation to take place before key decisions are made. Local Authorities are well used to this approach and recent experience with Council Budget community consultation has enabled a good level of citizen engagement. This can be augmented by Marine planning Partnerships and Regional marine Planning.

Q37: How should the long term governance arrangements differ from the interim arrangements? (Please provide details in the space below)

The Island Authorities Pilot Scheme proposal will focus on streamlined consenting and leasing. It will be important that long term arrangements include full devolution of revenues management alongside consenting and leasing so that these revenues can be applied to areas of need identified by the local community and endorsed by its elected representatives.

The prospectus, Empowering Scotland’s Island Communities, stated:

“The Scottish Government recognises that Islands Councils can have a central role in ensuring that community benefit is shared equitably and strategically to communities in their island groups. In such cases, the Islands Councils would each be responsible for administering their own fund, including determining how funds are spent, who would benefit and the level of benefit. The Council would have a strategic role in aligning the distribution of benefit with national and local priorities, securing agreement as required within Community Planning Partnerships to assure the direction of benefit towards communities”.

Q38: Should the future framework include flexibility for Scottish Ministers to vary the proportion of revenue retained by the manager? YES □

NO The Local Authority must be able to recover the full costs of management from Estate revenues and the remaining revenues, in non-national interest situations, should remain in the host community to be reinvested in community development and empowerment projects. Don’t know □

Q39: Should the arrangement where the capital value of one part of the estate can be used to enhance opportunities elsewhere in the estate be continued?

YES NO □ Don’t know □

Q40: Should the current duty of maintaining the value of the estate and the return obtained from it be continued or amended for the investment of capital proceeds? Continue X□ Amend Don’t know □

Yes, it should continue as this is important for the future investment and income generation, but with the ability to vary for exceptional circumstances

Q41: Should capital proceeds from a sale in one area be invested in the same area, or should there be discretion to invest anywhere in Scotland?

Invest in same area □

Discretion to invest anywhere Assessed on the case made by TCE Asset Managers, such as the Local Authorities, in any area. Don’t know □

Q42: Should it be possible for the capital or maintenance requirements for an individual asset to be funded from another part of the estate, even if management of the assets are devolved to the local level?

YES NO □ Don’t know □

Q43: Should funding of strategic activities from Crown Estate resources continue?

YES NO □ Don’t know □

Q44: If YES, should these strategic activities be managed at the national level?

YES Only where these are national interest activities. NO □ Don’t know □

Q45: Should the person taking on the responsibility for management of an asset normally take on the responsibility for managing the associated liabilities?

YES NO □ Don’t know □

It will be important to ascertain what liabilities there presently are.

Q46: Should the liabilities for land restoration and residual liabilities after decommissioning of marine infrastructure be managed: Locally Nationally □ Don’t know □

Q47: Should the costs associated with management of liabilities be included in the overheads for estate management?

YES An Insurance Fund to share risk should be considered. NO □

Don’t know □

Q48: Do you have any other views on the devolution of the management or revenue of the Crown Estate? (Please provide details in the space below)

Management of Crown Estate revenues should be devolved to host communities, represented by their Local Authority, as set out in the Smith Commission report.

Q49: Please tell us about any potential costs or savings that may occur as a result of the proposals, and any increase or reduction in the burden of regulation for any sector. Please be as specific as possible. (Please provide details in the space below)

Management at the local level should be resourced through Estate revenues and the cost of management should not exceed the staffing provision already within The Crown Estate for Scotland. Consenting and leasing can be streamlined and savings realised in that area while an Administration Fee for the disbursement of revenues will cover the resourcing of that area.

Q50: Please tell us about any potential impacts, either positive or negative, you feel any of the proposals contained in this consultation may have on the environment. Please be as specific as possible. (Please provide details in the space below)

None known. The environment will be managed by the local community in the interests of the local community and the people of the islands have demonstrated over many generations that they can sustainably manage their own environment without external interference. The planning and regulatory regime will provide further safeguards in this area.

Q51: Are there any likely impacts the proposals contained in this consultation may have on particular groups of people, with reference to the ‘protected characteristics’ listed above? Please be as specific as possible. (Please provide details in the space below) No. The Local Authority will recruit to, and resource, the asset management process in a way that respects the protected characteristics. This is nothing new for the Local Authority as these protocols are already in place for other service areas.

Q52: Please tell us about any potential impacts upon the privacy of individuals that may arise as a result of any of the proposals contained in this consultation. Please be as specific as possible. (Please provide details in the space below)

None anticipated.