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Item 3 is to take evidence from the Crown Estate in its annual session with the committee. We welcome from the Crown Estate: Gareth Baird, Scottish commissioner; Ronnie Quinn, the lead for energy and infrastructure in Scotland; and Alan Laidlaw, rural and coastal portfolio manager, Scotland. Do you have any initial remarks to make?
I have a brief remark to make.
Good morning, ladies and gentlemen. We are delighted to be here again for what is our third annual appearance before the committee. The appearances have been helpful in enabling us to understand your perspective. Your questioning has prompted changes in how we work, particularly how we report that work.
Two years ago, the committee questioned the fact that round 3 of offshore wind in Scotland, which is beyond 12 miles from shore, was not included in the finance section of our Scotland report. We addressed that matter. Last year, some members asked how we engage communities, particularly in the context of our local management agreements. We have made significant progress, with more agreements coming through and a charter on good engagement that we are set to finalise shortly.
Offshore renewables remain central to our work in Scotland. The consenting of Moray Firth offshore wind projects, which includes the first project in the United Kingdom to reach round 3, was a huge milestone for the industry. Equally, we were very pleased that our investment, alongside that of the United Kingdom Government, Scottish Enterprise and Highlands and Islands Enterprise, in the MeyGen tidal scheme off the Caithness coast means that the first phase can proceed, opening the way for Scotland to play a leading role in the development of larger commercial tidal schemes that can make a real contribution to future energy needs. However, the sector has major challenges ahead. We are working with industry partners on cost reduction, which is critical if we are to maintain investor and developer confidence in projects.
You have received our Scotland report 2014 on our work in the past financial year. We are keen to address any questions that you may have on the report or on any other aspect of our work.
Thank you very much. We will start off the questions with Graeme Dey.
Good morning, gentlemen. I have a couple of scene-setting questions emanating from the 2014 report.
First, I note that the total property value is given as £267 million, which compares with £237.3 million in the previous year. That is quite a leap. Will you outline how that increase has been arrived at?
Secondly, given the committee’s previous discussion with the minister about climate change, I am particularly interested in the suggestion that greenhouse gas emissions from the Crown Estate have been reduced by 3 per cent. How did you achieve that? How will you maintain or improve on that performance in the coming years?
As you will see from the figures, a large part of the increase in capital value is due to the increasing capital value of renewables. That is not totally unexpected because, just at the tail end of this reporting period, consents came forward for the Moray Firth area, as Gareth Baird mentioned. Renewables are still discounted in our accounts, but they go into another bracket, effectively. There has been a substantial increase effect on the capital valuation of offshore renewables in particular.
As regards the work that we do ourselves, we have initiated a green workplaces initiative in all our offices. That partly involves doing small things. We have quite a lot of recycling in our offices now, and there are various other initiatives, such as switching off laptops and monitors and reducing our use of bottled water. All that kind of thing adds up.
We have an in-house team that is co-ordinated across the Crown Estate, and we have a small team in Bell’s Brae here in Edinburgh, who work across the piece to reduce our impact on the environment.
That suggests that you have done what you have done and you are where you are, but how are you going to build on that?
I am not on the green workplaces committee myself, and neither is Alan Laidlaw, but I know that there was another meeting last week. I do not know what new initiatives will be coming forward.
Sustainability runs through our veins, and our chief executive, Alison Nimmo, has driven that very hard. There is now a sustainability discipline everywhere we act, right across the business. There will be a consistent level of increased focus on that, and that will, we hope, bring benefits.
As regards the core team in our business, the office premises and our activities are quite small compared with the other interests that we are involved in. A lot of the work that we are looking to do on climate change and carbon reduction involves influencing our tenants and helping to inform the debate.
We have an important role to play in the interpretation of some of the science and policy as reality on the ground. I could cut water use among the 38 staff in our office by 100 per cent, but that would only make a tiny difference if 10 of my farmers continue to do different things. Much of what we are trying to do lies in influencing behaviours.
Would you actively encourage your tenant farmers to carry out carbon audits on their farms?
