The and Scottish Parliament Infor mation C entre l ogos.

SPICe Briefing Scottish 21 November 2016 16/93 Morgan Tatchell-Evans This briefing provides an overview of the forestry sector in . A Forestry Bill is expected to be introduced in the Scottish Parliament in 2017 alongside procedures in the UK Parliament to fully devolve responsibility for forestry. This briefing describes:

 the current and proposed governance arrangements around ,

 the physical extent of Scotland's woodland resource,

 the associated jobs and economic activity,

 the key environmental considerations, and

 the relevant legislative environment.

CONTENTS

EXECUTIVE SUMMARY ...... 4 SCOTLAND’S WOODLAND RESOURCE ...... 5 THE TOTAL AREA OF WOODLAND ...... 5 SPECIES COMPOSITION ...... 7 WOODLAND OWNERSHIP ...... 8 NEW PLANTING ...... 10 RESTOCKING ...... 11 JOBS AND ECONOMIC CONTRIBUTION ...... 11 JOBS SUPPORTED BY FORESTRY ...... 11 FORESTRY’S CONTRIBUTION TO THE ECONOMY ...... 13 ENVIRONMENTAL AND SOCIAL IMPACTS ...... 14 GREENHOUSE GAS EMISSIONS ...... 14 BIOENERGY ...... 16 BIODIVERSITY ...... 18 FLOOD PREVENTION ...... 18 HEALTH AND WELL-BEING ...... 19 BALANCING ENVIRONMENTAL AND SOCIAL IMPACTS ...... 19 COMMUNITY OWNERSHIP AND ENVIRONMENTAL AND SOCIAL OUTCOMES ...... 20 RETRACTED SALE AND LEASE PLANS IN ENGLAND AND SCOTLAND ...... 20 THE POLICY ENVIRONMENT ...... 21 THE SCOTTISH FORESTRY STRATEGY ...... 21 Outcome 1: Improved health and well-being of people and their communities ...... 22 Outcome 2: Competitive and innovative businesses contributing to the growth of the Scottish economy ...... 23 Outcome 3: High quality, robust and adaptable environment ...... 23 THE LAND USE STRATEGY ...... 24 RENEWABLE ENERGY POLICY ...... 25 BIODIVERSITY POLICY ...... 25 PHYSICAL & MENTAL HEALTH POLICY ...... 25 INTERNATIONAL CONVENTIONS AND GUIDELINES ...... 25 FORESTRY STANDARDS AND AGREEMENTS ...... 26 INTERNATIONAL FORESTRY STANDARDS AND AGREEMENTS ...... 26 UK FORESTRY STANDARDS AND AGREEMENTS ...... 26 RELEVANT LEGISLATION ...... 27 ACTS OF PARLIAMENT ...... 27 EU LEGISLATION & STRATEGIES...... 29 FINANCIAL SUPPORT FOR FORESTRY ...... 30 FORESTRY GRANT SCHEME ...... 30 BARRIERS TO UPTAKE OF FORESTRY GRANT SCHEME ...... 31 TAX EXEMPTIONS ...... 32 GOVERNANCE STRUCTURE OF SCOTTISH FORESTRY ...... 32 THE AND ITS SUBSIDIARIES ...... 33 DEVOLUTION OF ...... 35 STAKEHOLDER REACTIONS TO PROPOSED NEW GOVERNANCE ARRANGEMENTS ...... 37 DEVOLUTION OF FORESTRY IN WALES ...... 39 ANNEX 1: GLOSSARY ...... 40 ANNEX 2: SFS INDICATORS CURRENTLY IN USE ...... 41

2 CLIMATE CHANGE...... 41 TIMBER ...... 41 COMMUNITY DEVELOPMENT ...... 41 ACCESS AND HEALTH ...... 41 ENVIRONMENT QUALITY ...... 41 BIODIVERSITY ...... 42 BIBLIOGRAPHY ...... 43 RELATED BRIEFINGS ...... 52

3

EXECUTIVE SUMMARY

 Scotland has a total of 1.44 million hectares of woodland, 33% of which is owned and managed by the Forestry Commission.

 74% of this woodland is populated with conifers, the remainder with broadleaves.

 The forestry sector (including associated wood processing, supply chains and forest- related tourism) has recently been estimated to support around 26,000 jobs, and £954m of gross value added. The sector is particularly important to the rural economy.

 Woodland creation and management can contribute to climate change mitigation, biodiversity, flood management, and health and well-being. Forestry can also have negative environmental impacts under some circumstances.

 The forestry sector is affected directly and indirectly by a number of domestic policy frameworks, such as the Scottish Forestry Strategy (which is due for review), the Land Use Strategy and the Biodiversity Strategy.

 Delivery of Scottish forestry policy is currently the responsibility of Forestry Commission Scotland, part of the Forestry Commission, which is itself a non-ministerial department of the UK government. However, the power to direct the activities of the Forestry Commissioners as they relate to Scotland is devolved to the Scottish Ministers. Forestry Commission Scotland effectively acts as part of the 's Environment and Forestry Directorate.

 In August 2016 the Scottish Government published a consultation document proposing a new bill to formalise the devolution of forestry. The document proposed the creation of a new Forestry Department within the Environment and Forestry Directorate. This department would take over the duties of Forestry Commission Scotland. The bill was included in the Programme for Government 2016-17, and is expected to be introduced in parliament in 2017.

4 SCOTLAND’S WOODLAND RESOURCE

THE TOTAL AREA OF WOODLAND

Scotland has 1.44 million hectares (m ha) of woodland1, accounting for 18% of the total land area (Forestry Commission 2016a). This is far less than the EU average of 40% (European Commission 2011), but greater than elsewhere in the UK. Scotland’s woodland area rose throughout the 20th century, from 0.35m ha in 1905 to 1.28m ha in 1995-99 (Forestry Commission 2016a). This more than threefold rise was driven by the work of the Forestry Commission (FC), which was established in 1919 with the purpose of developing the woodland resource across the UK (Forestry Commission 2015a). This was achieved both by purchasing and foresting its own land, and by providing grants to private landowners to incentivise afforestation. Since 1995-99, the woodland area has increased by a further 12%. Figure 1 shows the change in woodland area from 1905 to 2016.

Figure 1: Total woodland area of Scotland from 1905 to 2016.

1600 20

1400 18 16 1200 14 1000 12 Area (000 ha) 800 10 8 600 Percentage of total land 6 400 area (%) 4

Woodland Area WoodlandArea (000 ha) 200 2

0 0 Percentage Percentage oftotal land area (%)

Year

Source: Forestry Commission (2016a)

Figures 2 and 3 show maps of the distribution of woodland in Scotland as of 2011, broken down by ownership and broad species group, respectively. Much of the woodland exists in areas of low population density, as can be seen by comparing Figures 2 and 3 with the map of population density shown in Figure 42.

1 This document uses the definition of woodland used in the Forestry Commission’s (2016a) ‘Forestry Statistics’ releases. Woodland is ‘land under stands of trees with a canopy cover of at least 20% or having the potential to achieve this’. A plot of woodland may include some areas of open space, and felled areas which are awaiting restocking. 2 Note that Figures 2-4 do not include . Shetland has around 40 hectares of woodland (Patterson et al 2014a), and has a population density of less than 100 people per km2 National Records of Scotland (2016).

5

Figure 2: Distribution of woodland area, Figure 3: Distribution of woodland area, Figure 4: Population density by local divided by ownership divided by species group council area

FCS Broadleaved, or mostly broadleaved Population density (people per km2) Conifer, or mostly conifer Less than 100 Other 100 to less than 500 Source: Adapted from Forestry Source: Adapted from Forestry Commission (2013) Commission (2013) 500 to less than 1,000 1,000 or more

Source: Data from the 2011 census, amended from National Records of Scotland (2016).

SPECIES COMPOSITION

Conifers account for 74% of Scotland’s woodland area, with the remainder accounted for by broadleaved species (Forestry Commission 2016a). Individual woodlands often comprise a mixture of conifers and broadleaves. A more detailed breakdown of the specific tree species present in Scottish woodland is given in Figures 6 and 7.

The most common tree species grown in productive woodland in Scotland is Sitka spruce, which is a conifer not native to Scotland (Moore 2011). This species is favoured because of its fast growth and ability to produce long, straight trunks which are suitable for a variety of uses such as structural timber, pallets, fencing and panel products. Other conifers are also used in productive forestry, notably the native Scots pine. Softwoods (woods derived from conifers) accounted around 98.7% of Scottish wood production in 2015 (Forestry Commission 2016).

Most broadleaved woodland in Scotland is not managed for timber production, with contributions to biodiversity, accessibility of green spaces and the provision of environments for hunting being prioritised (John Clegg Consulting Ltd 2016). These management priorities tend not to produce trees which are suitable for timber production, although material from these trees is increasingly used in generation of heat. Forestry Commission Scotland (FCS) (2015a) is actively promoting timber production from broadleaved species, with rates of productive broadleaved woodland creation having increased significantly in the past ten years. The key barriers to increasing hardwood timber production are the dedicated management required to produce high quality timber, and the lack of specialised infrastructure for hardwood processing (Forest Research 2012).

Figure 5: Breakdown of Scottish woodland by species group

26%

Broadleaves Conifers

74%

Source: Forestry Commission (2016a)

Figure 6: Breakdown of conifer species Figure 7: Breakdown of broadleaved by area (000 ha) species by area (000 ha)

Birch Sitka spruce Scots pine Sycamore Lodgepole pine Alder Ash Beech Norway spruce Hawthorn Corsican pine Hazel Other conifers Other broadleaves

0 200 400 600 0 25 50 75 100 125

Source: Forestry Commission (2016a) Source: Forestry Commission (2016a)

WOODLAND OWNERSHIP

Around a third of the Scottish woodland area is currently owned and managed by the FC (Forestry Commission 2016a). The FC’s total Scottish land resource, known as the National Forest Estate, is over 640,000 hectares (Scottish Government, 2016a). However, not all of the estate is woodland. As shown in Figure 11, the total woodland area of the National Forest Estate fell from 497,000 hectares in 1998 to 447,000 hectares in 2009, and is now 471,000 hectares. The fluctuations result from disposals and acquisitions of land undertaken as part of FCS’s re-positioning programme (Forestry Commission Scotland 2016a). This programme seeks to enable FCS to ensure that the land forming the National Forest Estate is suited to achieving the objectives of the Scottish Forestry Strategy. Between 1999 and 2016, the re- positioning programme yielded a net profit of £59.3m.

Figure 8 show the breakdown of the present woodland area by ownership and broad species group. The official data available on current ownership is limited to specifying which woodland is managed by the FC. The most recent detailed investigation of ownership patterns undertaken by the FC (2001a) was based on data collected in 1995. This study found that 94.5% of Scottish woodland outside the National Forest Estate was in private ownership, with the remainder shared between charities, local authorities and other public bodies.

A more recent study published by the Forest Policy Group (Wightman 2012) estimated that 91% of woodland outside of the National Forest Estate was owned by landed estates and investment owners, and that 97% was in private ownership. This study also found a much more concentrated pattern of ownership in Scotland than elsewhere in Europe, with much woodland owned by people living outside of Scotland. The study was carried out by investigating the ownership of a small sample of Scotland’s total woodland area. The author recommends that better data collection on ownership of woodland would help to inform policy development, and notes that most other European countries do collect such data.

