There is a lot of complete nonsense being spun in the media today about the alleged refusal of Scotland to contribute to the financial support of the Royal family. Front page splashes on the Times and the Telegraph has been gleefully picked up by broadcasters and others. The population has now been led to believe that Nicola Sturgeon and the Scottish Government are somehow snubbing the Queen and refusing to pay a fair share of the costs of maintaining her in the style to which she is accustomed,
We have been here before.
Last December, the journalist Hamish Macdonnell spun stories in the Daily Mail and the Spectator. I debunked them here.
So what are the facts?
The Crown Estate is public land and the Crown Estate Commissioners a statutory corporation responsible for managing the Crown Estate. The net revenues from the Crown Estate are public revenues which are currently paid to HM Treasury.
The Royal Family is financed by through a Sovereign Grant established under the Sovereign Grant Act 2011. Section 1 of the Act provides that the Grant is paid by the Treasury each year from funds voted by Parliament (the UK Parliament).
The Scottish Government has no responsibility whatsoever to provide any funding for the Royal Family since it is a reserved matter. Scottish taxpayers pay towards the Sovereign Grant in the same way as they contribute to all areas of reserved expenditure.
The sum of money comprising the Grant is calculated by reference to the net surplus revenue paid to the Treasury by the Crown Estate Commissioners. The first step in the calculation (Section 6 of the Act) is to calculate 15% of the revenue in the financial year two years prior.
The money is not paid directly from the net Crown Estate revenues. That would be illegal. The Crown Estate revenues are merely used as a reference point. Other reference points could (and should have) been used.
I suggested at the time the Bill was rushed through Parliament (see here and here) that the profits of the Stilton cheese industry might be a candidate. Ian Davidson MP suggested GDP. George Osborne himself said “I completely accept that I could have brought other mechanisms before the House, but the Crown Estate is a large commercial property company that is run in a pretty conservative way. It is not a bad proxy for how the country and the economy are doing.”
With the proposed devolution of the management and revenues of the Crown Estate in Scotland the net profits remitted to the Treasury will shrink slighty from any given base and thus the 15% will reduce very slightly (Scotland only contributes around 3% of the net revenue).
The UK Parliament and the Treasury are free at any time to alter the formula and the Smith Commission recognised that it might be necessary. Indeed, a statutory review is due in April 2016. The problem they have at the moment is in fact that the Sovereign grant has grown faster than expected due to the London property market and George Osborne and the Royal Trustees are busy negotiating a reduction in the Grant.
The Palace official who briefed the media would, in a more distant age, probably have been taken out and shot. Quite why the Palace wants to pick an entirely unfounded and counter-productive attack on the Scottish Government is not clear.
Meanwhile, confusion reigns at precisely the moment when, with the Scotland Bill being debate in Parliament, we need calm negotiation.
Buckingham Palace has released a statement as follows.
“Sir Alan Reid Keeper of the Privy Purse said today: “Yesterday’s media briefing on the Sovereign Grant report 2014-15 was intended to highlight some of the issues that may arise when the first review of the Sovereign Grant begins in April next year. The comments and observations were about a principle and never intended to be a criticism of Scotland or of the First Minister or to suggest that the First Minister had cast doubt on the continued funding of the Monarchy.
The principle is about what happens if profits from certain Crown Estate assets, such as those in Scotland, are not paid to the Treasury and the impact that may have on the calculation of the Sovereign Grant in future years. This question will form part of next year’s review.
As we made clear at the briefing, Scotland contributes in many ways to the Treasury’s consolidated fund – out of which the Sovereign Grant is paid. We said explicitly that to imply Scotland would not pay for the Monarchy was simply wrong and we accept unreservedly the assurances of the Scottish Government that the Sovereign Grant will not be cut as a result of devolution of the Crown Estate.”
The provisions in the Scotland Bill for the devolution of the management of the Crown Estate in Scotland are complex and unclear (see previous blog for background).
Last week, the Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee (RACCE) heard evidence from representatives of the Crown Estate Commissioners (CEC) and some significant points came up. (1) Here are my latest thoughts on why Clause 31 of the Scotland Bill fails to implement the Smith Agreement on this topic.