Yes, absolutely. A lot of them have done so—the early adopters are already doing that. They have gone right down the precision route regarding the use of fertilisers and inputs. There is also a rump of them who consider things from a different perspective, and we are trying to inform their thinking.
We have a workshop with our livestock producers in early November with the Moredun Research Institute. We are working in partnership with Moredun to discuss efficiency, diseases and so on, to ensure that output per methane-producing body is as high as possible. From my point of view, that is where we can make real differences on the rural estate, rather than having a 50 per cent reduction in water use in our office, for instance. It only takes two or three burst pipes and two or three days of people ignoring them to completely mitigate any benefit that we make. That is a key point.
That answer is encouraging.
Several members wish to ask supplementary questions.
My questions are about what you include in property value. Do you value the sea bed only where you have issued a licence to somebody, or do you value the total amount of sea bed that you have? Around Scotland’s shores, you own a massive amount of sea bed, which has massive potential. Should that be valued in some way rather than valued purely when somebody asks you whether they can do something on it and you get the rent?
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We use the red book valuation principles. Valuations are done by an independent valuer or a team of independent valuers, and they are applied only to areas of the sea bed where we have activity and some lease or agreement for lease activity.
Valuing the wider aspect would be outwith the red book, which is the industry standard and norm. If a value or benefit was not being derived from an area, it would be difficult to value it under the red book rules.
That is fair enough—I understand and accept what you say. However, an estate in the Highlands is worth whatever it is worth almost irrespective of what happens on it; if little happens on it, it still has a value, which would change if other things happened.
Your report says that your current total property value is £267 million, which represents 3 per cent of the UK total. However, because you have so much shoreline in Scotland, I imagine that the potential value of your sea bed in Scotland—your estate, if you like—is pretty large in comparison with that for the rest of the UK. Would it be useful for us to measure that, even if you only quantified the area, in comparison with the rest of the UK? That would give us an idea of the potential value if further development occurred.
We could certainly identify the area of the sea bed in square kilometres, but I think—Alan Laidlaw might have more to say—that valuers would find it difficult to value something that did not have a recognised and foreseeable income stream, because I understand that that is not in the red book rules. The valuation would become contentious.
It is worth saying that, if an area does not have an active interest or an agreement, it carries a management responsibility, which could be viewed as bringing liabilities. We would get into difficulty with the Royal Institution of Chartered Surveyors red book guidance in creating value in those circumstances.
The quantifiable quantum of what we manage and look after is possible to identify. In the coastal estate, which I am responsible for, there are many long stretches of coastline that have limited value, because the interests are limited. Setting a blanket rate per kilometre of foreshore would be slightly disingenuous. I would not like to see that in our accounts.
I understand that the Crown Estate Commissioners have a general duty under the Crown Estate Act 1961—1961 is some time ago, even for someone like me. The act says:
“It shall be the general duty of the Commissioners, while maintaining the Crown Estate as an estate in land ... to maintain and enhance its value and the return obtained from it, but with due regard to the requirements of good management.”
As I understand it, legislation would be required to alter that duty, as it is part of an act, although I stand to be corrected. Has any consideration been given to updating the duty? That could perhaps be done through reference to a carbon commitment, a social remit, or sustainable development or other duties, even just within a mission statement. There might well be such plans afoot—consideration might be being given to having some sort of statement that is more appropriate for today.
We are wholly directed by the 1961 act and it is for Governments to consider whether any changes should be made to it.
I go back to the straplines of the Crown Estate: commercialism, integrity and stewardship. That means that, when it comes to the assets that we are entrusted to manage by the nation, we have to take a commercial view. There are many examples that I hope to be able to bring to the committee’s attention later in the meeting of situations in which that results in a win-win for everyone. We have to take a long-term view in any commercial activity that we undertake—that is where the stewardship part comes in. We have to act in an open and transparent fashion.
As far as the carbon footprint of our activity is concerned, all that I can do is refer back to the earlier comments about our chief executive, who has brought a way of working that is focused on sustainability to the whole team and to all the sectors of the Crown Estate. I can assure you that the carbon footprint element is now taking precedence.
As far as a more focused social remit is concerned, which is something that has been highlighted to us to an increasing extent over the past few years, would it be possible for you to have some sort of statement that the public could look at as a way of engaging with that commitment?