8

Figure 8: Breakdown of Scottish woodland Figure 9: Breakdown of National Forest by ownership Estate woodland by species group

8%

33% FCS Broadleaves Other Conifers 67% 92%

Source: Forestry Commission (2016a) Source: Forestry Commission (2016a)

Figure 10: Breakdown of non-National Forest Estate woodland by species group

35% Broadleaves

65% Conifers

Source: Forestry Commission (2016a)

Figure 11. Changes in total area of National Forest Estate woodland over time

600

500

400

300

200

100 Area Area ofForestry Commission

Scotland ownedwoodland (000 ha) 0

2010 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2016 1998 Source: Forestry Commission 2001b, 2006, 2011a, 2016a

NEW PLANTING

The rates of planting of new woodland in Scotland since 2006 are shown in Figure 12. Planting rates averaged 8,000 hectares per annum between 2011-12 and 2014-15 (Forestry Commission 2016a). In 2015-16 the rate fell to 4,600 hectares per annum, which was likely due to uncertainty around the change to a new cycle of the Forestry Grant Scheme. The Scottish Government has a target of averaging 10,000 ha per year of new woodland creation from 2015 onwards, which is yet to be met. This includes all woodland creation, i.e. both within and without the National Forest Estate. The target was included in both the first and second reports on proposals and policies for meeting emissions reduction targets, commonly referred to as RPP1 and RPP2, respectively (Scottish Government 2011a, 2013a).

Scotland’s third national planning framework, NPF3, affirmed the 10,000 hectares per annum target as being appropriate up to 2025 (Scottish Government 2014b). The need for further woodland expansion in the 2020s will be assessed in future reviews, with a view to ensuring emissions reduction targets and wider land use objectives can be met.

Between 2011 and 2016, 31% of new planting was with conifer species, the remainder with broadleaves. New planting takes place largely outside of the National Forest Estate.

Figure 12. New woodland planting rates in Scotland

10,000

9,000 8,000 7,000 6,000 5,000 Conifer 4,000 Broadleaved 3,000 Total 2,000

1,000 Area ofArea planting new (hectares) 0

Source: Forestry Commission 2016a

Figure 13 shows the rates of new planting across the UK since 1976. The fall in planting rates post-1989 followed the introduction of the Finance Act 1988, which made changes to the tax benefits granted to forest owners across the UK (Forestry Commission 2016a).

10 Figure 13. New planting in the UK, 1976-2016

Source: Forestry Commission 2016a

RESTOCKING

7,800 ha of previously harvested woodland were restocked in 2015-16 (Forestry Commission 2016a). The National Forest Inventory has noted that restocking in Scotland between 2006 and 2015 totalled 79,100 ha, which was significantly lower than the 135,300 ha harvested during this period (Ditchburn et al. 2016). The shortfall is attributed to a combination of factors:

 The time lag between felling and restocking (typically 2 to 5 years, possibly increasing),  Under-reporting of restocking, and  Failure to restock harvested areas.

Under-reporting of restocking is thought to be significant, due to changes in grant aid, with grants no longer available for restocking of Sitka spruce. Monitoring of grant provision is the key method for monitoring of restocking. This highlights a deficiency in the data collection, which makes assessment of the extent of failure to restock felled areas difficult.

JOBS AND ECONOMIC CONTRIBUTION

JOBS SUPPORTED BY FORESTRY

A recent report by CJC Consulting (2015), commissioned by FCS, estimated that there were 12,143 full-time equivalent (FTE) jobs within the Scottish forestry and wood processing sectors3, as well as 7,412 FTE jobs in the associated supply chain4. In addition, the tourism revenue generated by the sector was estimated to support 6,312 FTE jobs. This suggests that a total of around 26,000 jobs are supported by the Scottish forestry sector. This analysis was based on data from the 2012/13 accounting year, and the results are shown in Table 1.

3 For a full list of the employment types included, see those listed in Table 1. 4 Here, the supply chain refers to goods and services purchased by the organisations undertaking the activities listed in Table 1, where those goods and services are provided by organisations outside of the forestry and wood processing sectors. For example, this would include sales of vehicles to timber haulage firms.

11 Since there were around 1,932,000 FTE jobs in Scotland in 2012 (ONS 2013, assuming two part-time jobs are equal to 1 FTE), this implies that around 1.3% of jobs in Scotland are dependent on the forestry sector.

The report also estimated that there were 2,260 jobs related to deer/game management and sport shooting in woodland. However, it was noted that adding this figure to the 26,000 already mentioned could result in some double counting.

As shown in Figures 2 to 4, the majority of Scottish woodland is in rural areas. This suggests that the forestry sector’s contribution to employment is likely to be particularly important in rural areas, although official statistics do not show this specifically.

Table 1: Estimates of employment and Gross Value Added (GVA) dependent on the forestry sector, including its supply chain, in 2012/13.

Direct Direct + Total Activity employment supply chain GVA (FTEs) (FTEs) (£m) Forestry Commission (including Forest Research) 1224 2093 98.2 Forest/woodland owner/lessee 995 1719 68.8 Forest management (incl. ground prep., fencing, planting, nurseries etc.) 1701 2926 92.8 Harvesting, sales of wood and timber 1268 2029 61.3 Misc. self-employment (planting, managing, harvesting) 1000 1500 60 Land agents, consultancy, advice, legal 121 182 11.4 Haulage/transport 810 1223 49.4 Saw milling, production of pallet slats, fencing posts 2227 3474 146.9 Production of wood panels, board and pulp and paper 1126 1757 74.3 Production of chips, pellets 472 736 31.1 Recreation and tourism 424 551 14.1 Education, training and research 80 112 4.9 Environmental protection/conservation 117 211 10.4 Civil engineering 230 484 24 Local authorities 182 309 13.8 Other 166 249 10 Total 12143 19555 771 Source: CJC Consulting (2015) Note: This table does not include jobs and GVA attributable to forestry-related tourism or sport shooting.

12 Figure 14: Estimated direct employment (FTE) figures for the forestry sector.

Forestry management, harvesting, planting etc.

Saw milling, production of pallet slats, fencing posts Production of wood panels, board and pulp and paper Haulage/transport

Production of chips, pellets

Recreation and tourism

Other

0 1000 2000 3000 4000 5000

Source: Adapted from CJC Consulting (2015) Note: ‘Forestry management, harvesting, planting etc.’ includes activities from the first 4 rows of Table 1. This Figure does not include jobs created in the supply chain, or in forestry-related tourism or sport shooting.

FORESTRY’S CONTRIBUTION TO THE ECONOMY

CJC Consulting (2015) also estimated the forestry sector’s contribution to Gross Value Added (GVA). The GVA associated with forestry and wood processing was estimated as £771m per annum. This includes GVA relating directly to forestry and wood processing, as well as activity in the respective supply chain3. In addition, the GVA attributable to tourism and recreational activity directly associated with forests was estimated as £183m. This takes the total GVA attributable to Scottish forestry to £954m per annum, and again relates to data from the 2012/13 accounting year. For comparison, the total GVA of Scotland in 2012 was £106 billion (Office for National Statistics 2014), indicating that the forestry sector contributed around 0.9% of the national total. An estimate of the GVA attributable to deer/game management dependent on forestry was also undertaken, giving £68m per annum. However, it was noted that some double counting could occur in adding this figure to the £954m per annum already attributed to the sector.

It is difficult to determine how employment and economic output attributable to the forestry sector has changed over time, due to different methods having been used in previous studies. For example, an estimate carried out by FCS in 2004 attributed £668m of GVA to the sector, again including the supply chain and associated tourism (Forestry Commission Scotland 2009). This suggests a 43% rise from 2004 to 2012/13. The authors of the more recent study attribute the difference primarily to the more “comprehensive and robust” data which they were able to obtain, whilst also noting the impact of inflation, and the increase in planted area between the periods investigated in the two studies. The 47% increase in Scottish softwood removals5 between 2005 and 2014, reported by the Forestry Commission (2015b) and shown in Figure 15, would also tend to suggest a genuine increase in GVA.

5 ‘Removals’ refers to the quantity of wood harvested, expressed in green tonnes i.e. weight at the point of harvest.

13 Figure 15: Changes in Scottish softwood removals from 2005 to 2014

8000

7000

6000

5000

4000

3000 cubic metres) 2000

1000 Scottish softwoodremovals (000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Forestry Commission (2015b)

ENVIRONMENTAL AND SOCIAL IMPACTS

GREENHOUSE GAS EMISSIONS

Trees absorb carbon dioxide (CO2) and store the carbon as organic matter, such that they act as negative emitters of greenhouse gases (GHGs). A typical northern British woodland housing Sitka spruce on a 40-year rotation absorbs CO2 at a rate of around 14 tonnes per ha per annum, taken as an average over its lifetime (Jarvis et al. 2009). However, the net annual absorption depends strongly on the age of the trees, and can be significantly impaired by poor management practices, since ground disturbance can lead to release of carbon stored in soils. Absorption also varies between species.

Afforestation has been shown to be a cost-effective method of climate change mitigation, although results of cost benefit analyses vary strongly with geographical location, partly as a result of variation in land value (Valatin & Price 2013, IPCC 2014). In 2014 the Scottish forestry sector acted as a net emissions sink, absorbing 10.2 mega tonnes of CO2 equivalent b (MtCO2e) (Scottish Government 2016 ). This represents 21.8% of the total net GHG emissions of Scotland during the same year. The net absorption rose from 8.8 MtCO2e in 1990 to 10.4 MtCO2e in 1999, and has since remained fairly constant, as shown in Figure 16.

14 Figure 16: GHG emissions absorption attributable to the Scottish Forestry Sector (MtCO2e)

12

e) 2 10

8

6

4

2 GHG Emissions Removed by the Scottish Forestry Scottish Forestry Sector (MtCO 0

Source: Adapted from Scottish Government (2016b)

Absorption of carbon by Scottish forests is likely to fall over the next 15 years due to the relatively low planting rates of the past 25 years, with much of the current stock reaching maturity (and hence due to be harvested) in the coming decades (Forestry Commission 2012). A study undertaken for the Centre for Ecology and Hydrology predicted that, for a low emissions scenario in which afforestation rates rose to 10,000 ha per annum by 2020, the net absorption of CO2 would fall to 0.9 MtCO2e per annum by 2029 (Malcolm et al. 2013). The sector would then fluctuate between being a net emitter of 1.9 MtCO2e and a net absorber of 3.8 MtCO2e per annum up to 2050. A business as usual (BAU) scenario in which afforestation was maintained at the 2010 rate of 2718 ha per annum was predicted to increase the tendency towards positive emissions. The results of the study are shown in Figure 176.

Figure 17: Projected net GHG emissions from Scottish forests.

4

2

0 1990 2000 2010 2020 2030 2040 2050 -2 Low emissions -4 projection BAU -6

sector sector (MtCO2e) -8

fromthe Scottish forestry -10 Projected Projected netGHG emissions -12 Source: Adapted from Malcolm et al. 2013 Note: Negative values signify a net removal of GHGs from the atmosphere.

6 Note that the methodology used to estimate net emissions from forestry have changed since these projections were made, which accounts for the discrepancy between emissions attributed to historical emissions shown in Figures 16 and 17 (Scottish Government 2015a).

15

The projections shown in Figure 17 assume that the carbon contained in any harvested timber is emitted to the atmosphere as CO2. A separate estimate is made of emissions associated with harvested wood products, which is shown in Figure 18 (Malcolm et al. 2013). The positive emissions attributed to removal of timber from Scottish forests in Figure 17 appear as negative emissions in Figure 18, reflecting transfer of stored carbon from the forest to the harvested wood product. Positive emissions are attributed to harvested wood products at their projected time of disposal.