In 1999, Crown property rights were devolved under the Scotland Act 1998. However, the management and revenues were reserved and remained under the control of the CEC. The Smith Agreement is to devolve the management and the revenues. To achieve this is straightforward. The two reservations (of management and of revenues) in Schedule 5 of the 1998 Act need to be removed.
Once these removals take effect, the responsibility for the management and revenues of the Scottish Crown property, rights and interests that currently make up the Crown Estate in Scotland would fall by default to the Scottish Parliament and Scottish Government. While Scottish Ministers would need to put in place the necessary administrative arrangements to deal with these new responsibilities, there is no need for any further legislation. Once this has happened, the Scottish Parliament can begin the process of decentralisation (to which all political parties are committed) and some of which will require legislation to put into effect.
In contrast with that approach, the Scotland Bill provides for a “transfer scheme” whereby functions of the CEC may be transferred to a transferee in Scotland and continue to be governed by a modified Crown Estate Act 1961, until such time as the Scottish Parliament determines otherwise. One of those giving evidence to RACCE was Rob Booth, the Head of Legal at the CEC. He said, in response to a question that,
“The position after the transfer date will be that the Crown Estate Act 1961 will be applied as a fallback, to fill a potential vacuum. At the transfer date, if no Scottish legislation has been brought forward to set up the structure to take on the new role, a modified version of the 1961 act will be applied as an interim measure until Scotland has had an opportunity to pass that legislation.
In my reading of the Scotland Bill, it is not anticipated that there will be an on-going application of those 1961 act principles to management in Scotland. After the transfer date, as things stand, the 1961 act will apply only to the Crown estate in the rest of the UK, so Scotland will have freedom as far that particular aspect is concerned.” (2)
In other words, the Scotland Bill would remove the Schedule 5 reservation on management (we will deal with revenues shortly) but rather than keeping things straightforward as outlined above, Clause 31 would put in place a Treasury transfer scheme which binds nominated transferees into a legal framework governed by the Crown Estate Act and which needs to be undone by the Scottish Parliament if and when it wishes to do so in relation to the various Crown property rights and interests involved.
It remains unclear why this added complexity is necessary. Four other aspects remain unclear.
The first is the question of the revenues. It is now clear that the Scotland Bill will not devolve the revenues. Instead, it amends the Civil List Act to the effect that all revenues will be paid to the Scottish Consolidated Fund. The reservation in Schedule 5 remains in place, however, and so it will be incompetent for the Scottish Parliament to make any change to this arrangement. This, in effect, makes decentralisation very problematic. The promise that the First Minister, Nicola Sturgeon made in Orkney two weeks ago, that “coastal and island councils will benefit from 100 per cent of the net revenue generated in their area from activities within 12 miles of the shore” is made rather difficult if all of the revenue has, by law, to flow to the Scottish Consolidated Fund. (3)
The second matter relates to the idea that, after devolution, the CEC will continue to be able to acquire land in Scotland. This is legally incompetent. The CEC does not acquire land or property interest in its own behalf but does so on behalf of the Crown. Constitutionally and legally, the Crown is a distinct entity in Scotland from the rest of the UK. Were the CEC to acquire, say a shopping centre in Scotland in 5 years time, it would be owned by the Crown in Scots law but acquired from revenue derived from the English Crown. Constitutional experts will be better placed to address this question than I but I do not think this is constitutionally possible.
Thirdly, the Scotland Bill at Clause 31(10) stipulates that any management of Crown property in Scotland shall maintain the property, rights and interests as “an estate in land”. Rob Booth described this as “a fundamental founding principle of the Crown Estate”. (4) But after devolution there will be no Crown Estate in Scotland (the term will only apply outside Scotland). Crown property rights have been devolved since 1999 and this constraint represents a reversal of the current competence of the Scottish Parliament for no good reason.
Finally, the Fort Kinnaird retail park in the east of Edinburgh will not be included in the devolved settlement. Rob Booth explained this in the following terms.
