Introduction

One of the Smith Commission agreements was that responsibility for the management and revenues of the Crown Estate in Scotland should be devolved to the Scottish Parliament. (1)

This Agreement reflected the widespread consensus in Scotland that the management of  the Crown Estate should be devolved. There have been several inquiries into this topic over the last ten years, from the Crown Estate Review Working Group (2007) to Westminster’s Scottish Affairs Committee (2012), which also recommended the devolution of the Crown Estate in Scotland. (2)

The Smith Commission also agreed, like the Scottish Affairs Committee before it, that devolution should be followed by further decentralisation to local authorities, communities and others, of responsibilities for the various Crown property, rights and interests that make up the Crown Estate in Scotland. Both the Scottish Affairs Committee and the Smith Commission were clear, however, that this decentralisation was to take place after the devolution of the management of the Crown Estate to the Scottish Parliament. (3)

The Scotland Bill was published on the 28th May by the UK Government and is now on its hurried passage through the UK Parliament. (4) It is intended to implement the Smith Commission agreements.  Clause 31 of the Bill that deals with the Crown Estate, however, completely fails to do this and needs to be re-drafted.

But, first, some background.

The Crown Estate

The Crown Estate is the name given in the Crown Estate Act 1961 to the various Crown property, rights and interests that are managed by the Crown Estate Commissioners (CEC).  The CEC is a statutory corporation first constituted by the Crown Estate Act 1956 and now operating under the 1961 Act.  The CEC transfers its net surplus revenue or ‘profit’ each year to the UK Government’s Consolidated Fund for use in public expenditure. (5)

The CEC is thus the manager of property rights that belong to the Crown. However, there can often be confusion between the manager and the property, because the CEC has branded itself for its corporate identity as ‘The Crown Estate’.  The Treasury Committee also felt it necessary to emphasise in its report on the Crown Estate, that “the CEC are a public body charged with managing public resources for public benefit”. (6)

The Crown property, rights and interests that make up the Crown Estate in Scotland are legally and constitutionally distinct from those in the rest of the UK, because they are owned by the Crown in Scotland and defined in Scots law.  Scotland’s Crown property rights are of ancient origin and continued to be administered with their revenues in Scotland following the Union of Crowns in 1603 and the Treaty of Union in 1707.  Some of these Crown rights continue to be managed in Scotland by the Scottish Government and Crown Office. However, the administration and revenues of many of Scotland’s Crown property rights were transferred from Edinburgh to a government department in London in the 1830s.  That department and its successors, were the predecessors of the current CEC.

The Crown property rights managed by the CEC in Scotland include Scotland’s territorial seabed and Crown rights over the Scotland’s continental shelf zone (see map above), around half of Scotland’s foreshore, the right to mine gold, salmon fishings, four rural estates and two urban properties.  The Crown Estate in Scotland only accounts for around 3-4% of the value attributed to the UK wide Crown Estate and revenue produced by it. The CEC’s annual ‘profit’ from its operations in Scotland, has been around £5m in recent years. (7)

The Scotland Act 1998 devolved legislative competence over Scots property law, including Crown property rights, to the Scottish Parliament.  The first Scottish Parliament, for example, used this legislative authority to abolish the Crown’s ultimate ownership of land in Scotland under feudal tenure.  However, the reservation of the management of the Crown Estate in the Scotland Act, precludes the Scottish Parliament from being able to legislate over the rights managed by the CEC and also means that the CEC is not accountable to either the Scottish Parliament and Government for its operations in Scotland. Implementing the Smith Agreement would complete the devolution process started in 1999 and bring the rights and the management together under the legislative competence of the Scottish Parliament.

The Scotland Bill

The Smith Agreement to devolve the management and revenues of the Crown’s property rights should be straightforward to implement in legislation.

The two main requirements are to amend the Scotland Act 1998, Schedule 5 Part 1 by;

1. removing clause 2(3) that reserves the management of the Crown Estate in Scotland and,

2. removing clause 3(3)(a) that reserves the revenue from the Crown Estate in Scotland.

Removing these two reservations would mean that responsibility for managing the Crown property rights that currently make up the Crown Estate in Scotland, automatically falls to the Scottish Parliament.