Figure 18: Projected net GHG emissions from wood products harvested from Scottish forests.

2

1

0 1990 2000 2010 2020 2030 2040 2050 Low -1 emissions projection -2 BAU -3

-4 Scottish forests (MtCO2e)

woodproductsharvested from -5 Projected Projected netGHG emissions from -6

Source: Adapted from Malcolm et al. 2013 Note: Negative values signify a net removal of GHGs from the atmosphere).

In addition to the carbon stored in wood products, the use of timber in construction is associated with reduced GHG emissions due to the avoidance of emissions incurred in the production of alternatives such as steel and concrete (Gustavsson & Sathre 2006, Suttie et al. 2009). The Committee on Climate Change’s Bioenergy review (2011) highlighted the use of timber in construction as the best use of timber in terms of reducing GHG emissions. However, there are barriers to the expanded use of wood products in construction, particularly a lack of experience with and understanding of these products within the construction industry (Suttie et al. 2009).

BIOENERGY

The use of biomass in generation of heat and electricity can result in reductions in GHG emissions by replacing the use of fossil fuels, which generally have higher emissions (European Commission 2014). In simple terms the use of crops to produce energy can be thought of as carbon neutral, with the CO2 released during combustion being offset by CO2 absorbed during growth. In practice though there is a net emission of GHGs due to associated activities such as transport and processing. There is also a time lag between emission of CO2 during combustion and reabsorption of the same quantity of CO2 during regrowth. The net emissions vary greatly between schemes, with the EU considering the achievement of 70% savings in comparison with fossil fuels as good practice.

16 Scotland had 127 MW of biomass electricity generation capacity as of 2015 (Department for Business, Energy & Industrial Strategy 2016a). Assuming a load factor of 87.2%7, this suggests that Scottish electricity generation from plant biomass is around 970 gigaWatt hours per year (GWh/year). However, much of the wood used in this generation is likely to have been imported. Across the UK, only 34% of wood used in electricity generation was produced domestically as of 2015 (Department for Business, Energy & Industrial Strategy 2016b). Assuming 34% of Scottish biomass electricity generation uses fuel produced in Scotland, this would imply generation of around 330 GWh of electricity from Scottish biomass in 2015. Total electricity consumption in Scotland in 20148 was 25,510 GWh (Department for Business, Energy & Industrial Strategy 2016a); hence domestically produced biomass is likely to account for around 1.3% of electricity consumption, ignoring imports and exports of electricity. The total extent of renewable electricity generation in Scotland in 2015 was equal to 56.7% of Scotland’s electricity consumption (Scottish Government 2016c).

There were estimated to be 3,906 wood-fuelled boilers in Scotland by the end of 2014, with a total of 2,744 GWh of heat being generated from wood in 2014 (Forestry Commission Scotland 2016b). This amounts to around 3.5% of total non-electrical heat demand in Scotland in 2014 (Scottish Government 2016b). A recent survey from Forestry Commission Scotland (2016b) found that the majority (53%) of the fuel used in these boilers is consumed at large wood processing plants. Here, onsite waste material such as offcuts and sander dust is supplemented with timber as and when required. No data is currently collected on the relative importance of these sources. Recycled wood fibre is accounted for separately, and makes up 42% of Scottish wood fuel usage.

The total annual GHG emissions saving associated with wood-fuelled boilers in Scotland in b 2015 was estimated at 0.89 MtCO2e (Forestry Commission Scotland 2016 ). This estimate attributed no emissions to the burning or production of the fuel, i.e. the fuel was assumed to be carbon neutral. The saving was calculated by identifying the fuel likely to have been replaced in each installation, and calculating the emissions which would have been incurred in the use of this fuel.

Biomass provided 90% of Scotland’s renewable heat in 2013 (Forestry Commission Scotland 2016c). 84% of the total woodfuel consumption in 2014 was attributed to boilers with heat capacities in excess of 1000 kiloWatt (kW), despite such boilers accounting for only 1% of the total number of boilers (Forestry Commission Scotland 2016b). The number of smaller wood- fuelled boilers (with heat capacities less than 200 kW) increased by 163% from 2013 to 2014.

A report from the Energy Saving Trust (2013) estimated that, by 2020, 4,558 GWh of renewable heat could be generated in Scotland each year, based on an analysis of projects under construction or in the planning stages. This estimate did not consider the availability of fuel. A report by the Wood Fuel Task Force (2011) sought to estimate the potential availability of wood fuel to 2020, making the following conclusions:

 The availability of recycled and waste wood could prove to be a limiting factor in achieving the Scottish government’s targets for renewable heat, depending on the extent to which wood was also used to generate electricity.

 The potential for Scottish wood to be diverted to large biomass plants in England could put further pressure on targets.

7 The load factor is the actual electricity generation as a proportion of that which would be generated if the existing plant ran at full capacity throughout the year. 87.2% is consistent with plant biomass in the UK as a whole (Department for Business, Energy & Industrial Strategy 2016b). 8 Statistics for 2015 are not yet available

17  There is no capacity for a significant expansion of electricity generation from Scottish domestic wood sources.

The results suggest that significant expansion of biomass production would require the growth of dedicated energy crops. Forestry Commission Scotland (2016d) is currently undertaking trials investigating growth of short rotation coppice and other short rotation trees to determine the potential of this approach. It is estimated that the extent of land in Scotland suitable for producing these crops is between 19,000 and 90,000 ha (AEA 2007). Estimates of heat generation from UK energy crops typically range from around 32-63 MWh/ha per annum, although yields can vary greatly between sites (Biomass Energy Centre 2011, Hillier et al. 2009). This implies a potential total output of 608 to 5,670 MWh per year, assuming all of the suitable land could be used. Note that research conducted for FCS concluded that, if GHG emissions reductions are prioritised, the best use of the available wood resource in Scotland is to use only sawmill offcuts, bark and branchwood as bioenergy, reserving all other harvested wood as material for construction (Matthews et al. 2012).

BIODIVERSITY

During the 20th century, some woodland expansion took place in areas of importance for biodiversity, such as some grasslands and peatlands, which had a negative impact on biodiversity (Patterson et al. 2014b, RSPB 2008, Bruneau & Johnson 2014, Gilbert 2013, Bain et al. 2011). The conversion of some ancient woodlands to commercial conifer plantations was similarly damaging, since ancient woodlands are more supportive to biodiversity than recently planted woodland (Brockerhoff et al. 2008). This led to resistance to afforestation from environmental groups. However, woodland of all kinds generally offers greater support for biodiversity than other economically productive land uses, such as agriculture (Brockerhoff et al. 2008).

Sitka spruce-dominated woodland is often seen as unfavourable to biodiversity since it can shade out the understorey and ground flora (Forestry Commission 2016b, Patterson et al. 2014b). However, the FC’s Biodiversity Assessment Project, set up in 1995, found that all types of UK woodland supported biodiversity to a similar degree, with different tree species being favourable for different groups (Humphrey et al. 2003).

Various management practices can be used to enhance woodland biodiversity (Brockerhoff et al. 2008, Humphrey et al. 2003). For example, including a range of tree species enables woodland to support a greater range of species, whilst woodlands with narrow spacing of trees and short rotation lengths provide limited support for biodiversity.

Native woodland was recently estimated to cover an area of 0.32m ha in Scotland, 46% of which was said to be in “satisfactory condition for biodiversity” (Patterson et al. 2014b). Ancient woodlands cover around 0.12m ha in Scotland, 40% of which is in satisfactory condition for biodiversity. There is some evidence that the extent of native and ancient woodlands in Scotland has declined in recent decades, although deficiencies in past survey methodologies make this difficult to define.

FLOOD PREVENTION

The average cost of flooding in Scotland has recently been estimated at £280m per annum, and is likely to increase significantly in the coming decades (Sayers et al. 2015). Bodies such as Confor (2015) (an organisation the forestry sector), The Woodland Trust (2015) and the WWF (2007) have all proposed that tree planting be made a key component of efforts to mitigate against flooding.

18 The Read Report reviewed the literature relating to the potential for tree planting to contribute to the prevention of flooding events (Handley & Gill 2009). The authors concluded that, whilst there is “very limited evidence” that increased planting can significantly reduce flooding at the catchment area scale9, there are instances in which careful location of planting can have a positive impact on more local scales, such as:

 planting of woodland buffers to improve infiltration of water into highly compacted soils such as those in upland pastures and colliery spoil,

 tree planting at stream banks to lengthen local peak flow response times, and

 planting on flood plains to slow flood progression.

Guidance from the Scottish Government (2011b) has made reference to the potential to use the planting of vegetation in helping to manage flood risks, whilst noting that “the state of knowledge on these natural techniques is still evolving”.

HEALTH AND WELL-BEING

There is a wealth of evidence showing that incorporating green space into urban areas has a range of mental health benefits for local residents, and that visits to green spaces are beneficial to mental health (Pretty et al. 2007, Haluza et al. 2014). There is also a growing body of evidence showing that the accessibility and attractiveness of green spaces affects the frequency with which people undertake outdoor physical activity (Thompson 2013).

The research into the relative benefits of different kinds of green spaces is too limited to show whether there are any specific benefits in accessibility of woodland when compared with other kinds of green spaces (Shanahan 2015), although there is evidence that the presence of trees in residential areas, even in small numbers, can provide health benefits (Williams et al. 2013). However, there is also evidence that high concentrations of trees which limit views can have a negative impact on the perceived safety of a green space, which can deter people from making use of these environments (Williams et al. 2013).

BALANCING ENVIRONMENTAL AND SOCIAL IMPACTS

The information presented in the preceding sections demonstrates the various environmental and social impacts of woodland creation and management. These impacts are in addition to implications for jobs and the economy, as discussed earlier in this document. It follows that the locations selected for future woodland expansion, the species planted and the management techniques used are likely to depend strongly on the priorities established in the decision making processes.

A recent study (Bateman et al. 2014) forming part of the UK National Ecosystem Assessment predicted that planting decisions which considered the societal value of woodland would be vastly different from planting decisions based purely on the predicted market value of the resultant woodland. The key differences induced by the consideration of societal value were increased planting near to cities (due to the value of recreation opportunities provided), and conversion of areas of high livestock intensity to forestry (due to the value of GHG emissions reductions) (Bateman et al. 2014). Conversely, the ‘economic value only’ decision procedure

9 A catchment is an area within which surface runoff ultimately drains into a single river or reservoir (European Environment Agency, undated).

19 led to considerable conversion of grassland to high intensity livestock grazing, which would negatively impact bio-diversity and increase GHG emissions.

The Read Report also noted that the environmental benefits of forests are “not typically rewarded by the market”, concluding that financial incentives are therefore required to induce forest management practices which are efficient in the “broad economic sense” (Snowdon 2009).

In addition, other policy objectives, particularly those relating to land use, can compete with the factors discussed above. For example, efforts to increase afforestation to reduce Scotland’s net GHG emissions could reduce the land available for other kinds of habitats required to meet biodiversity objectives. Also, policy initiatives to drive housebuilding can increase the demand for wood products, making productive woodland creation more attractive (Independent Panel on Forestry 2012).

COMMUNITY OWNERSHIP AND ENVIRONMENTAL AND SOCIAL OUTCOMES

The Land Reform Review Group (2014) note that the National Forest Estate plays a key role in delivering forestry objectives which are in the public interest. The group recommends a more ambitious programme of land acquisitions by FCS, whilst making more of the National Forest Estate available to community groups and other small scale owners. The group also notes that public finances may restrict such action.