As I have said to the committee previously in discussing land reform—this follows on from Mr Thompson’s point—we can create value in revenue or capital terms only when we do something with the assets. Because we are not a trading business, we can do something with our assets only with a partner—a community, a developer, an energy company or a farmer. I have never seen those two aspects as being exclusive to each other.
We can create value in our estate and in revenue only by working in partnership, and I think that the case studies in this year’s annual report reflect the fact that what we do to invest in long-term projects creates value beyond that. I am really proud of what my team, the team in Edinburgh and the team around Scotland deliver. We are delivering a commercial return, which an act of Parliament has identified that we must do, but the wider impact of our activity is far greater through the opportunities that it enables.
There is a bit of tension, but I do not think that there is a lot of tension in those areas. Many of the activities that we engage in, whether it be the mountain biking investment in Glenlivet, which has created more jobs and a long-term tourism hub, or whether it be working with communities on local management agreements to take forward their interests, are meeting our requirements under the act but are also delivering on the ground.
Page 1 of this year’s report sets out, in fairly bold print, the statement:
“Our role is to make sure that the land and property we invest in and manage is sustainably worked, developed and enjoyed to deliver the best value over the long term.
At the heart of how we work is an astute, considered, collaborative approach that helps us create success for our business and for those we work with.”
That is the kind of mission statement that you were referring to.
Just in case we forget it, we are all issued with a little card that we carry with us that sets out our values in how we work and do our business.
Beyond what each annual report says, would it be appropriate for the Crown Estate to have a mission statement that was relevant to today? Would that be helpful in relation to the interface with communities and the public?
Yes, we could work on that. Indeed, the charter on engagement with communities that we are working on will help to reinforce that, and the toolkit that we brought with us at our appearance before the committee last year was all about getting a greater understanding of a community’s desires and helping to fulfil them. I see no issue with that idea at all.
Good morning, everyone. At last night’s meeting of the cross-party group on rural policy, we discussed the challenges facing younger people. In that respect, Claudia Beamish mentioned a social remit, and you have talked about stewardship. We also heard about the ageing population in some of the rural industries. Given that your estates cover the agriculture, forestry and farming industries, what policies and proposals have been put in place in the Crown Estate to address some of those issues?
I will kick off on that, and I am sure that Alan Laidlaw will come in later.
This issue is close to my heart, and it is all about education at all stages, particularly with regard to the offshore renewables sector. Things have evolved. We started by telling people in colleges and universities how the industry was moving forward and what would be required, but we quickly realised that many students had already made their life choices and decided where they wanted to go by the time they reached college or university.
We then began to speak to schools, particularly secondary schools, and we found that that approach had good results and that the pupils and young people were enthused about the industry. They were particularly enthusiastic because it was not an industry that they could learn about from their parents, as it was not there at that time.
We soon realised that we were creating a small industry and that we could spend for ever and a day doing that. As a result, we recently piloted in some secondary schools—one in Kirkwall in Orkney, one in Caithness and one in West Lothian—the clean energy from the sea programme, which fits into the Scottish Government’s curriculum for excellence. The programme has been well received by pupils and we are discussing with the industry and other bodies how it might be rolled out on a more nationwide basis or how it can be more broadly received.
We are keen on this work and we see it as central to how we in Scotland and the UK can derive the best benefit from these emerging industries. There is no point in our doing all this work and getting this out there only for commercial gain; we want to maximise the approach and we are keen to have as much home-grown talent as possible coming into the industries. Earlier this year, Scottish Renewables published figures showing that more than 11,000 people are already working in the industries in Scotland, and it would be good if that figure grew year on year.
The clean energy from the sea programme came out on the back of our forests for the future project, which we developed with the Forestry Commission in line with the curriculum for excellence, and it is all about opening up to wider audiences opportunities in the assets that we manage. A lot of our direct investment in our assets creates such opportunities. Aquaculture, which has just been highlighted as a growth sector, is heading towards being worth £2 billion. However, the figure that struck me in the report that the minister, Mr Wheelhouse, commented on yesterday, was the 10,000 jobs in rural areas. Those are really important jobs for remote communities.
