Crown Estate Devolution in Scotland
The Scottish Crown Estate Bill (“the Bill”) made its way through stage two in the Scottish Parliament’s legislative process in September. It has the potential to significantly change how the Crown Estate’s assets in Scotland are managed as it provides Scottish Ministers with the ability to transfer management responsibility to, amongst others, local authorities. It also allows asset managers to move away from management on a purely commercial basis. These changes alone have potentially significant ramifications for aquaculture and marine renewable energy developers.
The Bill is due to make its way onto the statute book by the end of 2019 (CES, 2018) but it is unlikely that any significant transfer of management responsibility will occur immediately after it comes into force.
Crown Estate Scotland (“CES”) has created a local asset management pilot scheme which organisations such as local authorities can apply for. It is currently in the process of assessing 13 stage 1 applications (CES, 2018). These applications are at a very early juncture and CES have made it clear that no decision to agree a pilot project will take place until the whole assessment process has been completed. This is unlikely to be before 25 March 2019 (CES, 2018). It is also unclear, at this stage, what assets may form part of any future pilot scheme.
It, therefore, follows that the transfer of management responsibility is unlikely to occur until the outcomes and lessons learned from the pilot scheme(s) are known.
Several stakeholders, such as the local authorities, have made it clear that they are reluctant to take on management responsibility without a guarantee from the Scottish Government that 100% of the associated revenues are retained by the asset manager.
Discussions on revenue distribution do not form part of the Bill and are taking place outwith the legislative process between COSLA and the Scottish Government. It is understood that there are arrangements being made to ensure revenues are distributed to coastal councils later this year.
It is clear that the distribution of revenues will be a key consideration for any potential asset manager and it is unlikely that they would agree to a transfer unless they see an economic benefit (especially considering their budgetary constraints). It will not, however, be the only consideration as the driving forces behind the Bill are not limited to economic benefit. They also include increased public participation and local stakeholder engagement in respect of how the seabed is managed in their locality.
The issue of revenue distribution should, however, be resolved prior to the Bill coming into force but, if it is not, it could dissuade potential asset managers from taking on management responsibility.
It could be another year until the legislative process is finalised and it is clear from the debate at stage two of the legislative process that there are a number of discussions, which may result in further amendments, to take place before it moves to stage three.
Aquatera has a keen interest in the Bill, the pilot schemes together with the discussions surrounding revenue distribution and their potential to impact on the development of marine renewables and aquaculture in Scotland. We will, therefore, provide further updates on these topics as and when further information is available.