A study by Forest Research (the FC’s research service) found that although the evidence base around the benefits of community forestry was limited, generally there were indications that such projects tended to have positive outcomes such as tree planting, increased visits to woodland, increased exercise and job creation (Lawrence & Ambrose-Oji 2014). The study stressed that policy development around community woodlands would benefit greatly from greater analysis of the results of such projects.

The number of community groups owning and managing woodland in Scotland increased from 122 in 2007 to 204 in 2012 (Forestry Commission Scotland 2015a). FCS supports community woodland projects both with funding, advice and guidance, and through the National Forest Land Scheme (Forestry Commission Scotland 2016e). The National Forest Land Scheme facilitated the sale or lease of 42 pieces of National Forest Estate woodland to community groups between 2006 and 2015 (Forestry Commission Scotland 2015a).

RETRACTED SALE AND LEASE PLANS IN ENGLAND AND SCOTLAND

A Financial Memorandum to the Climate Change (Scotland) Bill introduced in the Scottish Parliament in 2008 proposed that timber cutting rights covering 25% of the National Forest Estate could be made available on a 75 year lease (Scottish Parliament 2008). This was seen as a route to increasing the funds available for woodland creation. The proposal met with considerable opposition due to concerns over the potential negative impacts on biodiversity and timber production, and was ultimately retracted (SPICe 2009, BBC 2009).

In 2011, UK government proposals to sell 15% of England’s public forest estate over the course of the then current parliament led to a public outcry. A consultation paper was also launched inviting views on possible ownership and management options for the remaining 85% of the estate. A subsequent independent review recommended retaining the estate in public ownership, noting its great environmental and social benefits (Independent Panel on Forestry 2012). The total woodland area of the English public forest estate has since remained stable (Forestry Commission 2016a).

20 THE POLICY ENVIRONMENT

THE SCOTTISH FORESTRY STRATEGY

The current Scottish Forestry Strategy (SFS) was published in 2006 (Scottish Executive 2006). The Scottish Government’s Land Use Strategy, published in March 2016, included a commitment to review the SFS, although no date was set for this review.

Development of the SFS was led by FCS in conjunction with the Scottish Executive and environmental, community and forestry industry groups. The vision, principles, outcomes, objectives and key themes of the SFS are summarised in Figure 19.

Figure 19. Key components of the Scottish Forestry Strategy.

Source: Scottish Executive (2006)

21 In addition to the rather generalised Outcomes and Objectives shown in Figure 19, the SFS includes the following numerical targets, to be achieved by the second half of the 21st century:

 Expand woodlands to cover 25% of Scotland’s land area.  Ensure a consistent and predictable timber supply of about 8.5 million m3 per year.  35% of woodland area to be composed of native species.  Restoration of native woodland to be well under way in 70% of ancient woodland sites which have been converted to planted forests.

Since publication of the SFS, a number of indicators have been developed which enable progress against the objectives of the SFS to be judged (Forestry Commission Scotland 2015a). A number of the original indicators have been discontinued (Forestry Commission Scotland 2016f), with 28 currently in use, as detailed in Annex 2. Definitions of the full list of indicators are published by Forestry Commission Scotland (2011). Performance recorded against these indicators provides the basis for the following summary of progress in relation to the SFS’s 3 identified Outcomes.

Many of the objectives set out in the SFS do not have numerical targets associated with them. Willie McGhee (2016) of the Forestry Policy Group has cited the lack of targets as a barrier to achieving real progress, as action to achieve goals for which explicit targets do exist will be prioritised.

Outcome 1: Improved health and well-being of people and their communities

Efforts to increase visits to woodland are central to FCS’s actions to realise the health and well- being benefits of Scottish woodland. This also relates to the Scottish Government’s National Performance Framework, which includes the indicator ‘Increase people’s use of Scotland’s outdoors’ (Scottish Government 2016d).

Results against 2 of the SFS indicators suggest that the proportion of the Scottish population living close to accessible woodland has increased over the past ten years (Forestry Commission Scotland 2015a). The 2 relevant indicators are:

 ‘Proportion of the population with accessible woodland greater than 2 hectares within 500 metres of their home’, and

 ‘Proportion of the population with accessible woodland greater than 20 hectares within 4 kilometres of their home’.

There has been a corresponding increase in results against the ’Number of visits to national forests’ indicator (Forestry Commission Scotland 2015a). The exact magnitudes of increases in accessibility and visitor numbers are hard to quantify due to changes in data collection processes. Increases in accessibility have been driven by grants made available for creating new woodland close to population centres, and for improving access to existing woodland. FCS’s Re-positioning Programme has also been used to acquire and afforest land close to population centres (Forestry Commission Scotland 2016a). There has been no significant increase recorded against the ‘Proportion of adults who used woodland, forest or tree covered park for exercise at least twice per week in the last four weeks’ indicator (Forestry Commission Scotland 2015a).

None of the SFS indicators relate specifically to mental health initiatives, although FCS has been involved in some activity in this respect. In 2007 FCS introduced the Branching Out scheme, designed to supplement mental health services in the Greater Glasgow and Clyde area. The 12 week programme, undertaken by people referred to the scheme by mental health services, involves a range of group activities undertaken within woodlands. A report published

22 in 2009 found some improvements in mental health indicators in the participants of the pilot scheme, particularly in those with the most severe symptoms prior to participation (Wilson, 2009). The programme is now largely run by a variety of environmental charities and local authority services, and has had almost 1,800 participants as of 2016 (Forestry Commission Scotland 2016g).

Outcome 2: Competitive and innovative businesses contributing to the growth of the Scottish economy

Good progress has been made against the target to develop a timber supply of about 8.5 million m3 per year, which was included in the SFS. Performance against the ‘Actual wood production’ indicator shows that this target was surpassed in 2012 (Forestry Commission Scotland 2016h). The FC’s most recent forecast of softwood availability predicts that the annual target will be consistently achieved for the next few decades, although beyond 2047 there could be slight shortfalls (Forestry Commission 2014).

Results against the ‘Actual wood production’ indicator have increased by over 40% since the introduction of the SFS (Forestry Commission Scotland 2015a).

The ‘Area of new coniferous woodland’ indicator shows an increase in planting of productive woodland, averaging 1,087 ha per annum from 2005/06 to 2010/11, and 2,250 ha per annum from 2011/12 to 2014/15 (Forestry Commission Scotland 2015a).

The ‘Timber’s contribution to Scottish gross value-added’ indicator shows an increase since 2008, with the results taken from the CJC Consulting report discussed earlier in this paper.

FCS collaborates on various initiatives aimed at encouraging use of timber in construction, such as the Scottish Government’s (2013b) Wood First programme, the Wood for Good promotion campaign, and the Timber Development Programme.

Outcome 3: High quality, robust and adaptable environment

The Scottish Government has a target of averaging 10,000 ha per year of new woodland creation from 2015 onwards. The target was introduced in response to the SFS’s target of expanding woodland to cover 25% of Scotland’s land area by the second half of the 21st century. The ‘Area of new planting’ indicator shows that this target is yet to be reached, with only 6,700 ha per year of new planting on average from 2011/12 to 2015/16, 90% of which was undertaken outside of the National Forest Estate (Forestry Commission 2016a). As discussed earlier in this paper, increases in planting of new woodland will contribute to climate change mitigation, although the majority of GHG absorption attributable to Scottish woodland during this century will result from growth in existing woodlands.

The ‘Number of non-domestic, wood fuelled energy systems installed’ indicator shows a dramatic increase in installed boilers since 2006, with an associated increase in woodfuel consumption (Forestry Commission Scotland 2015a). The body of the SFS refers to the need to develop a substantial domestic wood fuel resource. As discussed in the Bioenergy section, use of wood in heat and electricity generation can help to reduce GHG emissions.

The impact of woodland expansion on biodiversity depends on the types of land selected for woodland creation, the species planted and other management techniques, as discussed earlier in this paper. FCS has highlighted actions needed to improve biodiversity in native woodland and has been involved in efforts to expand them. The SFS acknowledges the need to ensure that future afforestation is consistent with biodiversity objectives, and that action is needed to ensure that existing woodland is managed so as to maximise its contribution to the nation’s biodiversity (Forestry Commission Scotland 2015a).

23 There has been progress on biodiversity according to results against the following indicators (Forestry Commission Scotland 2016h):

 Area of woodland with active, approved deer management plans

 Area of PAWS (planted ancient woodland sites) with a commitment to restoration under long-term plans

 Proportion of woodland area managed under low impact silvicultural systems

 Area of native woodland

 Progress against Habitat Action Plan targets

Conversely, there has been little progress against the ‘Woodland Bird Index’ and ‘Proportion of woodland SSSIs in favourable or unfavourable recovering condition’ indicators. Also, as noted earlier, the most recent survey found the majority of native and ancient woodlands not to be in a satisfactory condition for biodiversity (Patterson et al. 2014b), with the rates of progress reported by FCS unlikely to have had a significant impact on this circumstance since this survey was undertaken (Forestry Commission Scotland 2016h).

The First Progress Report of Scotland’s biodiversity route map to 2020 highlighted progress against the native woodland planting and restoration targets as being insufficient to meet the 2020 deadline (Scottish Government 2016d). There was 2,314 hectares of native woodland creation in 2015-16, compared with a target of 3-5,000 hectares.

None of the SFS indicators relate directly to mitigation of flood risks, although the body of the SFS does include reference to the potential for woodland to contribute to sustainable flood management. However, Forestry Commission Scotland (2015a) is working with the Scottish Environmental Protection Agency and other bodies to facilitate planting in areas where this will help with water management.

THE LAND USE STRATEGY

Scotland’s Land Use Strategy impacts on the forestry sector, and largely complements the SFS, stipulating that governance of land use should seek to:

 protect the public interest while minimising burdens on businesses,

 allow for consideration of the ecosystem services provided by land,

 reduce GHG emissions associated with land use, and

 encourage access to land for recreation opportunities.

The Land Use Strategy also makes a commitment to develop a Land Rights and Responsibilities Statement, which will “guide the development of public policy on the rights and responsibilities in relation to the ownership, use and management of land”. The publication of this statement is required by the Land Reform (Scotland) Act 2016. This act specifically requires the Land Rights and Responsibilities Statement to:

 support human rights,

 help to reduce socio-economic inequalities,

24  facilitate community empowerment,

 further sustainable development, and

 increase the diversity of land ownership.

RENEWABLE ENERGY POLICY

The Scottish Government (2011c) has a target of producing 30% of energy from renewable sources by 2020. More specifically, there is a target of producing the equivalent of 100% of Scotland’s electricity consumption from renewable resources, whilst noting that some of this electricity would be consumed outside of Scotland. For renewable heat, the target is to deliver 11% of Scotland’s heat from renewables by 2020.

BIODIVERSITY POLICY

Scotland’s Biodiversity Strategy, like the SFS, acknowledges the need to ensure that future afforestation is consistent with biodiversity objectives, and that action is needed to ensure that existing woodland is managed so as to maximise its contribution to the nation’s biodiversity (Scottish Government 2013c). The Scottish Government’s (2015b) Six Big Steps for Nature, produced to supplement the Biodiversity Strategy, set targets to:

 Increase the amount of native woodland in good condition.

 Create 3,000-5,000 ha of new native woodland per year.

 Restore around 10,000 ha of native woodland to satisfactory condition.