Appropriate legislation also needs to cover some consequential amendments to other legislation, in particular to the Crown Estate Act 1961 to reflect that it would no longer apply in Scotland.  In addition, the legislation requires some procedural provisions dealing with the transfer date and process.

Unfortunately, clause 31 in the Scotland Bill manifestly does not implement the Smith Agreement.  The clause does not devolve the responsibility for the management of the Crown Estate in Scotland to the Scottish Parliament. Instead, the clause delegates existing functions of the CEC as a statutory corporation to Scottish Ministers or others transferees through a Treasury ‘scheme’.

The current clause 31 attempts to enable the CEC to continue to operate in Scotland and to bind those to whom functions are transferred to the restrictive terms of the Crown Estate Act 1961 under which the CEC operates.  The clause’s provisions to try to achieve this are, as others have commented, complex and unclear. (8) They are a recipe for confusion and legal anomalies.  They do not devolve legislative responsibility over the Crown property rights and revenues involved in Scotland to the Scottish Parliament and will frustrate the widespread consensus for the further decentralisation of these within Scotland. (9)

Re-framing Clause 31

The Smith Agreement to devolve responsibility over the Crown Estate in Scotland reflects the longstanding agreement in Scotland over this matter and it should be straightforward to implement through the Scotland Bill.  Why then does the existing clause 31 fail to do this?

This blog argues that this current state of affairs has arisen because of the degree of influence that the CEC has had on the nature of clause 31. The sequence of Committee inquiries and reports into the operations of the CEC show how CEC corporate policies have been aimed at maintaining it as a UK organisation.  IN 1998, the CEC declined to participate in the devolution process in the way that the Forestry Commissioners did (and have continued to do).  The starkest example, however, was in 2001/02 when, against the flow of devolution, the CEC ended its management of the Crown Estate in Scotland as a separate management unit with its own manager and financial accounts, so that the CEC could assimilate its operations in Scotland into those in the rest of the UK. (10) The current clause 31 with its stretching and twisting of the Crown Estate Act 1961, can be seen as the CEC’s latest move to try to retain the Crown Estate as a UK wide estate.

Furthermore, it is distressing to note the continuing mis-understanding of what exactly the Smith Commission agreed. For example, a briefing issued by the Scottish Parliament, claims that it is the “powers of the Crown Estate Commissioners [which are set out in the 1961 Act] which would be transferred to Scottish Ministers.” (11)

This is wrong.

The Smith Agreement patently does not say this. It says that responsibility for management will be devolved to the Scottish Parliament. That is an entirely different matter from a mere delegation of functions to be exercised within the framework of continuing reserved powers.

The Scottish Government’s initial response to the Scotland Bill recognises the need to re-frame clause 31, so that the clause removes the reservations in the Scotland Act 1998 over the management and revenues of the Crown property rights in Scotland forming part of the Crown Estate. (12) The terms of the Scottish Government’s proposed alternative clause 31 still suffers from some other weaknesses. However, it is to be hoped that all the parties involved in the Smith Commission will recognise that the issues over clause 31 are not party political.

Solving this problem is a simple matter of re-framing the clause in a competent was so as to implement the Smith Agreement in as straightforward a manner as possible.

  1. Smith Commission page 16
  2. See Crown Estate Review Working Group Report and Scottish Affairs Committee Report.
  3. See, for example, Lord Smith’s evidence to Scottish Affairs Committee 3 December 2014. Q137-Q140
  4. Scotland Bill
  5. Section 1(2) Civil List Act 1952
  6. House of Commons Treasury Committee Report, 2010 para 10
  7. Scottish Affairs Committee Report para 39
  8. See Devolution (Further Powers) Committee report
  9. For example, the Bill amends the Civil List Act 1952 to obligate the payment of all Crown revenues to the Scottish Consolidated Fund. Decentralisation to, for example, to harbour trusts will be constrained by a continuing legal constraint to hand over all revenues to the Scottish Government.
  10. Scottish Affairs Committee Report para 21
  11. See SPICE/Clerks/Legal Briefing page 15 “Provision has been made to amend the Crown Estate Act 1961 to reflect the new role for Scottish Ministers (SMs), but to retain the requirement to manage and improve etc the property, rights and interests being transferred subject to the remaining provisions of the Crown Estate Act 1961. This reflects the Smith Commission recommendation that it would be the powers of the Crown Estate Commissioners [which are set out in the 1961 Act] which would be transferred to Scottish Ministers.”
  12. See Scottish Government alternative clause, pages 12-13 and 43

OTHER DOCUMENTS

House of Commons Library Briefing on Scotland Bill

 

Image: Map of Applecross Estate

Proposal 6 in the Scottish Government’s consultation paper on land reform (see link here) is to introduce a statutory duty of community engagement on charitable bodies that own land. There are four main types of charitable bodies that own land and property.