“As a lawyer reading the Smith proposals, I can see that Smith talked about Crown Estate economic assets in Scotland being devolved to Scottish ministers. There is a statutory definition in section 1(1) of the Crown Estate Act 1961 of what the Crown estate is, which is those assets that are managed by the Crown Estate Commissioners. Fort Kinnaird undoubtedly is an economic asset in Scotland, but we do not manage it. The underlying asset is not owned by the Crown; therefore, to my mind as a lawyer, it does not fit the definition of a Crown Estate economic asset in Scotland as described by the Smith report.” (5)
Fort Kinnaird is owned by a partnership – The Gibraltar Limited Partnership. In Scots law a partnership is a legal entity and may own property in its own right. The Gibraltar Partnership, however, is governed by English law, specifically the Limited Partnership Act of 1907. Such partnerships are not legal entities and it is the partners that are the legal owners of the property. There are two partners in the Partnership – the CEC on behalf of the Crown and the Hercules Unit Trust. Since Fort Kinnaird is in Scotland, the interest that the CEC has is an interest owned by the Scottish Crown. (6)
Rob Booth’s explanation is unconvincing, disingenuous and wrong. The underlying asset (the interest) is owned by the Crown, the CEC manages that interest, and it does therefore form part of the Crown Estate.
To conclude, the Scotland Bill does not implement the Smith Agreement. Instead it creates a complex and incoherent muddle where there should, instead, be clarity and simplicity. The Scotland Bill is about devolving further powers to the Scottish Parliament. That is achieved by removing the two key reservations. That’s all, in essence, that it needs to do (although there are minor consequential amendments) and it doesn’t even achieve that. In the Committee stage of the Bill on 29 June 2015, MPs should ensure that it does.
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.
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.
Scottish Affairs Committee Report para 21
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.”
On Thursday this week, the Devolution (Further Powers) Committee will take evidence on the Smith Commission proposals to devolve responsibility for the administration and management of the property, rights and interests that comprise the Crown Estate in Scotland (paras 32-25 of the Smith Commission report). (1) With the property rights of the Crown already devolved under the Scotland Act 1998 and with other Crown property rights already administered by the Crown Office in Edinburgh, this should complete the full devolution of the Crown’s property, rights and interests in Scotland. (2)
Unfortunately, the Command Paper (Scotland in the UK: an enduring settlement) published in January, recommends a complex “transfer scheme” whereby the functions of the Crown Estate Commissioners (CEC) will be devolved. It also recommends that the CEC be able to continue to acquire property in Scotland – a proposal that is a recipe for confusion and chaos.
All that is required to implement the Smith Commission proposals is a series of simple legislative amendments to the Scotland Acts of 1998 and 2012 and the Crown Estate Act 1961 – all to the effect that the CEC no longer operate in Scotland, that the Scottish Parliament has full legislative competence over Crown land in Scotland and that statutory responsibility for exercising the function of the CEC is henceforth vested in Scottish Ministers. A discussion and debate can then take place in Scotland as to how to implement a programme of decentralisation – a recommendation endorsed by all the political parties represented on the Smith Commission as reflected in paragraph 33 of its final report.
I have outlined my full views in written evidence if you are interested in further detail. Meanwhile, I look forward to giving evidence to the Committee on Thursday.
(2) The Crown’s property rights are devolved under Section 3(1) of Schedule 5 of the Scotland Act 1998. The Crown’s property rights that are already administered in Scotland are those under the control of the Queen’s and Lord Treasurer’s Remembrancer whose revenues have been paid into the Scottish Consolidated Fund since devolution in 1999.
Yesterday’s Scottish Edition of the Mail on Sunday carried a front page splash claiming that Nicola Sturgeon was refusing to contribute to the costs of running the Royal Family. An editorial then provided further condemnation of the First Minister’s “plan to stop funding the Royal Family’s Sovereign Grant”. The piece was written by Hamish MacDonell, a journalist whose standards of journalism I questioned in March 2013 over another piece written for the Daily Mail.
I described Sunday’s story on twitter as “a dung heap of unadulterated, fabricated crap”.
Today, Macdonell recycles the same rubbish in an article on the Spectator’s Coffee House blog claiming that Nicola Sturgeon is “picking a fight with the Queen”. Every paragraph of this article is strewn with errors, smears and downright untruths.