In agriculture, the committee members who came to Glenlivet last year saw, I would suggest, a younger profile of farmer than they would have seen elsewhere precisely because investment is being made in fixed equipment and because those farmers recognise that their units are viable and progressive. When 17 or 18-year-olds are making choices, they know that they can go home to their unit, that it will be viable and that they will have a partner who will work with them.
We are trying to signpost to the opportunities for growth, which include marine tourism. This summer in particular, Scotland has basked in some great results for tourism, and the impact on young people is interesting. The only local authority area in which the 20s demographic is increasing is the area containing the Cairngorms national park. That is because adventure tourism and recreation is a core growth sector in that area and that is keeping those people there. Rather than returning to their home area at 60 to retire, people can return immediately, post-university, because there are opportunities there.
11:15Marine leisure tourism is a really great opportunity in our sector. Again, that involves working with communities and, for example, investment in new pontoon projects. Gareth Baird recently attended the opening of a new facility at Lochmaddy, which has already had a significant impact on the local community. It will bring people back because they have viable opportunities.
Gareth, do you want to say something about Lochmaddy?
There may be subsequent questions about local management agreements, but I was privileged to be at the opening of the Lochmaddy marina in North Uist, which was opened by the Princess Royal. It has been quite extraordinary. When we reported to you last year, we had one definite local management agreement in the pipeline, whereas now we have four completed LMAs and we hope that there will be 11 further LMAs in future. We are communicating on those with the local community.
It is great that Lochmaddy was the first LMA to be delivered. The outstanding feature was that there were real leaders in the community there. Gus Macaulay, who heads up Comann na Mara—the Society of the Sea—and the North Uist estate were strong in driving the LMA. The Crown Estate was able to fund a feasibility study for the new marina and we invested £414,000 in its construction.
The thing that astounded me when I went to the opening at the beginning of September was the colossal use of the marina. Yachts were turning up even before it was completed. At that stage, 300 yachts had been in, some of them from as far away as the Baltic. The tallest two-masted schooner in the world had been in and cruise ships had been coming in, without notice, to scout the area.
On the ground, the economic effect on that small community has been that the small village shop’s income has risen by £1,000 a week. The local hotel’s income has risen by £3,000 and it has converted three part-time jobs into full-time ones.
Alan Laidlaw mentioned the marine tourism industry in Scotland. As you know, we have a Scottish liaison group and we have just invited 30 stakeholders to our November meeting. With all those people, it is difficult to go into detail, so we now have sub-sector groups. We met the marine tourism group about a fortnight ago, and that industry is now worth £300 million per annum to Scotland. That figure is not known, and I was astounded to learn that it is higher than the figure for golf in Scotland.
Last year, I talked about the string of pearls and how Scotland plans its marine routes for these high-net-worth people to come in and spend money in coastal communities. The Crown Estate has helped by setting out the details in the magazine “Welcome Anchorages 2014”. The east coast is still to be done, but that work is in progress.
As Alan Laidlaw said, developing the LMA has been an extremely collaborative process and we are proud of it. On the day that Princess Anne came to open the new marina, three other communities came to Lochmaddy to ask our officers how to take their communities forward.
We will move on to another seaborne topic.
Good morning, gentlemen. It is good to see you again.
I will start with aquaculture, and fish farming in particular. We have heard in the past few years about the expansion of the industry, which makes good sense for all sorts of economic and food security reasons. I notice that you mention it in your report. Will you tell us how you see it progressing and perhaps how far you see it going?
I mentioned the report that came out yesterday. The press coverage has focused on the projection that aquaculture is moving towards becoming a £2 billion industry by 2020, with 10,000 jobs. That growth is important but, to go back to Claudia Beamish’s point about sustainable growth, there is a tension in aquaculture between food production, demand and sustainable environmental impact. A huge amount of work is going on to ensure that the industry is robust and can defend its credentials. That includes using wrasse to treat fish lice, among other sustainable methods.