1. Environmental charities such as the National Trust for Scotland, Scottish Wildlife Trust and Royal Society for the Protection of Birds;

2. Educational bodies such as universities, colleges and private schools;

3. Community bodies that own anything from a village hall to large estates such as South Uist, Assynt and Knoydart; and

4. Landed estates formerly owned by private individuals that have been transferred into charitable company and trusts. These include estates of Applecross, Isle of Bute, Drummond Estate, much of Atholl Estate and Conchra Estate.

Environmental and community bodies have reacted to the proposal with irritation, claiming that they already engage with communities. Likewise with community bodies which already have membership open to all who live in the community and are run by boards of directors elected by the community.

In a blog on the Scottish Community Woodlands Association website, Jon Hollingdale makes the case that imposing such a duty across the board is an over-reaction to a problem which is quite modest in scale.

If the issue is with the tiny cohort of private Scottish charities whose landholdings give them a local monopoly, then, rather than imposing general burdens on all, the smart answer is to take another look at the charitable status of these organisations.”

There are a number of charitable bodies that were set up by previous private owners (often for tax purposes) and which, today, own quite large landholdings. Typically, the membership is restricted to a fixed number and with special appointment rights in the hands of the former owner.

For example, the Mount Stuart Trust owns 23,800 acres of the Isle of Bute. It was set up by the 6th Marquess of Bute in 1985 as a charitable trust and incorporated as a company limited by guarantee with no share capital in May 1989.

Under Article 21.1.2 of the Articles of Association of the company, the Marquess of Bute has the power to appoint up to four Directors even though he himself is not a member, a tax-exile and non-resident in the UK.

The Applecross Estate extends to 61,600 acres in Wester Ross. It was bought by the Wills tobacco family in 1929 and is owned today by the Applecross Trust, a company limited by guarantee with no share capital. Back in 1978, the Wills family were worried about the impact of capital transfer tax and, to avoid exposure to it, decided to transfer the estate into a charitable body. As they noted in a letter to residents at the time,

It continues,

Copy of full letter here (2Mb pdf)

Today, the estate is still owned by the Trust and its membership is still associated with the Wills family, Richard Wills being the current Chair of the Board. None of the board members lives in Applecross.

In 2012, around 100 people applied as part of the Land Action Scotland campaign to become members of the two charities the, Mount Stuart Trust and Applecross Trust. All applications were refused. The Applecross Trust response is outlined here & a media report here.

Many local people in Applecross would like to become members of the Trust and play an active role in the management of the estate. The peninsular is very rural and has a fragile economy. Development to retain and create jobs is vital and yet the trust’s charitable objectives are restricted to preservation, environmental protection and amenity, public access and the advancement of education, arts, heritage, culture and science.

This makes it difficult, for example to develop housing since the charitable objectives do not include economic development and thus any sale of land has to be at open market value which is beyond the reach of most local people.

Meanwhile, the Chair, Mr Richard Wills, through a partnership of which he is a member (Deer Management Consultants), rents the deer stalking on the estate. The rent is negotiated on an independent basis with no involvement from Mr Wills. Similarly, Mr Wills rents Applecross House (pictured above) and fishings in the Applecross River for £10,200 per year from 2014-2029. When not at his country house in Applecross, Mr Wills lives in a large country house in Hampshire (pictured below)

Despite the independent arms length negotiation, it is open to question whether these rents represent the best that can be obtained on behalf of the charity in the market. Other similar country houses are available on estates in the region for between £2000 and £2800 per week. Applecross Estate rents the Applecross Manse (sleeps 7) for £1080 per week on the open holiday lets market.