Historically the costs of the Royal Family was met from the Civil List – a sum of money voted by Parliament. In 2011, this arrangement was replaced by the Sovereign Grant under the terms of the Sovereign Grant Act 2011 (see previous blogs here and here in which I criticise this act and predict the problems it will cause). The Act provides that an annual grant be made to the Queen from the Treasury [s.1(1)] with funds provided by Parliament [s.1(6)]. Section 6 provides that the annual amount be calculated with reference to the annual net surplus of the Crown Estate beginning with a sum equivalent to 15%. The latest report from the Royal Trustees on the Sovereign Grant was published last week.
The Smith Commission recommended that responsibility for the Crown Estate be devolved and that the Crown Estate Commissioners no longer have any jurisdiction in Scotland. It also noted (para. 35) that the “responsibility for financing the Sovereign grant will need to reflect this revised settlement for the Crown Estate.”
Here are the facts that any competent journalist who is not engaged in a smear campaign should be able to establish.
1. The Crown Estate revenues do not finance the Royal Household. They merely provide a benchmark against which the Sovereign grant is calculated. The grant is paid out of funds voted by Parliament. (1)
2. The financing of the Royal Household is a reserved matter and neither Nicola Sturgeon, the Scottish Government or the Scottish Parliament have any responsibility whatsoever for it. There are no proposals in the Smith Commission or anywhere else to change this.
3. The Smith Commission notes the issue in relation to the Sovereign Grant because once the Crown Estate is devolved, the revenues of the Crown Estate that are remitted to HM Treasury will suffer a one-off reduction by the amount of the revenues generated from Scotland. Such an adjustment will presumably be made by altering the 15% figure to a slightly higher figure and the Sovereign Grant will continue to be paid by the Treasury from funds voted by the UK Parliament as it is now.
None of this has got anything to do with the Scottish Government. There is no snub and no refusal to do anything for the simple reason that the financing of the Royal Household is and continues to be a reserved matter.
I understand the Daily Mail publishing this rubbish – very little of that it reports bears much relation to reality.
I am more disappointed that the Spectator magazine allowed such a dung heap of unadulterated, fabricated crap be published in what is a high quality current affairs magazine.
(1) George Osborne himself noted in Parliament that the Crown Estate revenues are merely “not a bad proxy for how the economy and the economy are doing”. See blog in which I argue that one might as well link the Sovereign Grant to the profits of the stilton cheese industry.
I have not had the time to submit any very full-some submission to the Smith Commission on further devolution but I did send the following email today. I would also commend readers to the submission by the Scottish Trades Union Congress which is particularly sharp on the kinds of tools needed to develop a prosperous and fair society in Scotland.
Dear Lord Smith,
There are two specific powers which I would like to see form part of a further suite of devolved powers to the Scottish Parliament.
The Crown Estate
I have argued on many occasions that the Crown Estate Commissioners should have no role in Scotland. Evidence presented to the UK Treasury Committee, Scotland Bill Committee and Scottish Affairs Committee can be found here at the foot of the page.
The Crown Estate is a public estate and it’s administration and management should (like all other public land in Scotland) be within the legislative competence of the Scottish Parliament.
This can be achieved by repealing Section 2(3) of Schedule 5 (Part 1) of the Scotland Act 1998.
Honours and Dignities
To promote a more equal Scotland it is no longer appropriate in my view that there be an official order of precedence in Scotland. I would like to see the abolition of almost all honours and dignities. Others may take a different view. To enable such a debate to take place, the system of honours and dignities should be devolved.
This can be achieved by repealing Section 2(2) of Schedule 5 (Part 1) of the Scotland Act 1998.
Today, Scottish Labour published “Together We Can” – a document outlining its vision for the future of Scotland. This follows the publication of its Devolution Commission (2.1Mb pdf) proposals on Wednesday – see my blog on that in relation to the proposals on the Crown Estate which I still don’t understand.
Anyway, today’s document has some interesting things to say about how Scottish Labour sees the land reform agenda in the years to come and I reproduce the relevant extract here in full from page 44. It includes a statement on the Crown Estate.
“Alongside promoting safe and secure communities, we want people to have more ownership of them. Under the last Labour-led Scottish Government, we began the process of giving our communities their land back.
Community ownership of assets is a powerful vehicle not just to tackle social injustice and inequality, but also to deliver economic growth. It gives power to the people and allows them to transform their communities.