There is a huge demand for quality protein and for premium products from Scotland. The growth targets are ambitious, but they are achievable. There is a real buoyancy in the industry with regard to the opportunities, but we are competing with Norway and Chile. We recently met the aquaculture sub-group, which made it clear that significant investment decisions are being taken about where to invest, that Scotland is on a pitch with other areas and that it needs to ensure that it is open for business in aquaculture.
There is an opportunity for sustainable growth. One of the interesting developments in the field concerns offshore aquaculture and how far offshore the technology can take the industry. The convener mentioned extreme weather events in your discussion with the previous panel. It is hugely challenging to put the equipment into some of the areas that we are talking about, even with all the expertise from the oil and gas industry and from engineering. We need to find the right places to grow aquaculture and the right way to do it.
The community engagement that many of the operators are conducting is far greater than it was in the past. The operators are holding community roadshows and saying, “Do you want aquaculture in your area? If you do, what should it look like?” That is a huge development. I have heard things such as, “Aquaculture arrived in the loch in the 1970s and we didn’t want it.” Those days are past, and the planning processes—such as marine spatial planning, which is winging its way towards us at present—and community engagement on terrestrial planning have meant that operators have to get things right up front.
If we can get the sustainability credentials right and keep them working, if the industry can keep doing good work in that regard and if we can get community buy-in, aquaculture has a lot of growth still to come. The value that is created in the sector, both upstream and downstream, is phenomenal. We are hopeful about that, which is why we help to invest in research and development. Aspects such as the transfer of planning responsibilities are at the crunch point at present, and we need to ensure that available sites are optimised and used.
Alex Adrian, who leads our aquaculture team and who lives in Strachur, is an industry expert and he has been working for a long time to ensure that the opportunities that present themselves are taken. Vacant sites have often been discussed, and there may be opportunities to do different things on some of them, perhaps involving trout or halibut, or shellfish rather than fin fish. There is a lot to do, but there are a lot of opportunities.
We are also working with some of the big companies to trial wave technology to power the fish farms and thereby reduce the need for diesel generators on the platforms.
Thank you for that extraordinarily comprehensive answer, which went into all the spaces that I was expecting I might have to push you towards.
When the committee was scrutinising the Aquaculture and Fisheries (Scotland) Bill, it became clear that the further aquaculture goes offshore, the more chance there is of avoiding conflict. Equally, of course, operators want to engage with the communities that will have to work there, and the environmental consequences are also obvious.
To what extent do you need the support of the Parliament or the Government to achieve some of the things that you talked so eloquently about? Do you have all the powers and the enthusiasm that you need to make things work?
Successive Governments and the Parliament have always been supportive of aquaculture. The industry welcomes that support, but it understands its responsibilities and what it has to do.
On your point about communities and offshoring, there is a difficult dynamic in that regard, because when we speak to local authorities we find that they want to ensure that economic activity is as close to home—and dry land—as possible. As part of our greater engagement with local authorities, we involved a member from the island authorities in the recent sub-group discussion. It was great to see industry talking to local authorities about their aspirations. It is also about ensuring that local areas benefit, which is quite a challenge.
You mentioned powers. Aquaculture is a well-supported industry, but there are interests that seek to fight it at every step. It is important to understand its value. In our report, there is a case study about aquaculture on Gigha and how important it is to services such as ferries and schools. I am sure that I have told the committee this before, but when a young manager was placed on an aquaculture site, the company could not understand why the community was delighted and the feedback was so exceptionally positive. It was because the manager had three kids at core ages, which was keeping the school open.
The Marine Scotland report that was produced earlier this year by Imani Development, which did our case studies, did a first-class job of identifying the impact of aquaculture and those upstream and downstream values. As long as the Parliament and parliamentarians keep that in mind and the industry keeps delivering on R and D and sustainability, aquaculture will be in a pretty good place.
Let us stick with seashore and offshore projects before we move on to land projects.
On Saturday evening, I was at the launch of the Glenmorangie Distillery Company’s Dornoch project, which is using anaerobic digestion. Excess nutrient-rich liquid is going into the Dornoch Firth to feed mussel and oyster larvae. That is not aquaculture, of course, but it is the kind of natural development in which the Crown Estate would be involved, given that it involves waters that you manage. Have you had sight of that project?
