 Welcome to the 31st meeting of 2015 of the Rural Affairs, Climate Change and Environment Committee, who were removed to the first item on the agenda. Can I remind members to switch off their mobile phones if they are going to make a sound that interferes with our concentration or the broadcast system? You may notice committee members using tablets during the meeting because the papers are provided for some in digital format. Agenda item 1 today is consideration of items in private. The first item on our agenda this morning is to decide whether to consider item 5, the consideration of our work programme in private. Are we agreed? The committee is agreed. Thank you. Agenda item 2 is subordinate legislation and the committee is to consider the draft environmental regulations enforcement measures Scotland order 2015. That instrument has been laid under affirmative procedure, which means Parliament must approve it before provisions may come into force. Following the evidence session, the committee will be invited to consider the motion to approve the instrument under agenda item 3. I welcome the minister and the Scottish Government officials to the meeting. I welcome the minister for environment, climate change and land reform, Dr Aileen McLeod, George Burgess, Deputy Director of Environmental Quality Division and Bridget Marshall, Environmental Quality Division Scottish Government. Minister, would you like to make a short statement of introduction? Thank you. Good morning, convener. My thanks to you and the rest of the committee for inviting me here this morning to discuss this important order, which is a key component of our wider better environment programme with SIPA. Scotland's environment is a vital natural asset and protecting it is not just a viable end in itself, it is also essential for our economic prosperity and the health and wellbeing of people in Scotland. While everyone in this country has a part to play in helping to look after our environment, it is essential that bodies who have statutory obligations to protect and improve our environment such as SIPA have the powers they need to do that job effectively. The vast majority of individuals and businesses in Scotland already comply with relevant environmental regulations and indeed a significant number go beyond compliance recognising that waste reduction, resource efficiency and other good practice are not just beneficial for the environment but also make good business sense as well. Where individuals or businesses deliberately or negligently harm Scotland's environment, it is essential that SIPA has the right tools to protect our environment and communities and ensure that legitimate businesses are not undercut by criminals. It is just simply unacceptable that anyone should profit by damaging our environment. This order implements most aspects of chapter 2 of part 3 of the Regulatory Reform Scotland Act 2014 by making provision for a range of new enforcement measures for SIPA. Those measures include fixed and variable monetary penalties, enforcement undertakings, non-compliance penalties and cost recovery notices. Those enforcement measures will provide SIPA with a better range of interventions to tackle poor performance, non-compliance and environmental crime and to help to create a level playing field for businesses. They will also help SIPA to take a preventative approach facilitating early engagement and intervention to prevent compliance issues from escalating and becoming prolonged or, through their deterrent effect, prevent such issues from happening in the first place. SIPA is well aware of the significance of the additional powers and responsibilities that we propose to give them and they are committed to ensuring that the measures are used responsibly. In addition to the safeguards in the order such as the right of individuals to make written representations and to appeal against enforcement decisions, SIPA is also putting in place a wider range of safeguards to ensure that the new measures are used proportionally and effectively. That includes comprehensive training on the intent behind and use of the new measures for SIPA officers and the establishment of a robust internal review process that is designed to ensure appropriate and consistent use of the new measures within SIPA. SIPA has also recently completed a public consultation on the new enforcement policy and revised enforcement guidance. Those key documents provide transparency on the way in which SIPA will make enforcement decisions and they set out not only what SIPA expects of regulated businesses but also what regulated businesses can expect from SIPA. It is important to recognise that the new measures are part of a wider framework of environmental protection and that they will not be used in isolation. SIPA will continue to refer significant, persistent and deliberate offending to the Crown Office and Prosecutory to Fiscal Service for considerations of prosecution and close working between SIPA and the Crown Office and Procurator Fiscal Service will be a key aspect to the successful operation of the new framework. The partnership between SIPA and the Crown Office and the Procurator Fiscal Service will be underpinned by guidelines from the Lord Advocate which will be issued shortly. Those guidelines will ensure that the new enforcement measures will be applied consistently and proportionally as part of the whole range of sanctions that are available, including prosecution. Just to conclude, stakeholders have also played a vital role in helping to develop those new enforcement measures and I would like to take this opportunity to thank all those who responded to the