PHYSICAL & MENTAL HEALTH POLICY

The Scottish Government has created several initiatives seeking to increase levels of physical activity in the outdoor environment with a view to improving both physical and mental health, since both have been highlighted as key objectives (Scottish Government 2016e, NHS Health Scotland 2016, Scottish Natural Heritage 2016, Scottish Government 2012, Scottish Government 2016f). In addition, the Scottish Government’s (2016g) Land Use Strategy refers to the need to ensure public access to outdoor spaces providing opportunities for physical activity, since this is seen as important for physical and mental health.

INTERNATIONAL CONVENTIONS AND GUIDELINES

The UK is a signature of various agreements on human rights and other guidelines which impact on the forestry sector. The European Convention on Human Rights includes provisions protecting the rights of property owners, but also affirms that these rights must be balanced with the general public interest. Accordingly, the document allows states to make legislation encouraging the management of privately owned land for public benefit. This affects the implementation of Compulsory Purchase Orders (CPOs), which can be used to force a land owner to sell land if doing so is in the public interest (Land Reform Review Group 2014). At least one CPO has been used successfully to acquire woodland for development (Woodland Trust 2010), and at least one attempt has been made by a local authority to use a CPO to acquire privately owned woodland in order to enable public access to a particular site (Bond Dickinson 2015).

25 The Food and Agriculture Organization (FAO) of the United Nations’ (2006) publishes guidelines relating to forest management. The guidelines include recommendations for supporting the economic, social, cultural and environmental value of forests. Forests which are certified against schemes such as the Forest Stewardship Council and Programme for the Endorsement of Forest Certification (discussed later in this paper) are likely to satisfy the FAO’s recommendations.

FORESTRY STANDARDS AND AGREEMENTS

INTERNATIONAL FORESTRY STANDARDS AND AGREEMENTS

Various intergovernmental agreements and independently administered standards impact on the forestry sector in Scotland. This circumstance can be traced back to the 1992 UN Earth Summit, at which conventions were agreed on climate change, biodiversity and combatting desertification (Forestry Commission 2011b, UN 1997). Continued action around forestry from the UN led to the establishment in 2000 of the UN Forum on Forests (UNFF), which was tasked with promoting sustainable development of forests. Specifically, the UNFF seeks to “strengthen political commitment and action” around sustainable forestry, to “enhance the contribution of forests” to the UN’s development goals, and to “provide a framework for national action and international cooperation” (UN 2016).

The UN’s programme on bio-diversity led to the establishment of the Ministerial Conference on the Protection of Forests in Europe (MCPFE), now known as Forest Europe (Forestry Commission 2011b). The vision of Forest Europe is to develop a European forest resource which supports “a green economy, livelihoods, climate change mitigation [and] biodiversity conservation”, and enhances water quality and combats desertification (Forest Europe 2011). This vision is achieved through periodic conferences at which sets of commitments are agreed upon by ministers of European countries, including the UK (Forest Europe 2016). The content of these commitments is detailed in the Pan-european Operational Level Guidelines (PELOG), which were last updated in 2015 (Forest Europe 2015a, Forest Europe 2015b). The stipulations of the latest commitment focus on maintaining timber resources, ensuring strong carbon uptake, and protecting biodiversity and soil health.

During the 1990s, a range of independent certification schemes were developed in response to concerns over deforestation (Forestry Commission 2011b). These are voluntary schemes which are independent of governments, and are intended to give customers assurance of the sustainability of the forests from which a product is harvested. The vast majority of the woodland covered by these certification schemes is within Europe and North America. Although more than 50 certification programmes exist, most certified forest falls under 2 organisations (Forestry Commission 2011b): the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC). The latter is an umbrella organisation covering numerous individual schemes in different countries.

UK FORESTRY STANDARDS AND AGREEMENTS

All publicly funded forestry in the UK is required to meet the UK Forestry Standard (UKFS) (Scottish Executive 2006). This includes woodland for which grants have been provided. This is a reference standard for sustainable forestry, and “provides a framework for the delivery of international agreements on sustainable forest management” (Forestry Commission 2011b).

The UKFS is regulated and monitored in Scotland by FCS (Forestry Commission 2011b). Applications for forestry proposals are assessed against the UKFS, as are applications for grant

26 aid. The standard seeks to protect biodiversity whilst maintaining a good supply of forestry products and ensuring public access to woodland for recreation. It includes guidance on meeting the relevant EU directives and conventions.

The UK Woodland Assurance Standard (UKWAS) acts as an audit scheme recognised by both the FSC and the PEFC, and implements the commitments of the PELOG (Forestry Commission 2011b). It is independent of government, being owned and managed by a combination of environmental organisations and forestry businesses. The requirements of the UKFS provide the basis of the UKWAS. All FCS woodland is audited against the UKWAS and by extension certified under the FSC, whilst as of 2016, 35% of non-FCS woodland in Scotland has been audited and certified (Forestry Commission 2016c). Outside of the National Forest Estate, certification is usually only sought by larger forest holdings and those with a focus on timber production, due to the associated expense.

RELEVANT LEGISLATION

ACTS OF PARLIAMENT

The FC was formed as a result of the Forestry Act 1919, which was later superceded by the Forestry Act 1967. The latter act is the key piece of legislation relating to the forestry sector, and details the role of the Forestry Commissioners. The key stipulations of this act, and its subsequent amendments are as follows:

 The Forestry Act 1967 requires the Forestry Commissioners to “promote the interests of forestry, the development of afforestation and the production and supply of timber and other forest products”. The act also gives the commissioners the power to purchase, lease or exchange land which is suitable for afforestation.

 The Forestry Act 1979 amended the Forestry Act 1967 to give the Forestry Commissioners the right, subject of approval from the respective ministers, to offer grants and loans to assist owners and lessees of land in the “management of the land for forestry purposes”.

 The Forestry Act 1981 amended the Forestry Act 1967 to give the respective ministers the power to sell land which is not suitable for afforestation or connected activities, such that other, more suitable land can be obtained in its stead.

 The Wildlife and Countryside (Amendment) Act 1985 amended the Forestry Act 1967 to make the Forestry Commissioners responsible for achieving “a reasonable balance between” the production and supply of timber, preservation of natural beauty and “conservation of flora, fauna and geological or physiographical features of special interest”.

 The Nature Conservation (Scotland) Act 2004 gives every public body and office-holder the duty “to further the conservation of biodiversity so far as is consistent with the proper exercise” of the functions for which they are responsible. The act sets out measures to protect sites of special scientific interest and other land considered to hold particular value resulting from its natural features. This act also amended the Forestry Act 1967 to give Forestry Commissioners the right to refuse felling licences where felling may have a negative impact on flora, fauna, or the natural beauty of the land.

 The Public Services Reform (Scotland) Act 2010 amended the Forestry Act 1967 to give the Forestry Commissioners the right to:

27 (i) form and invest in body corporates

(ii) provide loans

(iii) establish charitable trusts

(iv) appoint persons to act as officers of body corporates or trustees of charitable trusts

(v) lease land to appropriate community bodies, and

(vi) delegate its functions to these community bodies.

A number of other acts of parliament impact on the forestry sector, as follows:

 The Plant Health Act 1967 makes the Forestry Commissioners responsible for the control of pests and diseases which may be damaging to trees. This gives the Forestry Commissioners powers to “prohibit or regulate” the delivery of material considered “likely to introduce a pest into Great Britain”, and to have such material destroyed.

 The Countryside (Scotland) Act 1967 gives the Forestry Commissioners the power to provide facilities such as accommodation, camp sites, footpaths etc. on any land placed at their disposal.

 The Town and Country Planning (Scotland) Act 1997 gives planning authorities a duty to include conditions in planning permissions which require the preservation or planting of trees where appropriate. The act also entitles planning authorities to make tree preservation orders which (i) prohibit the felling of trees without permission or (ii) require replanting in areas where felling has taken place. The act prohibits the felling of trees in conservation areas and requires replanting of sections of conservation areas in which felling has taken place.

 The Scotland Act 1998 requires the Forestry Commissioners to “comply with such directions as may be given to them by…the Scottish Ministers in relation to the exercise of their functions as regards Scotland”.

 The Climate Change (Scotland) Act 2009 gives the Scottish Ministers the power to modify the functions of the Forestry Commissioners with regards to Scotland, where such action is required in relation to climate change mitigation. The Act set a target of reducing GHG emissions by at least 42% by 2020, and at least 80% by 2050.

 The Flood Risk Management (Designated Responsible Authorities) (Scotland) Order 2013 named the Forestry Commissioners amongst the responsible authorities referenced in the Flood Risk Management (Scotland) Act 2009, alongside local authorities, Scottish Water, the Cairngorms National Park Authority and the Loch Lomond and The Trossachs National Park Authority. This gives the Forestry Commissioners in Scotland the responsibility to contribute to and promote sustainable flood management.

 The Land Reform (Scotland) Act 2016 requires that the Scottish Ministers develop a land rights and responsibilities statement, as discussed in relation to the Land Use Strategy earlier in this briefing. The act requires that the land commissioners exercise their functions in accordance with this statement. The act amended the Community Right to Buy provisions of the Land Reform (Scotland) Act 2003. The Community Right to Buy enables community bodies to forcibly acquire privately owned land for the purposes of furthering sustainable development in the public interest, subject to various conditions. Application of the Community Right to Buy to National Forest Estate woodland is 28 supported by FCS’s National Forest Land Scheme (Forestry Commission Scotland 2010). Note that the right to buy applies to any type of land, including woodland outside of the National Forest Estate.

EU LEGISLATION & STRATEGIES

The EU has no competence in forestry. However, the EU does have a Forest Strategy, and a number of EU directives and conventions impact on the forestry sector. The EU legislation impacting on forestry in the UK is listed by the Forestry Commission (2011b) as follows:

 Birds Directive 2009/147/EC – This directive (i) defines bird species whose habitats are deemed to require special conservation measures, (ii) details restrictions on hunting, capture and trade of birds and (iii) requires member states to protect habitats important to birds. This directive is enacted in the UK by the Wildlife and Countryside Act 1981, as amended.

 Environmental Impact Assessment Directive 85/337/EEC – This directive details what kinds of projects require environmental impact assessments (EIAs). Afforestation schemes are mentioned, with the requirement for an EIA for these schemes left to the discretion of the respective member state. This directive is implemented in Scotland by a number of regulations documents. The most important for the forestry sector is The Environmental Impact Assessment (Forestry) (Scotland) Regulations 1999.

 Environmental Liability Directive 2004/35/EC – This directive makes all operators carrying out occupational activities liable for environmental damages caused by that work, where fault can be proven. A select group of occupational activities are identified for which fault need not be proven in order for liability to apply, however this group does not include forestry. This directive is implemented in Scotland by the Environmental Liability (Scotland) Regulations 2009.

 Forest Reproductive Material Directive 1999/105/EC – This directive states that all seeds and cuttings from a set list of tree species10 having been produced within and being sold within the EU for forestry purposes must be traceable to the region in which they were produced. The directive also requires producers of this material to be officially registered within their respective member state. This directive is implemented in the UK by the Forest Reproductive Material (Great Britain) Regulations 2002.

 Habitats Directive 92/43/EEC – This directive requires member states to identify sites requiring conservation measures in order to protect species of flora and fauna reliant upon the habitats they provide. Member states must then take action to protect these sites and maintain or improve their ability to support vulnerable species. This directive is implemented in the UK through a combination of the Conservation of Habitats and Species Regulations 2010 and the Conservation (Natural Habitats, &c.) Regulations 1994.