Not personally, but I know that the team is working on the approach. Shellfish farming, which some people call ranching, is still aquaculture, and it has a very high-value product. The downstream flow of nutrients for feeding aquaculture products and other uses is important, and we have been looking at it in the context of R and D. It is like macroalgae and seaweed cultivation for anaerobic digestion, which creates power and heat but also creates animal feeds, pharmaceuticals and nutrients that can go back into the system. Alex Adrian and the team have been working hard on those aspects, because there are opportunities in aquaculture to close some of the gaps that agriculture cannot easily close.
As Mr Thompson said, there is a lot of seabed out there, so there are a lot of opportunities for long-term, sustainable business streams. Seaweed cultivation is currently relatively low in intensity and it tends to involve collection rather than farming, but for the past three years we have been investing in R and D to consider how to scale up production. We could go as far as having smart grids on islands, with AD helping to produce power and heat and agricultural fertilisers and so on. There is a virtuous circle to be developed in that regard.
That brings me back to Claudia Beamish’s point about sustainability. The key challenge for us is to ensure that development is sustainable. The last thing that we want is activity on the seabed that is not sustainable or that creates havoc in communities. It is worth while to promote, invest in and follow up the new opportunities, but that has to be done correctly.
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Claudia Beamish has a question about the foreshore.
It would be helpful if the witnesses could clarify how much of the foreshore has been handed over to communities. If you do not have the figure now, perhaps you could get back to us on that. Do you have any targets on that for the future?
Gareth Baird touched on local management agreements. When we spoke last year, four were in train and we are now heading towards 16 across the areas. I have with me a small visual aid—it is hot off the press this morning, but we will send it to you—that highlights that the LMAs are predominantly in the west. However, we would dearly like some of the communities that are doing interesting stuff in the east to come forward.
We do not have a figure for the area that is involved, because each of the proposals is different. However, we are piloting foreshore sales with the Carloway Estate Trust. As I am sure some members will be aware, the trust is going through its ballot and buy-out process. When it became clear that the trust was going to be successful and before it submitted its land fund application, we went to see it and asked whether, given that some ownership will transfer with its purchase, it would consider buying and taking control of our foreshore interests in the area. The trust is going through a due diligence process, and we have helped it through that. It is looking to take a go/no-go decision and, as you would expect, it is taking the responsible approach that the decision is one for the community. It has decided to buy the land part of the asset, but it needs to know more about the foreshore. We are working with HIE and the Carloway Estate Trust on that, and I am hopeful that the process will work well, that it will progress and that it can then be rolled on beyond that.
As for the number of kilometres that we are talking about, some of the LMAs are for 10 yards of foreshore, but what they unlock is massive. We could give you an update on where we are with all those dealings, but it probably would not be an area-based report. In response to direct feedback from the committee last year about the promotion of LMAs, we went to the Community Land Scotland annual general meeting in June and held a workshop to engage with community owners on the opportunities. More than 21 community organisations and others were in the room listening to those opportunities—interest really has been awoken. I suspect that the reason why most LMAs are in the north and west is because of the make-up of the CLS membership, but we are trying to push LMAs elsewhere.
Interestingly, one or two groups whose foreshore is not owned by us have said that they could do with some help in relation to what is going on in their areas and, because of sea bed interests, we have been able to work with some of them to develop their projects, which go right from small-scale aquaculture and mussel farming to large-scale projects and pontoons. Yesterday afternoon, I had a discussion about a large-scale project on Harris that is looking to unlock a significant amount of public funding and connect Lochmaddy to what is going on.
As Gareth Baird has said, community groups are now asking to come and speak to us or are asking us to speak to them, because they have heard good things about us from other groups. I am proud that we now have local ambassadors who say, “This really worked for us—go and speak to them and they will help,” which, I think, is progress.
The second part of my question was whether you have any targets. Also, will you give a little more explanation about the nature of the agreements? Are they about handing over the management of assets to communities? Is that done on a commercial loan basis? Maybe the LMAs vary—I do not know.