consultation or engaged through other means. The positive feedback received has been absolutely vital in shaping our proposals and I encourage stakeholders to continue to engage as we deliver the rest of the better environmental regulation programme. Thank you very much, convener, for this morning and I am happy to answer any questions on the draft order. Thank you very much, minister. Yes, indeed we do, starting with Graham Day. Thank you, convener. Good morning, minister. I have a couple of questions. The first one concerns restorative action. I would like you to outline for us how that will be monitored in practice and perhaps explain to us how you believe that SIPA have the physical resources to oversee the restorative action being undertaken. The second one concerns the appeals process. I never thought I'd see the day where reference in the land court we were talking about swift and affordable access to justice and a light touch approach. I'd welcome a clearer understanding of how that process will work. I think that Bridget Marsh is going to pick up your first point and I'm happy to take up back on your second point around the appeals process. In relation to restorative action, those measures, particularly the enforcement undertaking, are designed so that the focus as a result of the enforcement action is to restore the environment. The whole purpose of those tools is to try and get the environment restored in perhaps a more formal manner than it currently is. I think that your question was around how SIPA will manage this and ensure that it is carried out. The enforcement undertaking is probably the main vehicle for ensuring the restoration of the environment as opposed to taking monies away in a fine that goes off to the Scottish Consolidative Fund. If you fail to comply with your enforcement undertaking, SIPA goes back almost to square one and can issue a fine or refer you to the fiscal. It will be part of the process to ensure that the restoration of the environment occurs under enforcement undertaking and SIPA is structuring itself to be able to ensure that the enforcement undertakings are complied with. If I may go, are we confident that SIPA has the resources on the ground to ensure that the restorative action has been taken? If somebody is going to have to check... I think that SIPA is developing a process whereby it will ensure that it has sufficient resources in place to monitor that the enforcement undertakings are complied with. That is the nub of the matter of enforcement. It is a bit like councils having enough people to see that building regulations are carried out. It must have been determined by SIPA staff and therefore it can be monitored thereafter. We are just exploring this process. George, certainly the initial stages of the process will be the same whatever a case is heading towards reporting to the procurator fiscal or heading towards one of the new enforcement measures. Reporting a case to the procurator fiscal taking through the court is itself quite resource intensive, so what this provides is an alternative way to use the resource that SIPA has and that would otherwise be putting into a court procedure, but putting that instead into working on the ground, working with the businesses and concentrating on the restoration of the environment. Out of that, it is a redirection of resource that SIPA already has and redirecting it towards getting a better outcome for the environment rather than simply pursuing it through a court route. The appeals process provides for a robust appeals process, making use of the expertise and experience of the Scottish Land Court. The use of the Scottish Land Court is the appeals mechanism that responds to stakeholder desire for an appeals route that is independent of Scottish ministers. That would provide immediate and affordable access to justice for appellants. In discussion with the Scottish Land Court, we have taken the opportunity in the order to adjust the rules of the Scottish Land Court so that cases can be dealt with by written submission and to limit the circumstances in which expenses can be awarded. We have also adjusted the fees order for the Scottish Land Court. It is also free to apply for an appeal and these amendments are really to ensure that the Scottish Land Court can provide an accessible swift and a low-cost appeal system. I am very interested in the principle behind the statutory instrument and it makes a huge amount of sense to me. Can I ask about the particular issue of waste crime because there is a huge problem, not just in my own region but across Scotland? Can you specify how this potential piece of new legislation will assist in getting swift action on really poor environmental quality and damaging waste crime problems that are a real scar in a lot of our communities? Silly, in general terms, SIPA is presently reliant on a quite narrow range of enforcement tools and ultimately on referral for persecution to tackle non-compliance and environmental harm such as waste crime. We want to empower the agency to be able to take a direct but proportionate approach to protecting our environment and our communities. I think that the new powers that are created by the order will certainly play a key role in helping SIPA to be able to take a preventative approach. The enforcement measures will help to deter non-compliance in the first place and they will also enable SIPA to be able to intervene much earlier than what they have ever been able to do so before, which will prevent cases of non-compliance escalator or dragging on for months and years to come. George, you want to add? I think just to add that, as the minister said