The question raised by the consultation is whether these estates should continue to be owned and managed by charitable bodies that restrict membership to a few members of family and friends, provide exclusive nomination rights for tax-exiles such as the Marquess of Bute, but yet refuse to allow the beneficiaries of the charities – the local population – any right to become members or Directors of the respective company boards. The Applecross Trust even has a vacant on its Board following the resignation of Charles Peregrine Albermarle Bertie in December 2012. But it remains unfilled.

I think it is time to open up these closed shops, review their governance and allow the wider community to have the opportunity to have a stake in the future of their community.

In this article, entitled Hjorteviltforvaltning i Norge (Deer management in Norway), Dr. Duncan Halley and Dr. Erling Solberg of the Norwegian Institute for Nature Research describe the framework for deer management and wildlife management in Norway.

Dr. Duncan Halley was born and educated in Scotland. He moved to Norway in 1993, where he works on wildlife management, restoration ecology, and Scotland/Norway landscape management comparisons. Dr. Erling Solberg is a leading researcher on deer management in Norway and an active hunter. They are research ecologists at the Norwegian Institute for Nature Research (NINA), Norway’s leading applied ecology institute (www.nina.no). Contact: duncan.halley@nina.no 

The Scottish Government’s proposed land reform bill contains a very modest proposal for improving the democratic accountability in relation to the management of this public resource by private interests. To achieve a wildlife management system fit for the 21st century, however, more fundamental reform is needed. The Norwegian experience offers some insight into what might be involved.

Guest Blog by Duncan Halley & Erling Solberg, Norwegian Institute for Nature Research

Land Reform legislation in 2015 will include strengthened powers to allow the authorities to regulate deer populations in Scotland. Further action is promised from 2016 if the current voluntary system “has not produced a step change in the delivery of effective deer management”.

It seems likely that action would follow the precedent set in the recent Wild Fisheries Review, where the remit was to:

“develop and promote a modern, evidence-based management system for wild fisheries fit for purpose in the 21st century, and capable of responding to the changing environment”;

and

“manage, conserve and develop our wild fisheries to maximise the sustainable benefit of Scotland’s wild fish resources to the country as a whole and particularly to rural areas”.

Here we present a brief look at what a modern system, functioning not far from Scotland, can look like. South West Norway is on the same latitude as Northern Scotland and is similar in landforms and climate – hilly to mountainous and highly oceanic. The deer resource in the region is mainly red and roe deer, though there are also some moose and reindeer. (1) Here we discuss the system as it applies to red and roe deer.

Landowners in Norway, as in Scotland, do not own the wildlife on their land but do own the hunting rights to game animals such as red and roe deer, and the carcasses that legal hunting produces. These rights can be, and in many cases are, sold.

Modern deer management in Norway is the result of development and refinement over many decades. The core of the system is a partnership of government, landowners, and hunters, each with a defined role. This is backed by professional wildlife management skills, monitoring of harvests and populations to provide high quality data for future management, and binding harvest management plans which regulate and maintain population levels of the national game resource in accordance with democratically accountable national, regional and local goals. This has included in some regions managed reductions in populations to ensure natural forest regeneration (which local and regional authorities are required to plan for, and landowners to achieve, see below).

The system has been effective in managing the resource at sustainable levels, which take into account wider environmental, social and economic interests. It enjoys broad public support.

The government has been keen to encourage a market for wild game meat. Food Safety Authority regulations for sale of meat on the open market by hunting rights owners, hunting teams, and/or individual hunters are simple and the system efficient. This has considerably expanded the market, to the benefit of hunting rights owners, hunters, and consumers.

Image: Hunting in Norway (Erling Solberg)

Who does what?

The Norwegian Environment Agency oversees the regulation of the system. It determines and finances research and monitoring requirements and determines the normal hunting seasons.

The Regional authorities (fylkeskommuner) are responsible for building management competence at local level among Municipalities (kommuner) and landowners, for guidance on population management at a regional level in accordance with wider societal goals such as biodiversity, prevention of overgrazing, and road safety; and for overseeing coordination among hunting rights owners and local councils to attain regional management goals. (2)

Municipalities (kommuner) have the authority and responsibility for managing local harvest levels in accordance with overall regional goals and with directing harvest levels at a local level with regard to minimizing conflicts with e.g. traffic safety, biodiversity, woodland regeneration, agriculture, and public enjoyment of nature. They issue the final harvest permits, can extend the usual hunting season, and must report permit levels and actual harvests to the National Deer Register. They may also report results of local monitoring. Section 9 of the Forest Law of 2005 mandates that Municipalities (kommuner) investigate deer damage to woodland regeneration and incorporate this in harvest management planning.