You are absolutely right—they vary. An LMA is designed to be not a rigid process but almost a light-touch introduction. For example, it could lead to a full-scale lease of the foreshore and sea bed; it could lead to an investment, as is happening in Lochmaddy; or, alternatively, it could lead to nothing because the community has decided that it can do what it needs to do without that. There is no formula that says that an LMA equals lease or investment or whatever.
Some of the LMAs on the list receive funding. For example, The Glendale Trust on Skye has a small-scale development at Loch Pooltiel, and we have put £5,000 towards a feasibility study there because we think that it is a good idea. That is in its early stages, but it is in line with our investing to create value and we are happy to put the money in.
The Lochmaddy proposal was more developed. As Gareth Baird has suggested, the community was firing on all cylinders, and the fact that it had a well-developed proposal and a really robust business plan allowed us to invest. It is a commercial investment but I must point out we are different from a bank—I used to be a bank manager, but I am okay now. The investment that we set up has a risk element to us and is based on the profile of the growth that is expected. There are three years of bedding-in time to allow the project to get going. We have skin in the game, so to speak—we have taken the risk that all our investment might not be paid back—and it all involves a greater understanding and reflection of what is happening on the ground, particularly in marine leisure tourism.
As for targets, I told the committee during the land reform process that we support the local management of assets. The more we can do in line with what we are able to do, the happier I am—so we need to do as many as possible. I therefore reiterate the request that I made to you guys last year: bring us ideas from your constituencies or tell us about projects that you have seen on the ground. As has been made clear, you guys have aquaculture industry responsibilities and, given your engagement on the ground, we would be happy for you to bring us any opportunities that we have not heard about.
With regard to the foreshore issue, how detailed are your foreshore ownership records? You have mentioned the Carloway estate and I know myself that there are crofts in the Western Isles that have foreshore rights, but how detailed is that information?
It is pretty detailed and, we think, quite robust. It involves a huge number of dealings and records. With the 6km at Carloway that we are talking about, there are something like 32 agreements; the community thought that there would probably be six or so, but then we started talking about outfalls and things like that.
Our records are pretty robust and, following the land reform review group report, we committed to being active in recording land registration publicly where possible and ensuring that the information was there. I am not going to say that it is perfect but it is in pretty good order and we are working with Registers of Scotland and others to ensure that the data set is as robust as it can be.
In fact, we recently had a request for information about your constituency. A large processing plant could not establish exactly where the foreshore started and ended and where the ownerships were. Our records were able to help with that, so the information is pretty robust.
When you say “my constituency”, are you talking about Falkirk East?
I am sorry—I was talking about Grangemouth.
Given that you have robust records of these things, can you tell us whether you sold the foreshore in the 18th century to the Duke of Sutherland and others who now own vast acreages of it?
My time horizon in the Crown Estate is 10 years. I would have to defer to some of my colleagues who have been there slightly longer—although not, I should add, on the sort of time horizon that you have asked about. We can ask what the arrangements were in those areas but I would not like to comment on that at the moment.
I can understand why you would not want to comment but it would be interesting to find out whether, compared with your current behaviour and the way that you are now selling parts of the foreshore, you previously gave the foreshore away. If you could give us an answer to my question, we could see whether policy has changed over the centuries.
There has been a change. The biggest change was probably the 1961 act.
I will stay offshore for a minute. We have explored in some detail the community benefit that can be expected from marine renewables, and we have heard about your investment in the MeyGen tidal scheme and indeed the two large offshore wind farms in the Moray Firth, which are expected to go ahead. Within the total asset value that you mentioned, do you have any clearer figures for the expected income per annum from those schemes?
I am happy to try as best I can to give you an overall picture. Last year, I mentioned the figures for the offshore wind schemes, should they be built. At 2020 values, the figure for the far offshore schemes under the round 3 scenario would be about £7.6 million per gigawatt, while for the closer inshore schemes, a typical rental valuation would be about £4.3 million per gigawatt. For marine renewables, by which I mean wave and tidal, a typical rental would be about £30,000 per annum for 10 MW.
So the figures are being worked on. Are the offshore assets included in the capital value?
No. I should make a distinction between capital value and revenue. Those figures are the annual rentals that we would expect on deployment and on the things generating electricity.
Are those items now included in the Scottish figures?
