Will Estates sell-off prove a crowning achievement?

Chris Mackay of Burness Paull
Chris Mackay of Burness Paull
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Things are changing for our ports and harbours, explains Chris Mackay

The Scotland Act 2016 and subordinate legislation will transfer these assets to the Scottish Parliament from April this year. An interim body (Crown Estate Scotland Interim Management) will manage them, pending a Scottish Bill on the Crown Estate which has been penciled into a legislative programme in the Scottish Parliament for 2019.

The assets currently managed by the Crown Estate Commissioners (said in 2015-16 to have had a net revenue of £6 million) include Coastal eg foreshore/off shore; Agriculture eg various farms including Glenlivet estate; Aquaculture eg fish farming and cable/pipelines/renewables.

Many are monopoly assets ie only the land in question – and no other – can meet the needs of a port or harbour or its developer. Therein lies the challenge for those requiring to acquire estate rights and deal with whoever is managing such estate. A port development often involves the acquisition of an area of sea bed for the construction of quay walls, the lease of parts of the sea bed for mooring pontoons, and an agreement regarding capital dredging to create appropriate navigation channels. Any capital receipts will need to be reinvested into the estate, which is still to be maintained in perpetuity on behalf of the Crown.

The consultation considers arrangements for further devolution from the Scottish Parliament, against the backdrop of a number of restrictions on the management of the Estate and the need to recognise the potential liabilities of assets.

It is apparent to anyone with knowledge of the ports and harbours sector, that it should be appropriate to provide a level playing field among the mixed economy of harbour bodies namely, local authorities eg Orkney harbours; Trusts eg Aberdeen Harbour; private sector eg Babcock International Rosyth.

It is also important that any changed arrangements achieve economies of scale. Politics aside, there appears little logic, in dealing with Orkney, Shetland and the Western Isles differently from ports on the west, north or north east coasts? But a pilot devolution is to be run for these islands. Further, the net revenue total prize of circa £6m per annum, if split between 32 local authorities, is only circa £200,000 per annum and the marine revenue element of this is maybe only half that.

The lowest cost will be management at a national level but that will also be the most centralising of power to Scottish Ministers. Management by local authorities and communities is far from straightforward and could lead to a patchwork approach unlikely to be favoured by developers. The third option is a case by case assessment based on a geographic or functional approach.

What will be the impact on research and strategic planning? The Crown Estate already has a good track record of undertaking research and strategic planning which has benefited offshore wind, tidal and aquaculture, with the aim of enhancing the future value of the estate. It makes sense for this work to continue from an economic viewpoint, but surely this has to be on a national basis?

To deliver real benefit to Scotland the solution arrived at after consultation, which runs until 29 March, and any pilots, has to tick many boxes. It should not be over-engineered or oversold to communities in the knowledge that the revenue sums involved are not massive.

Chris Mackay is a Partner with Burness Paull