The owners of hunting rights are responsible for population regulation through a binding harvest plan for the hunting beat (vald), a defined area of land for which a named individual is responsible for relations with the authorities; and for coordination with neighbouring beats. They must also comply with Section 6 of the Forest Law of 2005, which requires satisfactory levels of woodland regeneration following any harvest of wood.

The police and National Nature Inspectorate have a legal right to inspect hunters in the field (to check licences, etc.), which may be delegated to Municipality (kommune) hunting monitors. Municipalities (kommuner) can require that harvested deer are brought to designated points for inspection.

Setting Harvest levels

Data on deer populations is collected centrally and maintained by the National Deer Register (www.hjortevilt.no) on a public internet database. This data, and the population plan submitted by the hunting rights owner, is the basis for determining harvest permit levels for each beat. Deer may not be hunted without a harvest permit.

Permits are issued by the Municipalities (kommuner) to the hunting rights owner, based on the tools available at the National Deer Register website, local consultations, and the population management plan for the beat submitted by the owner.

A population management plan for up to 5 years ahead (may be for a shorter period) is obligatory and can be for one or more (contiguous) beats. It must specify annual harvests (stags and hinds by age group), often in the form of a minimum % of younger animals and a maximum of older ones. The authorities must approve these plans, and in particular must ensure harvest levels are in accordance with local, regional and national population management goals. Approval can be withheld for not being compatible with, or withdrawn for failure to achieve in practice, these goals.

In the absence of an approved plan the Municipality (kommune) sets a harvest quota in accordance with local and regional and national population management goals.

Image: Hunting in Norway. Taking a meal break (Erling Solberg)

Using harvest permits

The owner of the hunting rights may use him/herself, give away, or sell any part or all of the permitted offtake in a free market. Typically, the sale of hunting rights is financially structured by the owner in a way that gives a strong incentive to achieve the required offtake, as the owner remains legally responsible for achieving offtake levels.

Reporting requirements

Each hunting beat must report annually offtake levels broken down by age and sex, within 14 days of the end of the hunting season. These are publically available in the National Deer Register.

The hunter individually must also, when required by the authorities, report the number, age, and sex of harvested deer; report total numbers of deer seen; and provide specified animal parts (typically one side of the lower jaw) for verification of harvest levels, population monitoring, and research purposes.

Training requirements

All hunters resident in Norway must pass a written exam on hunting law and regulation, reporting requirements, species identification, and firearms safety to obtain a hunter’s licence. They must also pass a test of shooting accuracy every year at an approved firing range.

Non-resident hunters may hunt if they can produce equivalent qualifications from their home country.

Image: Grouse shooting and fishing for char and trout (Erling Solberg)

Financing the system

To hunt in Norway a hunter must purchase an annual Hunter’s Fee Card from the central government. This is separate from any fees paid to the owner of hunting rights. Hunters also pay tag fees for each red deer harvested to the Municipality (kommune). There is no tag fee for roe deer. The revenue generated is dedicated to running the management system and to support local game promotional projects.

Norway is of course socially different to Scotland, and has had a different institutional history. Introducing a modern system of deer management would have to take this into account. However, the principle of managing a public resource for the common good through a democratically accountable system, on the basis of solid information on actual populations and on the population levels which will maximize that common good, and where landowners have the right to the offtake determined and the responsibility for achieving it, is fully transferable. A system attaining these goals and enjoying broad public support is achievable, and can be achieved.

A working example can be seen an hour’s flight from Scotland.

NOTES

(1) Moose were native to Scotland. It is probable that reindeer became extinct naturally, as suitable habitat is restricted for climatic reasons.

(2) There is a two tier system of local government in Norway in some ways analogous to the former Scottish Regional/District system. The powers at each level are more extensive than was the case in Scotland. Municipalities have an average population of 11,800 compared to 163,000 per local authority in Scotland.