Absolutely. As you will see, we have a value of £800,000 over the piece, but I have to be honest and say that the sum is not quite that because there has been some rounding up. However, it includes rental income from offshore wind, £1,000 from wave and tidal and some revenue in respect of CCS.
We look forward to updates on that, because what might become available to communities is of considerable interest to them and to us. They are looking to what is being produced offshore—and not just in the way of jobs—in the same way that they look to onshore wind developments.
I have a further question about land ownership. In the past, the Crown Estate has divested itself of certain urban properties in Scotland in order to invest in supermarket developments or whatever in other places. Are any of your properties likely to be sold in the next year?
We work to our investment strategy and look to invest in areas where we can. In my area, we are talking about some foreshore transfers, and I also have about 11 acres in various small plots on the market. If anyone is in the market for a small housing development in Moray, we have a number that are not moving as fast as we might like. However, no significant disposal discussions are being undertaken at present.
As for our wider investments, we are still investing in improving some of our urban assets and no major sales are proposed at present. We are talking about minor transfers. For example, we have previously talked about the transfer of rights over oysters and mussels to the Scottish Government, and I understand that that is now being approved, which is progress. However, there are no substantial proposals at present.
In the context of the current debates about more powers for Scotland, I would be interested to hear more from you about how the Crown Estate can and needs to change to reflect that situation. I am particularly interested in comments on the land reform review group’s suggestion that the Crown Estate commissioners’ responsibilities under the 1961 act be fully devolved to the Scottish Parliament.
11:45
It is clearly not for the Crown Estate to make any decisions on the overall strategy; that is a matter for Governments throughout the United Kingdom. We have set out to be—and I hope that we are—very engaged in discussions with the Scottish Government, local authorities, all our stakeholder communities and now the Smith commission. Our efforts are solely directed at providing all those bodies with clear facts about the Crown Estate’s activity in Scotland; it is for others to take the decisions about what happens with these assets and their on-going management.
Alan Laidlaw can say more about land reform.
I came before the committee on, I think, 4 June to discuss the LRRG report, and we said then that a lot of people are getting more of an understanding of what is and what is not part of the Crown Estate’s role. That is the key point: we need to make people understand what we do.
The map probably highlights this quite nicely, but there are areas where there is huge interest in the foreshore and the sea bed. There are also significant areas where there is zero interest. That is interesting, because we must ensure that the strategic management of the sea bed in particular is borne in mind with regard to aquaculture and marine leisure, never mind for offshore renewables and the work that Ronnie Quinn does. We need to provide the Smith commission with information for its discussions, and we have met a number of people who are participating in them to ensure that that information is readily available.
Graeme Dey has another question about your estate.
I want to investigate a fairly topical subject. Does the Crown Estate own any land or sea bed in Scotland in areas that could become the subject of shale gas extraction? If so, what is your position on fracking?
I am sure that we will own sea bed in such areas because some pretty significant lines are being drawn on maps—not, I hasten to add, by us. I am sure we will have such interests.
The offshore extraction of oil and gas is a matter for DECC.
I was thinking more of something on a coast that would go down and outwards through the sea bed. Would that impact on the Crown Estate?
It would still be a matter for DECC.
And on land?
It would be a matter for the regulators, not for us.
No, but do you have a view on the wisdom of the approach?
Yes, as far as due process, planning and community consultation and engagement are concerned. There has been a significant amount of discussion in Parliament about fracking and last year I attended a cross-party group meeting at which there were some fairly robust exchanges of view. We would follow Government guidelines and policy on such opportunities.
That would be Scottish Government policy.
Yes.
Thank you.
Thank you very much, gentlemen. We have had a good range of discussions, and you might well agree that such meetings are valuable for giving us updates. We might have many other questions to ask you as the year goes on, and we certainly hope to continue this process.
As agreed earlier, we now move into private session. However, before I close the public part of the meeting, I should say that this is the final meeting before the October recess. At our next meeting on Wednesday 29 October, the committee will take evidence on the 2013 annual report on wildlife crime from senior Police Scotland representatives and the Lord Advocate.
11:49 Meeting continued in private until 12:18.Previous
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