The Isle of Gigha is a fantastic example of how community ownership can transform an area’s future. The people who live there are building new homes, developing renewable energy schemes and reversing population decline. Together, they are breathing new life into their community.
The 2003 Land Reform Act, which gave rural communities the right to buy land in their neighbourhood, has allowed remarkable progress to be made, with almost half a million acres now in community ownership.
Despite that, Scotland’s land ownership patterns are significantly out of line with what is the norm in most of Europe. It is shocking that just 16 owners possess 10% of Scotland’s land, and get tax breaks for the privilege. If we want to have any real hope of changing the current pattern of land ownership in Scotland then we have to be bold and radical.
Scottish Labour will commit to extend rights for the community to buy land across Scotland. If it is in the public interest for communities to own their land, then they should have the right to buy it, even when the landowner is not a willing seller – that is a power worth having.
Just as community-owned renewable energy schemes work in rural areas, the same principle can work in urban communities. We believe in a community’s right to own land and assets, and they also have the right to enjoy them. Scotland’s stunning landscape and fascinating wildlife are some of our country’s best assets, and the success of our two National parks, in the Cairngorms and Loch Lomond and The Trossachs show that they can bring economic benefits as well as environmental ones. We will explore how best to build on this success in those parts of Scotland where national parks could work.
In addition, we are convinced of the strong case that has been made to devolve the administration and revenue of the Crown property and rights and interests in Scotland, which are currently managed as part of the Crown Estate. This would ensure that the Crown Estates expertise and capital would assist local communities to manage and develop the seabed and foreshore.”
Exactly two years ago today, the Scottish Affairs Committee of the House of Commons published its report on the future of the Crown Estate in Scotland. Its conclusions were unequivocal. The responsibilities of the Crown Estate Commissioners in Scotland (CEC) should be ended and, subject to agreement on a scheme of devolution to the local level, the administration and management of the Crown Estate should be devolved. This recommendation was based upon the first comprehensive inquiry into the matter since the CEC was formed in 1956. Earlier this month, the Committee re-iterated its original findings in this follow-up report.
Yesterday, the Scottish Labour Party published its Devolution Commission proposals (2.1Mb pdf) on further devolution of powers from Westminster to Scotland. Here is what is said about the Crown Estate (on pages 239-240).
602. Another area where it has been suggested scope for devolution to local authorities exists is in regard to the Crown Estate. In March 2012, the House of Commons Scottish Affairs Select Committee published a report on the Crown Estate Commissioners’ (CECs) management of the Crown property, rights and interests which make up the Crown Estate in Scotland. The Committee concluded: “at best, the organisation [CEC] has a fundamental misunderstanding of the needs and interests of local communities and indigenous industries on the Scottish coast … At worst, it behaves as an absentee landlord or tax collector which does not re-invest to any significant extent in the sectors and communities from which it derives income”. Accordingly, it was recommended that the administration and revenues of the ancient Crown property, rights and interests in Scotland, which are currently managed as part of the Crown Estate (including the seabed and the foreshore) should be devolved then decentralised as far as possible to local authorities and local communities, with devolution to the Scottish Parliament conditional upon an agreement between the Secretary of State for Scotland and the Scottish Government on how such a schemes should be implemented, on the basis of the principle of subsidiarity. This agenda has also been adopted by the Our Islands Our Future campaign.
603. There is clearly potential for devolution of the Crown Estate Commission’s powers. We agree with the analysis of the Scottish Affairs Select Committee report on the Crown Estate, and hope the government will act on the recommendations in their report of March 2014
604. We see merit in the argument for full devolution of the Crown Estate’s responsibility for the seabed and foreshore to local authorities. On the other hand, we are conscious that this could potentially undermine cross subsidy of investment and technical expertise on renewables. We need to balance these two competing viewpoints. We agree with the Crown Estate that the default assumption is that the seabed and foreshore should be managed by local authorities or local communities and that they have developed leasing arrangements which make this possible. If this can be made to work, allowing the Crown Estate to take an interest in particular developments, we will support this. Thus, we propose to use the Crown Estate’s expertise and capital as necessary, but allowing local councils and local communities to manage the seabed in other respects, in order to achieve real devolution to very local areas while preserving the benefits of the wider Crown Estate resource.
