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PURPOSE of REPORT to Apprise the Comhairle of Developments In POLICY AND RESOURCES COMMITTEE: 12 DECEMBER 2018 THE CROWN ESTATE IN SCOTLAND Joint Report by Chief Executive and Director of Development PURPOSE OF REPORT To apprise the Comhairle of developments in relation to The Crown Estate in Scotland and Regional Marine Planning, in particular amendments submitted by the Comhairle to the Crown Estate Bill, progress with the Comhairle’s application to Crown Estate Scotland’s Asset Management Pilot Scheme and the outlook for Regional Marine Planning. COMPETENCE 1.1 There are no legal or equalities constraints to the recommendations being implemented. SUMMARY 2.1 The Crown Estate (Scotland) Bill was unanimously enacted by the Scottish Parliament on 21 November following Stage 3 of the Parliamentary Process. The Comhairle In partnership with Orkney Islands Council, submitted three Amendments to the Bill and these were considered by the Environment, Climate Change and Land Reform Committee. The Crown Estate Act represents a significant step forward in the devolution of the management of Crown Estate assets to island Local Authorities. In many ways, the provisions of the new Act exceed the expectations of the Comhairle and its partners and represent a breakthrough in the long strugg le for Crown Estate reform. 2.2 The Comhairle’s application to Crown Estate Scotland’s Local Asset Management Pilot Scheme, first reported to the October 2018 meeting of the Committee, has been successful at Stage 1 and now progresses into the detailed negotiations of Stage 2. Through the application, the Comhairle proposes local decision making on Crown Estate leases by a Marine Leasing Committee within the Comhairle, informed by a new Outer Hebrides Marine Partnership with a Community Landowner as pilot partner. If successful, roll-out of these (temporary) arrangements will provide valuable learning as the Comhairle seeks to assume long term management of the Outer Hebrides Marine Region (out to 12 nautical miles) through the Crown Estate Act 2.3 At its meeting of 2 October 2018, the Comhairle agreed that Regional Marine Planning powers be sought from Marine Scotland, in terms of powers under the Islands (Scotland) Act 2018. Acquisition of these powers will allow the local community, through a new partnership of local environmental, maritime and economic interests, to plan the sustainable use of seas around the Western Isles to the benefit of island communities. Allied to this, the Comhairle continues to push for all revenues from marine sector activities to be retained in the island economy. These developments represent a marked change from the historic position where the local community was excluded from marine lease decision making and all revenues accruing from marine sector deployments leaked out of the island economy to HM Treasury in Scotland or, latterly, to Scottish Government. RECOMMENDATION 3.1 It is recommended that the Comhairle agrees to note: (a) the enactment of the Crown Estate (Scotland) Bill by the Scottish Parliament; and (b) future prospects for local management of Crown Estate assets and Regional Marine Planning in the Outer Hebrides Marine Region. Contact Officers: Malcolm Burr, Chief Executive John Cunningham, Strategy Manager Allan MacDonald, Solicitor Background Papers: Submission to Crown Estate Scotland Asset Management Pilot Scheme BACKGROUND 4.1 The Crown Estate is a collection of assets throughout the United Kingdom, including foreshore and seabed, owned by Her Majesty in right of the Crown. Up to 2017, these assets were managed by Commissioners on behalf of the Crown under the terms of the Crown Estate Act 1961. On April 2017, management of the assets in Scotland were transferred to Crown Estate Scotland (Interim Management), a new public corporation which operates under a Framework Document drawn up by the Scottish Government. 4.2 Prior to the 2017 transfer, the Comhairle, along with neighbouring Local Authorities, had consistently called for reform of The Crown Estate, principally because seabed leases around the Outer Hebrides were being negotiated and issued with no local consultation and all revenues accruing from these leases were leaking out of the island economy to HM Treasury in London. The Comhairle and its partners have been consistent in their call for local management of Crown Estate assets and retention of all lease revenues locally. 