 Water Framework Directive 2000/60/EC – This directive requires member states to take action to protect the quantity and environmental quality of water available for human use and to limit levels of pollution in all bodies of water. This directive is implemented in Scotland through the Water Environment and Water Services (Scotland) Act 2003.

10 Listed in Annex 1 of the Directive, includes all of the most common tree species in Scottish woodland

29  European Landscape Convention – This convention requires member states to implement landscape policies which conserve and enhance landscapes in terms of their cultural and natural heritage. Here, ‘landscapes’ are defined as areas “whose character is the result of the action and interaction of natural and/or human factors, and hence include woodland. The Convention largely pertains to planning policy, and encourages public participation.

The EU Forest Strategy seeks to provide guidance on taking forestry into account during development of other policies at EU level (European Commission 2016). Specifically, the importance of forestry is noted in relation to rural development, environmental quality, biodiversity, bioenergy, climate change and forest-based industries. The strategy calls on member states to consider its stipulations when developing domestic forestry policies.

The EU Forest Strategy is broadly similar in its objectives to the SFS and Forest Europe. It aims to produce an EU woodland resource which is sustainable, contributes to biodiversity, provides a source of construction materials and bioenergy, contributes to rural development, and is resilient to climate change, pests and diseases. The strategy aims to build on the work of Forest Europe and other international initiatives.

Also relevant to the forestry sector are the EU’s Biodiversity Strategy, Sustainable Development Strategy and Rural Development Policy.

FINANCIAL SUPPORT FOR FORESTRY

FORESTRY GRANT SCHEME

Grant funding is available for a variety of forestry projects in Scotland through the Forestry Grant Scheme, which opened in March 2015. The grants are a key tool in delivering targets related to forestry, with most land owners’ decisions regarding woodland planting and management being heavily influenced by the available grant schemes (Forest Research 2013). The funding comes from the Scottish Government’s Scottish Rural Development Programme (SRDP) 2014-20, with 55% being reimbursed by the European Agricultural Fund for Rural Development (EAFRD) (Scottish Government 2013d). The EAFRD forms Pillar 2 of the EU’s Common Agricultural Policy (CAP). The Forestry Grant Scheme is administered by FCS in conjunction with the Scottish Government’s Rural Payments and Inspections Division. It aims to make available £252m from 2014-2020, with the intention of helping to achieve targets for new woodland creation as well as other goals of the SFS. Activities supported by the scheme include:

- creation of new woodland,

- enhancement of biodiversity in existing woodland,

- bringing more woodland into active management,

- action preventing spread of diseases affecting trees,

- development of road access to inaccessible woodlands to reduce freight costs,

- woodland creation for flood mitigation,

- creation of small scale woodlands on agricultural pasture or forage land,

- improving public access to woodland, and

30 - investing in equipment for local small-scale harvesting.

For new woodland creation, the size of the available grant depends on the tree species being planted (Rural Payments and Services 2016). For example, £2880 per ha is available for creation of broadleaved woodland for timber production, whereas £1920 is available for majority Sitka spruce woodland. Higher rates are also payable in target areas.

In 2016, a “Forestry Co-operation Option” was added to the Forestry Grant Scheme. This aims to fund the time-input required to facilitate projects requiring co-ordination between neighbouring land-owners and managers, where such co-ordination is expected to bring benefits in comparison with individual schemes confined to each individual land holding (The European Agricultural Fund for Rural Development 2016). Similarly, an Environmental Co-operation Action Fund was announced in March 2016 (separate from the Forestry Grant Scheme), with £10m of funding being made available up to 2020. Again, this funds activity required to facilitate environmental projects involving co-operation between different land owners and managers. This fund is available for woodland creation and natural flood management projects, as well as other projects not related to forestry.

The current Forestry Grant Scheme was preceded by a similar scheme which formed part of the SRDP 2007-13 (Forestry Commission Scotland 2016j). This scheme made available a total of £36m per annum for woodland creation, sustainable forestry management and woodland improvement schemes (Forestry Commission Scotland 2014).

Analysis by Forest Research (2013) suggested that, under the 2007-13 scheme, native woodland creation was a better investment than creation of productive, coniferous woodland, and that this skewed investment towards native woodland schemes. The current scheme is generally seen as being more favourable to productive forestry, and has been met with increased interest in grants supporting this activity (Woodland Expansion Advisory Group 2016).

FCS have cited insufficient take up of grants as contributing to failures to meet woodland creation targets (Forestry Commission Scotland 2016i).

BARRIERS TO UPTAKE OF FORESTRY GRANT SCHEME

There have been concerns regarding the length of time taken for grant applications to be processed, which can be up to two years (Forest Research 2013, Confor 2016a). This is largely due to the processes undertaken to assess the environmental impact of the proposal. The costs to the applicant of going through this process can be as much as £50,000 for the largest schemes. These issues can be a barrier to uptake of the grants, and therefore to achievement of targets associated with the activities supported by the grants.

In August 2016, the Cabinet Secretary for the Rural Economy and Connectivity, Fergus Ewing, announced that Jim MacKinnon, a former Scottish Government Chief Planner, had been appointed to assist with improving the grant approvals process with a view to reducing processing time. Confor (2016a) has welcomed this appointment.

Uncertainty created by frequent changes to grant schemes can also act to discourage investment (Forest Research 2013). For example, grant applications fell towards the end of the 2007-13 SRDP scheme, with potential investors unsure about the format of the next iteration of the scheme.

FCS have raised concerns about issues with the IT system used to administer the grants, which are increasing the administrative burden and cost of delivery of the grants (Forestry Commission Scotland 2016i).

31 Besides grants directed at forestry, investment in woodland creation and management is affected by grants available for other land uses (Forest Research 2013). The key competing land use is farming, for which EU grant funding is available through CAP. The funding comes in the form of grants through the SRDP, as well as through direct payments under the European Agricultural Guarantee Fund, commonly know as Pillar 1 of CAP. The availability of these grants can leave farmers with little incentive to create woodland on land which is suitable for agriculture. This is exacerbated by the long term commitment represented by woodland creation, in comparison with agriculture which can offer a quicker return on investment under the current grant regime. The Forestry Grant Scheme includes specific options for combined forestry and agricultural schemes, with the intention of encouraging farmers to incorporate some woodland into their property (Woodland Expansion Advisory Group 2016).

TAX EXEMPTIONS

In addition to grant schemes, a number of tax exemptions affect the forestry sector (Scottish Woodlands 2015):

 Inheritance Tax - Under Sections 125-130 of the Inheritance Tax Act 1984, the value of inheritance tax charged on woodland is calculated based on the value only of the land itself, excluding the value of the trees.

 Capital Gains Tax - Section 250 of the Taxation of Chargeable Gains Act 1992 exempts the value of timber from any capital gains tax chargeable on income from sales of commercial woodland. That is to say that capital gains tax charged on sales of commercial woodland is calculated based on the increase in value of the land itself, after subtracting the value attributed to the trees growing on it from the total sale value.

 Corporation Tax - Under Sections 37 and 980 of the Corporation Tax Act 2009, no corporation tax is payable on profits “arising from the commercial occupation of woodlands in the United Kingdom”.

 Income Tax - Under Section 768 of the Income Tax (Trading and Other Income) Act 2005, no income tax is payable in relation to income “arising from the commercial occupation of woodlands in the United Kingdom”.

The Land Reform Review Group (2014) have recommended that Inheritance Tax and Capital Gains Tax be reviewed in terms of their benefits and their costs in revenue foregone. The group noted that blanket tax reliefs for all land of a particular use were not useful in supporting specific, desirable activities related to these land uses, with targeted subsidies being more useful in this respect.

Since Inheritance Tax, Capital Gains Tax and Corporation Tax are all reserved matters, the Scottish Government has no power to alter these exemptions. Although the Scottish Government has some powers regarding the rate of Income Tax (under sections 25-27 of the Scotland Act 2012), the right to grant exemptions is still reserved.

GOVERNANCE STRUCTURE OF SCOTTISH FORESTRY

There is understandably some confusion around the extent to which forestry is devolved. Forestry Commission Scotland’s (2016j) latest annual report states that:

“Forestry Commission Scotland operates as part of the Scottish Government, responsible for advising Forestry Ministers within Scottish Government on forestry policy and its

32 implementation across Scotland. Forestry Commission Scotland also remains part of the Forestry Commission from which it purchases and receives a number of services”.

The report goes on to note that:

“the Secretary of State for Environment, Food and Rural Affairs has overall responsibility for UK forestry interests within the European Union and for international negotiations on forestry, including the formulation of UK policy on international forestry.”

In a recent report, the Scottish Government’s Land Reform Review Group (2014) describes the situation as follows:

“The perception might be that FCS [is] part of the Scottish Government, but this is not the case. While responsibility for forestry was devolved in 1999, the responsibilities of the Forestry Commissioners in Scotland were not, and these remain reserved to Westminster.”

THE FORESTRY COMMISSION AND ITS SUBSIDIARIES

Figure 21 shows a diagram of the current governance structure surrounding forestry in Scotland. The figure shows the key organisations and departments, and the organisational links between them. The following text provides a more detailed description of the workings of the various organisations and their responsibilities.

The FC is a non-ministerial department of the UK government (Forestry Commission England/Central Services 2016). The board of the FC is made up of the Forestry Commissioners, whose responsibilities are as described in relation to the various acts of parliament detailed earlier. Most of the FC’s functions are provided at country level, although there is some cross-border activity. Forestry Commission England and FCS are responsible for implementing forestry policy in their respective countries. Most of the functions of the Forestry Commission in Wales and Northern Ireland are now undertaken by Natural Resources Wales, and the Forest Service, respectively, although the FC’s research service ‘Forest Research’ still operates within Wales (Forest Research 2016). The FC’s Central Services department is responsible for cross-border functions in Scotland and England such as human resources, finance, accounting and information systems (Forestry Commission 2016d). Central Services also incorporates Forest Research and the Plant Health Service.

The Scotland Act 1998 gave Scottish Ministers powers to direct the activities of the forestry commissioners in relation to Scotland. This led to the Forestry Devolution Review 2002, which resulted in the formation of FCS (Land Reform Review Group 2014). FCS remains part of the FC, however, Scottish Ministers decide the policy and financial framework within which the FC operates in Scotland (Forestry Commission Scotland 2016i). As of 2015-16, FCS employs 144 FTE members of staff.

Although FCS is a part of the FC, it effectively operates as a department of the Environment & Forestry Directorate, and is funded by the Scottish Government (Forestry Commission Scotland 2016i). The Cabinet Secretary for Rural Economy and Connectivity is answerable to the Scottish Parliament for the performance of FCS. The Scottish Parliament’s Rural Economy and Connectivity Committee is responsible for scrutiny of the government’s forestry policies and expenditure (Scottish Parliament 2016).

The Scottish Government’s draft budget for 2016-17 allocates a net expenditure of £61.3m on FCS (SPICe 2016). Figure 20 shows the variation in Scottish Government funding allocated to FCS from 2007-8 to the present. The allocation from 2015-16 was 26.1% lower than that for

33 2007-8 in real terms. The majority of funding is spent on provision of grants, funding Forest Enterprise Scotland and supporting various programmes and initiatives, as detailed in Table 2.

Figure 20. Scottish Government Funding for FCS, in real and actual terms.

100 90 80 70 60 50 Real terms (£m) 40 Actual terms 30 20 10

0 FCS FCS Scottish GovernmentFunding

.

Source: Actual terms data from Forestry Commission Scotland (2016k), real terms calculated using The Scottish Parliament’s Inflation Tool.