605. We therefore endorse the idea of the Crown Estate developing more effective partnerships at community, local authority, and Scotland levels. This means two things in practice. Firstly, local management agreements between local authorities and the Crown Estate, which are an example of best practice, should be applied as widely as possible, with the Crown Estate establishing appropriate mechanisms to facilitate maximum local authority and community engagement. Secondly, a Memorandum of Understanding between the Scottish Government and Crown Estate should be agreed in respect of their common objectives on the development and management of the seabed and foreshore, and those local authorities with an interest in this area should be fully consulted throughout as to its contents.
In another document published by Scottish Labour – Together We Can (2.8Mb pdf), the party states that,
“…we are convinced of the strong case that has been made to devolve the administration and revenue of the Crown property and rights and interests in Scotland, which are currently managed as part of the Crown Estate. This would ensure that the Crown Estates expertise and capital would assist local communities to manage and develop the seabed and foreshore.”
So – the Scottish Labour Party agrees with the Scottish Affairs Committee’s recommendations (full devolution) and hopes that the Conservative/Liberal Democrat Coalition Government will implement them (despite it having made clear that it won’t).
But – if Labour form the next UK Government, it will not implement the recommendations and, instead, adopt the partial (and as far as I can see) a rather muddled approach outlined above.
Image: The British Army on exercises, King’s Park, Stirling. Pastel by William Kennedy 1889
On 15 August a ceremony will be held in Stirling to mark the transfer of ownership of the King’s Park from the Crown to Scottish Ministers. Thus ends a long and disgraceful saga from which none of the official bodies concerned can take much credit. Rather it has been thanks to the diligence of the King’s Park Community Council, local activists and others that this important historic Royal Park was not sold and Stirling’s common good fund raided to finance the acquisition.
The sequence of events is as follows.
The King’s Park at Stirling Castle is Scotland’s earliest Royal Park and the last one still to be owned by the Crown. Since 1956, this historic 140ha park has been administered by the Crown Estate Commissioners (CEC) as part of the Crown Estate, with 48 ha leased out as agricultural land, 61ha leased to Stirling Golf Club on a 30 year lease (1992-2022) and 28ha leased to Stirling Council as a public park and other ground (See map 2.8Mb pdf).
In 1999, virtually all the historic sites still held as ancient possessions by the Crown in Scotland were transferred to the ownership of Scottish Ministers as part of the devolution settlement. These included Edinburgh and Stirling Castles, Holyrood Park, Glasgow and St Andrews Cathedrals and Linlithgow Palace and loch. (1) The King’s Park was left out of the transfer however, apart from the small area of land comprising the King’s Knot.
In 2001, the CEC increased the rent for the golf course by a substantial amount and the case went to arbitration. The arbiter found in the club’s favour at around half the amount being sought by CEC.
This led to negotiations in 2006 to explore the possibility of the club acquiring the land they rented. Negotiations were conducted in secret. However, local people found out at the same time as a detailed report by a group of Councils on the management of the Crown Estate in Scotland became available. The report set out the position over the King’s Park and controversy ensued. As a result, in November 2006, the CEC was forced to withdraw its proposed sale and instead agreed to explore alternative approaches with Stirling Council.
Those discussions led to a detailed proposal adopted by Stirling Council to establish a public trust to take ownership of the land and grant a long lease to the golf course for an up-front capital payment and peppercorn rent. A purchase price of £600,000 was placed on the land to be funded by a £450,000 up-front payment by the golf club for their 175 year lease and £150,000 from the Stirling common good fund.
This deal was resisted by the King’s Park Community Council and they commissioned some work to be carried out to develop a more appropriate way forward. The report – The Right Future for the King’s Park – was published in October 2008 and formed the basis of subsequent fraught negotiations with the Council. Meanwhile, the CEC sat tight and said nothing. Scottish Ministers were approached in October 2008 but declined to act and insisted that the transfer could only go ahead on the terms then being negotiated.
Protracted discussions continued between the CEC, Council and Golf Club during 2009 and 2010, with continued opposition from the local community. Then, in January 2011, the House of Commons Scottish Affairs Committee launched an inquiry into the management of the Crown Estate in Scotland, and the proposed sale of the King’s Park was halted pending the outcome of the inquiry.