4.3 In 2014, the Smith Commission was set up to explore proposals for further devolution to the Scottish Parliament and pressure from the Comhairle and its partners led to the inclusion of The Crown Estate in Scotland within the Commission’s scope. The recommendations of the Smith Commission were very favourable to the islands, calling for ‘double devolution’ of the management of Crown Estate assets, first to Scottish Ministers and then to “Local Authority areas such as Orkney, Shetland, Na h-Eilean Siar or other areas who seek such responsibilities”. Subsequent assurances from the First Minister on island communities benefitting from 100 percent of the Crown Estate revenues that they raise and having a greater say in how Crown Estate assets are managed further encouraged the island Local Authorities. CROWN ESTATE (SCOTLAND) BILL AMENDMENTS 5.1 The Crown Estate (Scotland) Bill was approved at Stage 3 of the Parliamentary process on 21 November 2018 when Parliament voted unanimously to pass the Bill, which is now The Crown Estate (Scotland) Act. While the provisions of the Bill were already stronger than the Comhairle had expected in terms of its provision for local management of Crown Estate assets, the Comhairle, in partnership with Orkney Islands Council, proposed three Amendments at Stage 3 as detailed below. These Amendments were submitted by Liam McArthur MSP, with two of them supported by Andy Wightman MSP. 5.2 Transfer of Management: The Bill, as drafted, already provided that Scottish Ministers MAY transfer or delegate the management of Crown Estate assets to a Local Authority. This provision implied that transfer or delegation would be discretionary on the part of Ministers and may require the Local Authority requesting transfer or delegation to meet some sort of competency test. The Comhairle’s Amendment sought to oblige Ministers to transfer or delegate management to a Local Authority should the Local Authority request such transfer or delegation. The Amendment was defeated on a vote but it is considered that the Act’s existing provisions are sufficient to allow the Comhairle to assume the management of Crown Estate assets, particularly since the Comhairle will be able to demonstrate competency through its participation in the current Local Asset Management Pilot Scheme. 5.3 Community Benefit: The Bill, as drafted, was silent on Community Benefit and there was resistance in some quarters to the enactment of Community Benefit requirements because of fear it may act as a deterrent to developers seeking to deploy in the island marine regions. Roseanna Cunningham MSP, Cabinet Secretary for Environment, Climate Change and Land Reform, told Parliament that voluntary arrangements securing Community Benefit were already in place and, in light of these assurances, Liam McArthur withdrew his Amendment. Historically, the Crown Estate has been required by the Crown Estate Act 1961 to simply maintain and enhance the value of the assets under its control. The Crown Estate (Scotland) Bill, as drafted, added the provision that future managers MAY also act in a way calculated to further the achievement of sustainable development. The Cabinet Secretary brought a successful Amendment of her own, substituting MUST for MAY in this provision so, if the Comhairle assumes management of these assets, there will be legislative backing for pursuing sustainable development in its wider sense - environmental and socioeconomic - and this is considered to be sufficient. 5.4 Retention of Revenues: The Comhairle has consistently pressed for all net revenues from Crown Estate deployments to be returned to the communities hosting these deployments. This is an argument that has been made, regardless of legislative developments, over many years, even decades. It was always unlikely that the Crown Estate Act would provide for return of all net revenues but an Amendment to that effect was, nevertheless, submitted by the Comhairle and Orkney Islands Council. In debate, the Cabinet Secretary assured Parliament that an interim approach on return of revenues had already been agreed with COSLA and Liam McArthur withdrew his Amendment. The Comhairle will now work with COSLA to strengthen these arrangements and achieve full retention of revenues. 5.5 On balance, although the Amendments submitted did not progress, the Cabinet Secretary’s assurances on the Parliamentary Record, are considered to represent substantive political commitment on the delivery of the Comhairle’s objectives relating to Community Benefit and Retention of Revenues. Without doubt, the new Crown Estate Act is much stronger than it would otherwise have been due to strenuous lobbying from the islands and the submission of Amendments which forced meaningful debate on key aspects. CROWN ESTATE SCOTLAND LOCAL ASSET MANAGEMENT PILOT SCHEME 6.1 It was reported to the October 2018 meeting of the Committee that the Comhairle had made a submission to Crown Estate Scotland’s Local Asset Management Pilot Scheme. It is possible that the enduring level of devolution secured through the Crown Estate Bill, as amended, will supersede the temporary gains secured through the Pilot Scheme but, as the Comhairle awaits
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