Table 2. Breakdown of FCS expenditure of funding from the Scottish Government.

2015- 2016- % Item 16 17 Description change (£m) (£m) Woodland Current Forestry Grant Scheme, as well as 36.0 36.0 0.0% Grants payments required for legacy schemes. This covers staffing costs related to policy Policy, development and corporate services. Some of Regulation and 5.1 4.7 -7.0% the corporate services costs relate to Administration contributions to the FC budget for shared services provided. This covers support for programmes such as Central Scotland Green Network, Strategic Programme Timber Transport Scheme, tree health monitoring 21.0 18.5 -11.8% Costs and surveillance, Native Woodland Survey for Scotland, as well as administration of woodland grants. Forest This supports the management of woodland Enterprise 21.7 21.7 0.0% owned by FCS. Scotland Depreciation 0.1 0.1 0.0% EU funding, supporting current and legacy grant EU Income -19.8 -19.8 0.0% schemes.

Total 64.1 61.3 -4.4% Source: SPICe (2016)

34 Forest Enterprise Scotland (FES) is part of the FC11 (Scottish Government 2016a) and is tasked with managing the Scottish National Forest Estate in accordance with the priorities and objectives of the Scottish Ministers (Forestry Commission Scotland 2015b). FES was established in 2004 and is classed as a Public Corporation, i.e. a government-controlled body which covers at least half of its production costs through sales of goods and services (HM Treasury 2013). FES is accountable to the National Committee for Scotland, a subsidiary body of the FC to whom FCS has delegated its powers and duties in relation to the National Forest Estate (Forestry Commission Scotland 2015b). FES employed 822 FTE members of staff during the year 2015-16 (Forestry Commission Scotland 2016i). FES’s income from timber sales in 2015/16 was £62.4m (Forestry Commission Scotland 2016j).

Forest Research is an Executive Agency of the FC and was set up in 1997 (Forest Research 2003). It operates across Scotland, England and Wales and is responsible for carrying out research on behalf of the FC. Forest Research’s priorities are shaped by the SFS, the Welsh Government’s Woodland Strategy and the UK government’s Forestry and Woodlands Policy Statement (Forest Research 2016). It is advised by the FC on its strategic direction and performance management.

Forest Research is funded partly by the FC, as well as by Forestry Commission England, FCS and Natural Resources Wales (NRW), receiving a total of £9.6m from these sources in 2015-16 (Forest Research 2016). Increasingly, it also attracts funding from “other government departments, the European Commission, UK research councils, commercial organisations, private individuals and charities”, and received £5.0m of funding from such sources in 2015-16. Forest Research has two main research stations, one in Hampshire, England, and the other in Roslin, Midlothian. Forest Research employed 178 FTE members of staff during the year 2015- 16. As of 2015-16, its research activities covered:

 tree health

 pests and diseases

 ecosystem services

 the use of woodland to reduce flooding, and

 GHG emissions associated with forestry.

DEVOLUTION OF FORESTRY IN SCOTLAND

A recent report from the Scottish Government’s Land Reform Review Group (2014) noted that the FC is expected to be replaced in England “at some stage”, and that “the devolution of the FC’s responsibilities in Scotland to the Scottish Parliament and government therefore seems likely, whether by choice or default”.

In June 2015, then Minister for Environment, Land Reform and Climate Change Dr Aileen McLeod announced that discussions were underway between the Scottish and UK governments to discuss “the transfer of the Forestry Commissioners’ powers and duties as they relate to Scotland” (Scottish Government 2015c).

In August 2016 the Scottish Government (2016a) published a consultation document titled ‘The Future of Forestry in Scotland’, which announced the government’s intention to

11 FES is sometimes described as being part of FCS (Forestry Commission Scotland 2015b) but this is not strictly the case.

35 introduce a new Forestry Bill. This intention was confirmed in the 2016-17 Programme for Government. The consultation document proposed new arrangements intended to “enable the state forestry sector to expand its contribution to Scotland’s rural economy and to other social and environmental outcomes”. The document describes the Scottish Government’s aims with regards the devolution of forestry as follows:

 “To introduce new organisational arrangements so that the management of forestry in Scotland is fully accountable to the Scottish Ministers and to the Scottish Parliament.

 To ensure that we have in place effective cross-border arrangements where those suit Scottish needs.

 To replace the Forestry Act 1967 with a modern approach to the development, support and regulation of forestry.”

Carrying out the proposed changes will require primary legislation in Scotland, as well as secondary Orders under the Scotland Act 1998 terminating the responsibilities of the Forestry Commissioners (Scottish Government 2016a). Such secondary Orders would be subject to procedures in both UK and Scottish Parliaments. The proposals would see the new legislation largely transfer the existing responsibilities currently placed on the Forestry Commissioners, but may include freedom to use National Forest Estate land for a wider variety of purposes, as well as stipulations ensuring felling activities are consistent with standards of good forestry.

The proposals seek to simplify the governance arrangements through the establishment of a Forestry Division within the Environment & Forestry Directorate. The Forestry Division would be responsible for the functions currently undertaken by FCS, but not for those undertaken by FES. This would formalise the current arrangement under which FCS already acts informally as part of the Environment & Forestry Directorate.

The consultation document also proposes the formation of a new agency, ‘Forestry and Land Scotland’. This agency would take over management of the National Forest Estate from FES. The remit of this body could be extended over time to include responsibility for managing other publicly owned land in the public interest. The body would act as an executive agency of the Scottish Government, and would be formed from the existing Forest Enterprise Scotland organisation.

The proposed arrangements would preserve the separation of the activities currently undertaken by FCS and FES. This is seen as advantageous due to the potential conflict of interest inherent in a single body both being responsible for developing policy and regulations, and performing duties subject to those policies and regulations. However, the consultation document also notes the potential benefits of creating a new body responsible for all forestry functions, which would allow closer association between policy and delivery.

It is proposed that cross-border co-operation should be maintained on some of the FC’s current functions, specifically:

 science and research

 action on pests and diseases, and

 codes such as the UKFS.

Note that, since the FC is ultimately likely to be replaced, the format of any cross-border arrangements replacing the activities of the FC's Forest Research and Plant Health Service subsidiaries are uncertain.

36 Figure 21 shows the governance structure of forestry in Scotland as proposed in the consultation document. The figure shows the key organisations and departments, and the organisational links between them. Note that the structure shown in Figure 21 is based on intentions expressed in the consultation document, and that discussions are still underway.

STAKEHOLDER REACTIONS TO PROPOSED NEW GOVERNANCE ARRANGEMENTS

FCS’s annual report for 2015-16 notes that the uncertainty over its future organisational status poses difficulties in managing business as usual and has led to increased losses of key staff and difficulties with recruitment (Forestry Commission Scotland 2016j).

Confor (2016b) has welcomed the proposals to complete devolution, while stressing the importance of maintaining a strong group of foresters within the new Forestry Division, and preserving the productivity of the National Forest Estate. Confor shares the Scottish Government’s opinions on the need to ensure continued cross-border co-operation regarding research, pests and diseases, and sustainability standards. It also advises against following the approach taken in Wales with the creation of Natural Resources Wales (see Devolution of Forestry In Wales case study). It should be noted that NRW was tasked not only with the former duties of Forestry Commission Wales, but also those of the Countryside Council for Wales and Environment Agency Wales (Wales Audit Office 2016).

The Woodland Trust is against the proposals, citing concerns that replacing FCS with a governmental department will lead to a loss of staff and expertise (Dundas 2015). It predicts that this circumstance will cause failure to deliver on plans to increase planting, bring forward renewable energy projects, improve biodiversity and promote community land ownership. It cites similar issues in Wales since the creation of NRW in 2013.

Forest Policy Group is also concerned by some aspects of the proposals (McGhee, 2016). The group notes that FCS has played a valuable role in developing “innovative approaches to forestry”, such as the use of the National Forest Land Scheme in increasing community ownership. The group is also concerned that the new Forestry Division will not be subject to external scrutiny.

The deadline for responses to the Scottish Government’s consultation was 9/11/2016 (Scottish Government 2016a), with a summary of the responses likely to be published in February 2017 (Environment and Forestry Directorate 2016). The Forestry Bill is expected to be introduced to the Scottish Parliament before recess in 2017.

37

Figure 21. Current and proposed governance structures of forestry in Scotland.

Note: The structure shown is based on intentions expressed in the consultation document, with discussions still underway.

DEVOLUTION OF FORESTRY IN WALES

Since 2013, the FC has had no responsibilities in Wales (Law Wales 2016). These responsibilities are now undertaken by Natural Resources Wales (NRW), which replaced Forestry Commission Wales (FCW), the Countryside Council for Wales and Environment Agency Wales (Wales Audit Office 2016). NRW is responsible for management of the Welsh National Forest Estate and of conservation areas, and for regulation and licensing of environmental emissions.

Prior to the formation of NRW, a report by the National Assembly for Wales’ Environment and Sustainability Committee (2012) found concerns from the private commercial forestry sector that the proposed restructuring would result in a loss of focus on forestry, and could have implications for business continuity. The report also noted stakeholders’ concerns about a potential loss of access to the services of Forest Research, although this access has in fact been retained.

The Welsh Government estimated prior to the formation of NRW that the change would make a net saving of £92m by 2022-23 (Wales Audit Office 2016). As of February 2016, the Wales Audit Office (WAO) considered that NRW had “made good progress towards achieving” this, although some savings had not been made as early as anticipated. The WAO also concluded that business continuity had been maintained in NRW’s creation. Some issues with migration of IT services were reported.

Investigations conducted by the Welsh Assembly’s Environment and Sustainability Committee a year after the creation of NRW found that stakeholders in the commercial forestry sector were highly critical of NRW (Jones 2014). Specifically, stakeholders cited “a lack of leadership and business acumen within NRW, which they believed had led to a deterioration in commercial focus and management of the public forest estate since the days of FCW”. Stakeholders also felt that NRW was less supportive of forestry than FCW, with NRW staff acting as advisers rather than advocates.

Conversely, Wildlife Trusts in Wales (2015) has expressed concerns that the conservation expertise formerly held by FCW was lost or diluted in the formation of NRW. They feel that NRW “sees environmental considerations as a tradable consequence of developments”, and that its lack of independence from government is a factor in this stance. Friends of the Earth Cymru (2015) have also expressed concerns about NRW’s lack of independence from government, and the impact this has on its ability to prioritise environmental issues.

NRW’s first staff survey, in February 2015, found that only 20% of respondents felt that the organisation was managed well and 14% felt that change was managed well (Wales Audit Office 2016). Scrutiny carried out by the Environment and Sustainability Committee in 2015 found that some stakeholders had lost pre- existing contacts during the change, and were struggling to establish new ones (Jones 2015).