In March 2012, the Committee published its report and this is what they concluded in relation to the King’s Park.
157. The second historic site managed by the CEC as part of the Crown Estate is the King’s Park at Stirling Castle. The national historical and cultural importance of this ancient possession of the Crown in Scotland has been highlighted by the Scottish Government. Andy Wightman was very critical of the CEC’s record of managing the King’s Park:
“there has been a lot of controversy over it. That was one of the reasons I got very angry with the Crown Estate Commissioners. …. It is an incredibly important historic area which they just regard as a piece of farmland and a lease to a golf course. In 2001, they were going to sell the land to the golf course, and even the local authority did not know about that.”
158. He concluded that the Park should be the responsibility of Historic Scotland rather than the CEC with its commercial remit. Historic Scotland already manages Stirling Castle and a part of the King’s Park on behalf of Scottish Ministers as owners.
159. We recommend that the Secretary of State for Scotland directs the CEC to enter discussions with the Scottish Government, with a view to the CEC transferring the ownership of all of the King’s Park still held by the Crown to the Scottish Government.
In March 2012, the CEC / Council / Golf Club deal was still on the table only this time the remaining agricultural land was included and the purchase price had risen to over £1 million, with the common good fund to be raided to the tune of £567,000 – over 60% of its total capital reserves – to transfer ownership of public land from one public body to another. (2) But the deal could not be signed off until the UK Government had responded to the recommendations of the Scottish Affairs Committee.
A Parliamentary question by Patrick Harvie MSP revealed that Scottish Ministers had begun to take an interest in the matter.
In July 2012, the UK Government published its response to the Scottish Affairs Committee report. It rejected the Committee’s recommendations that the Crown Estate should be devolved to Scotland but agreed that oysters and mussels and the slopes of Edinburgh Castle (left out of the 1999 transfer of the Castle itself) could be transferred. On the question of King’s Park, however, the UK Government stated that, unlike the land in West Princes Street Gardens, the King’s Park was different:-
7.6 The King’s Park, Stirling cannot, however, be among these [ancient assets that could be transferred]. After lengthy negotiations, the Crown Estate recently agreed a market price for its sale to Stirling Council, so transfer at nil cost would be incompatible with the Crown Estate’s statutory responsibilities. Similarly, the rights to gold and silver and many salmon and other fishery rights have commercial values on the property market which the Crown Estate cannot disregard.
Following the Scottish Affairs Committee report, Scottish Ministers started to take a renewed interest in the matter and instructed Historic Scotland to open discussions with the CEC with a view to securing a transfer of ownership at no cost. In August 2012, the local MSP, Bruce Crawford wrote to the Council urging them to withdraw their offer in the expectation that this would clear the way for a nil cost transfer.
In the lead up to a crucial Council meeting on 11 October 2012 (Agenda and Minutes), the CEC was still of the view that the land had a commercial value and that they expected any sale to be on commercial terms. The Scottish Green Party Councillor, Mark Ruskell tabled an amendment to secure a nil cost transfer, but this was narrowly defeated in favour of a motion remitting the matter to the Chief Executive to pursue matters further. Critical to this was a letter from Historic Scotland of 8 October which emphasised that matters were still under negotiation.
By the time of the next Council meeting on 13 December matters had moved on and at last, some sense seemed to prevail. The golf club would pay a sum to the CEC for a long lease, title would then be transferred to Scottish Ministers at no cost and the common good fund would remain untouched. Here is the report in the Stirling Observer.
This appears to be essentially the deal that has now been secured. It is not what was proposed in The Right Future document, in that the title to Scottish Ministers is burdened by a 150 year lease. However, the settlement safeguards the integrity of the King’s Park, re-unites its ownership with Stirling Castle and affirms the long argued principal that a nil consideration transfer to Scottish Ministers was the right way forward.
It is safe to assume that the fact that CEC and the Scotland Office had been arguing against this position until very recently will be quietly forgotten next week And so, when Michael Moore, Fiona Hyslop and dignitaries from Stirling Council and the CEC make their speeches, have their photographs taken, and enjoy their “light finger buffet” on Thursday 15 August, I will be paying close attention to what they have to say about how this all came to pass.
The folk who were critical in securing this outcome will probably not be at the ceremony but they know who they are. They can take credit for not only securing the future of the site in public ownership but also preventing the pillaging of the Stirling Common Good Fund to the tune of £567,000. One day, the Trustees of the Fund might think it appropriate to spend some of these savings on a light finger buffet in recognition of the efforts of those whose hard work since 2006 lies behind the ceremonies next week.
(1) The full list of properties is listed in Annex 6, page 122 of the 2007 report of the Crown Estate Review Working Group. Full report is here.
The CEC has issued a media release which reveals that the Crown is granting a 150 year lease to Stirling Council for a consideration of £817,000. The Council are granting a sub-lease to Stirling Golf Club which will contribute £400,000 of the cost. The title is then being transferred gratis to Scottish Ministers. It is not clear where Stirling Council intend to raise the £417,000 from. I have placed a request for this information with the Council’s media office.
Finally, it is interesting to note the final sentence of the CEC media release.
“The Crown Estate has a statutory obligation to transfer land at market value.”
This goes to the heart of the matter. The assertion is untrue. Not only has the CEC in the past conveyed bits of harbours and the like for minimal consideration, it conveyed the 26 historic properties (including Stirling Castle and the King’s Knot) for no consideration and the CEC’s own statute does not oblige it to “transfer land at market value. There are a number of provisions in the Crown Estate Act 1961 that provide flexibility to the CEC in transferring title, the most important of which is Section 3(1).
“3 General provisions as to course of management.
(1) Save as provided by the following provisions of this Act, the Commissioners shall not sell, lease or otherwise dispose of any land of the Crown Estate, or any right or privilege over or in relation to any such land, except for the best consideration in money or money’s worth which in their opinion can reasonably be obtained, having regard to all the circumstances of the case but excluding any element of monopoly value attributable to the extent of the Crown’s ownership of comparable land.”
I emphasis in bold the critical part of the section.
UPDATE 1 SEPTEMBER 2013
The terms of the deal reached between the crown Estate Commissioners and Stirling Council is as follows.
There are three ground leases to the Council for 150 years at nominal rent. The map below shows these areas.
Lease 1 (blue) covers the current public park, the public paths around the golf course and all the land adjacent to the Castle (Gowanhill, Back Walk etc.). There is no capital payment for this lease.
Lease 2 (yellow) covers the golf course. It is sub-leased to Stirling Golf Club for 150 years. They have paid £400,000 for the sub-lease, which Stirling Council has passed on to the Crown Estate Commissioners as the consideration for the ground lease of this land.
Lease 3 (pink) covers the two large areas of agricultural land. The value of this land is £417,000 and the Council has concluded an agreement with the Crown Estate Commissioners that this sum can be paid up over twenty years. There is an option at any time to pay off the balance and terminate the agreement. In the meantime, income from the use of the land is shared. Any capital investment the Council makes in improving the land (for example in creating the new parkland or the major events ground) is taken into account under the agreement. Stirling Council will pay for this lease from its normal annual budget.
The heritable title to all of the land, subject to the three ground leases in favour of the Council has passed from the Crown Estate Commissioners to Scottish Ministers for no consideration, as recommended by the House of Commons Scottish Affairs Select Committee.
On Thursday this week, Stirling Councillors meet to decide the fate of the King’s Park (item 19 on agenda). This is the first time the new Council has the opportunity to consider the plans developed by the last council. For a critique of these see this post and for background documents see here.
The King’s Park, Stirling cannot, however, be among these. After lengthy negotiations, the Crown Estate recently agreed a market price for its sale to Stirling Council, so transfer at nil cost would be incompatible with the Crown Estate’s statutory responsibilities.
What this argument in fact reveals is that in fact it is only because Stirling Council agreed in the past to raid the Common Good Fund and buy the King’s Park that the UK Government and the CEC can even make this argument.
The straightforward answer for Stirling Council is to take the deal off the table on Thursday. Then proper negotiations can take place with a view to transferring the site to Scottish Ministers – discussions which, as this letter reveal, are already underway.
UPDATE 1019hrs 12 October 2012 – I understand that the Council has voted to defer any decision.