ANNEX 1: GLOSSARY

Ancient woodland Woodland which was originally self-sown, and in which woodland cover has been continuously present since at least 1860 (Patterson et al 2014b). Bioenergy The generation of heat, electricity or liquid fuels from biomass. Biomass Organic material from living, or recently living organisms (in the context of energy generation, this is usually plants). Broadleaved Trees with wide, flat leaves. Carbon dioxide equivalent A unit used to quantify the global warming impact of gases with different warming intensities. For example, methane has 21 times the global warming potential of carbon dioxide, hence 1 tonne of methane is equal to 21 tonnes of carbon dioxide equivalent (OECD 2013). Conifer Trees with needle-like leaves. Forestry For the purposes of this document, 'forestry' refers to the creation and/or management of woodland for any purpose, e.g. timber production, provision of ecosystem services, provision of human access to the natural environment. GigaWatt hour A unit of energy, equal to that used in consuming one gigaWatt of power for a period of one hour. National Forest Estate The collective name for all Scottish land placed at the disposal of the forestry commissioners. Note that not all of this land is woodland. Native woodland Woodland in which over 50% of the canopy is composed of species native to Scotland. Productive woodland Woodland which is managed with timber production as a key objective. Sitka spruce A conifer tree species, native to the west coast of North America, which is the dominant species in productive woodland in Scotland. Softwood Wood from conifer trees. Woodland This document uses the definition of woodland used in the Forestry Commission’s (2016a) ‘Forestry Statistics’ releases. Woodland is ‘land under stands of trees with a canopy cover of at least 20% or having the potential to achieve this’. A plot of woodland may include some areas of open space, and felled areas which are awaiting restocking.

40

ANNEX 2: SFS INDICATORS12 CURRENTLY IN USE

CLIMATE CHANGE

Area of new planting Annual net carbon sequestration by new woodlands Woodfuel usage

TIMBER

Actual Wood Production Forecast softwood availability in the private sector Forecast softwood availability from the national forest estate Timber’s contribution to Scottish gross value-added Sawmill log consumption Sawmill sawnwood output Scottish wood’s value share of the UK market Area of new coniferous woodland Area of broadleaved woodland where timber production is a significant management objective

COMMUNITY DEVELOPMENT

Proportion of adults and/or family members who attended an organised learning activity or event linked with Scottish woodlands in the previous 12 months. Proportion of adults who have read or heard about Scottish woodlands in the past 12 months

ACCESS AND HEALTH

Proportion of the population with accessible woodland greater than 2 ha within 500m of their home Proportion of the population with accessible woodland greater than 20ha within 4km of their home. Proportion of adults (16+ years) who visited woodland in previous 12 months Number of visits to national forests Proportion of visitors satisfied with woodland recreation provision Proportion of people who used woodland, forest or tree covered park for exercise at least twice per week in the last four weeks

ENVIRONMENT QUALITY

Length/area of baseline rivers/lochs in forested catchments where ecological quality is of good or high status Proportion of woodlands covered by approved forest plans in areas designated for their landscapes

12 Note that definitions of the indicators are published by Forestry Commission Scotland (2011)

41 Proportion of woodland area managed under low impact silvicultural systems

BIODIVERSITY

Area of Native Woodland Percentage of woodland SSSIs in favourable or unfavourable recovering condition Area of PAWS with a commitment to restoration under long-term plans Area of woodland with active, approved deer management plans Woodland Birds Index

Source: Forestry Commission Scotland 2016h

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44 Forestry Commission, 2001b. Forestry Statistics 2001. Available at: http://www.forestry.gov.uk/pdf/forestrystatistics2001.pdf/$FILE/forestrystatistics2001.pdf [Accessed 24 October 2016]. Forestry Commission, 2006. Forestry Statistics 2006. Available at: http://www.forestry.gov.uk/website/ForestStats2006.nsf/byunique/woodland.html#two [Accessed 24 October 2016]. Forestry Commission, 2011a. Forestry Statistics 2011. Available at: http://www.forestry.gov.uk/website/forstats2011.nsf/LUContents/2B1ACBEE309A1CB58025736 00034B50D [Accessed 24 October 2016]. Forestry Commission, 2011b. The UK Forestry Standard: The governments' approach to sustainable forestry. Available at: http://www.forestry.gov.uk/theukforestrystandard [Accessed 3 October 2016]. Forestry Commission, 2012. GB 25-year forecast of standing coniferous volume and increment. Available at: http://www.forestry.gov.uk/pdf/NFI-Statistical-Analysis-Report_GB-25-Year- Forecast-Standing-Coniferous-Volume-Increment.pdf/$FILE/NFI-Statistical-Analysis- Report_GB-25-Year-Forecast-Standing-Coniferous-Volume-Increment.pdf [Accessed 21 September 2016]. Forestry Commission, 2013. NFI 2011 woodland map Scotland - National Forest Inventory Report. Available at: http://www.forestry.gov.uk/pdf/NFI_SCOTLAND- REPORT_010813.pdf/$FILE/NFI_SCOTLAND-REPORT_010813.pdf [Accessed 14 September 2016]. Forestry Commission, 2014. 50-year forecast of softwood timber availability. Available at: http://www.forestry.gov.uk/pdf/50_YEAR_FORECAST_OF_SOFTWOOD_AVAILABILITY.pdf/$F ILE/50_YEAR_FORECAST_OF_SOFTWOOD_AVAILABILITY.pdf [Accessed 25 October 2016]. Forestry Commission, 2015a. History of the forestry Commission. Available at: http://www.forestry.gov.uk/forestry/cmon-4uum6r [Accessed 12 September 2016]. Forestry Commission, 2015b. Forestry Statistics 2015 - UK-Grown Timber. Available at: http://www.forestry.gov.uk/pdf/Ch2_Timber_FS2015.pdf/$FILE/Ch2_Timber_FS2015.pdf [Accessed 15 September 2016]. Forestry Commission, 2016a. Forestry Statistics 2016 - Chapter 1: Woodland areas and Planting. Available at: http://www.forestry.gov.uk/pdf/Ch1_Woodland_FS2016.pdf/$FILE/Ch1_Woodland_FS2016.pdf [Accessed 24 October 2016]. Forestry Commission, 2016b. Sitka spruce - picea sitchensis. Available at: http://www.forestry.gov.uk/forestry/infd-5nlej6 [Accessed 28 October 2016]. Forestry Commission, 2016c. Woodland Area, Planting and Restocking - 2016 Edition. Available at: http://www.forestry.gov.uk/pdf/wapr2016.pdf/$FILE/wapr2016.pdf [Accessed 14 September 2016]. Forestry Commission, 2016d. Central Services. Available at: http://www.forestry.gov.uk/forestry/infd-97rcdl [Accessed 26 October 2016]. Forestry Commission England, 2011. Wood as fuel technical supplement. Available at: http://www.forestry.gov.uk/pdf/FR_BEC_Wood_as_Fuel_Technical_Supplement_2010.pdf/$FIL E/FR_BEC_Wood_as_Fuel_Technical_Supplement_2010.pdf [Accessed 26 September 2016]. Forestry Commission England/Central Services, 2016. Annual Report and Accounts 2015-16. http://www.forestry.gov.uk/pdf/annual-accounts-2015-2016-fce-central.pdf/$FILE/annual- accounts-2015-2016-fce-central.pdf [Accessed 31 March 2016]. Forestry Commission Scotland, 2009. A valuation of the economic and social contribution of forestry for people in Scotland. Available at: http://www.forestry.gov.uk/PDF/fcrp101.pdf/$FILE/fcrp101.pdf [Accessed 15 September 2016]. Forestry Commission Scotland, 2010. National Forest Land Scheme. Available at: http://www.forestry.gov.uk/pdf/fcfc102.pdf/$FILE/fcfc102.pdf [Accessed 16 November 2016]. Forestry Commission Scotland, 2011. The Scottish Forestry Strategy: Description of indicators. Available at: http://scotland.forestry.gov.uk/images/corporate/pdf/sfsindicators.pdf [Accessed 16 November 2016].

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49 Scottish Woodlands, 2015. A brief guide to forestry taxation. Available at: http://www.scottishwoodlands.co.uk/assets/pdf/forestry_taxation_summary.pdf [Accessed 16 November 2016]. Shanahan, D. F. et al., 2015. What is the role of trees and remnant vegetation in attracting people to urban parks?. Landscape Ecology, 30(1), pp. 153-165. Snowdon, P., 2009. Forestry, climate change and sustainable development. In: Combating Climate Change - A role for UK forests. Norwich: TSO, pp. 196-200. SPICe, 2009. Climate Change (Scotland) Bill – Forestry Provisions. Available at: http://www.parliament.scot/ResearchBriefingsAndFactsheets/S3/SB_09-09.pdf [Accessed 2 November 2016]. SPICe, 2016. Scottish Government Draft Budget 2016-17 - Level 4. Available at: http://www.scottish.parliament.uk/parliamentarybusiness/17534.aspx [Accessed 12 October 2016]. Suttie, E., Taylor, G., Livesey, K. & Tickell, F., 2009. POTENTIAL OF FOREST PRODUCTS AND SUBSTITUTION FOR FOSSIL FUELS TO CONTRIBUTE TO MITIGATION. In: The Read Report - Combating Climate Change: A Role for UK Forests. Edinburgh: The Stationery Office. The European Agricultural Fund for Rural Development, 2016. United Kingdom - Rural Development Programme (Regional) - Scotland. Available at: http://www.gov.scot/Resource/0050/00501661.pdf [Accessed 13 October 2016]. The Woodland Trust, 2015. Getting trees and flooding on the agenda. Available at: http://www.woodlandtrust.org.uk/blogs/woodland-trust/2015/04/getting-trees-and-flooding-on- the-agenda/ [Accessed 21 September 2016]. Thompson, C. W., 2013. Activity, exercise and the planning and design of outdoor spaces. Journal of Environmental Psychology, Volume 34, pp. 79-96. UN, 2016. UN Forest Instrument. Available at: http://www.un.org/esa/forests/documents/un- forest-instrument/index.html [Accessed 3 October 2016]. UN, 1997. UN Conference on Environment and Development (1992). Available at: http://www.un.org/geninfo/bp/enviro.html [Accessed 3 October 2016]. Valatin, G. & Price, C., 2013. How cost-effective is forestry for climate change mitigation. Available at: http://www.forestry.gov.uk/pdf/Bookchapter- Cost_effectiveness_of_forestry.pdf/$FILE/Bookchapter-Cost_effectiveness_of_forestry.pdf (pre-publication version) [Accessed 21 September 2016]. Wales Audit Office, 2016. The development of Natural Resources Wales. Available at: https://www.wao.gov.uk/system/files/publications/Development_of_Natural_Resources_Wales_ English_2016.pdf [Accessed 6 October 2016]. Wightman, A., 2012. Forest Ownership in Scotland - A Scoping Study. Available at: http://www.forestpolicygroup.org/wp-content/uploads/2014/08/Forest-Ownership-In-Scotland- Feb-2012.pdf [Accessed 20 September 2016]. Wildlife Trusts in Wales, 2015. Natural Resources Wales Scrutiny Evidence. Available at: http://www.senedd.assembly.wales/documents/s39380/NRW%202015%20- %2098%20Wildlife%20Trust%20Wales.pdf [Accessed 31 October 2016]. Williams, K., O'Brien, L. & Stewart, A., 2013. Urban health and urban forestry: How can forest management agencies help?. Arboricultural Journal, 35(3), pp. 113-133. Wilson, N. 2009. Branching Out: Greenspace and Conservation on Referral. Available at: http://scotland.forestry.gov.uk/images/corporate/pdf/branching-out-report.pdf [Accessed 10 November 2016]. Wood Fuel Task Force, 2011. Wood Fuel Task Force 2 - The Supply of Wood for Renewable Energy Production in Scotland. Available at: http://scotland.forestry.gov.uk/images/corporate/pdf/WoodfuelTaskForceUpdateReport_2011.pd f [Accessed 21 September 2016]. Woodland Expansion Advisory Group, 2016. Implementing the response to the recommendations: Final Report. Available at: http://scotland.forestry.gov.uk/images/corporate/pdf/weag-final-report-june-16.pdf [Accessed 5 October 2016].

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51

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