earlier, this is part of a much wider spectrum of measures. For some of the serious waste crime that I know a number of members will have seen in their constituencies, it is probably not so much this order that provides the solution, but it is the other measures that we have already implemented in the Regulatory Reform Scotland Act 2014, so additional powers for the court to ensure that the financial benefit of offending is taken out through any penalty that is imposed, improved powers of entry, search and seizure for SIPA. For the top end, where unfortunately a lot of our waste crime is, it is those other parts of the act that will really help SIPA to deal with it. However, as the minister says, at the lower end, where there are people that are in SIPA's enforcement or compliance spectrum, the chances are rather than the outtrack criminals. This is the way that SIPA will have a bit more hold on them to be able to guide them back on to the straight and narrow, rather than to see them head down towards the more criminal end of the spectrum. Can I welcome that answer and ask the minister if he will commit to make sure that there is a review and monitoring process? Those are really problematic crimes and it is a huge environmental justice problem. It would be interesting to see how the combination of measures actually works in practice. If we could get it split down by type of crime, that would make it more transparent for everybody and help to make that preventative impact that you are trying to make. I will be happy to do that. The environmental crime task force, which has been running for a couple of years, is still running. That is looking very much at waste crime. There is also an opportunity for the Parliament and this committee to be involved. Section 52 of the act commits Scottish ministers to provide an annual report on the operation of part 3 of the act to the Parliament. That includes those measures, our new authorisation framework and the new court powers. We will be providing an annual report to Parliament on that whole range of activity. That is fine. That would give our committee a chance to actually look at that. It is one to write down for our next year indeed. Dave Thompson and Claudia Beamish Thank you, convener. Good morning, minister and colleagues. On the Scottish Land Court, are you confident that the Scottish Land Court does have the capacity to deal with those things? There have been issues in the past, I think, as my colleague Graham Dee alluded to, that the Scottish Land Court can take a long time to deal with things. I am working very closely with the Scottish Land Court. We have had many discussions with them, and they are confident that they have capacity to deal with those cases. We are not expecting a huge volume of appeals each year. In the first instance, we are phasing the measures in, so the volume of appeals is not expected to be that high. They felt confident that they had sufficient resources within their current resources to deal with the cases. As we have previously referred to, we have worked with them to try to adjust their procedure in this order, so that they can try and create a forum that works effectively and is cost-effective. Thank you. A couple of other points. The appeals process is good to see that the SLC can determine appeals without a formal hearing, but where appropriate or where both parties agree, is SEPA going to be encouraged to agree to those sort of things? Is this something that would be a presumption in favour of SEPA agreeing to go through not going through a formal hearing? I think that where it is an appropriate case, and we have in mind particularly the fixed monetary penalty say of £300, where the legal issues should be or the appeal issues should be relatively straightforward, that certainly it will be encouraged that these are dealt with on written submissions. There will clearly be some more complicated cases where it won't be appropriate to deal with them on written submissions. I imagine an awful lot of the time the appellants and businesses are going to be very happy with a truncated process, but SEPA might think that it's not in their interests. It's just to get on the record that there would be a presumption that SEPA would, wherever possible, go for the shorter process without a formal hearing. I think that there's benefits for SEPA as well as businesses in following the truncated procedure in appropriate circumstances, and that presumption will be there. It's good to see that expenses will not be awarded in relation to an appeal except in relation to any court fees paid. That's fine, but an appellant may well, if it goes into a formal hearing situation, have to engage lawyers and others and could run up pretty substantial expenses with no way of getting that expense back. Is that not a discouragement to a business that has been accused by SEPA of a crime to engage in an appeal if their expenses could run unto many seasons of pones? We considered that issue in quite a lot of detail. There are arguments on both sides, but we thought that on balance we were trying to create an appeal forum where we were not encouraging the engagement of expensive QCs or lawyers to defend your case where it wasn't perhaps necessary. We felt that removing the usual expenses rule where expenses follow the event would create an incentive to represent yourself rather than employing lawyers. That goes for SEPA as well as businesses. It might be difficult for a business to represent itself. SEPA will have resource and so on, and it's fine that the business wouldn't be liable for the SEPA expenses, legal expenses and so on. However, if it's a difficult case, the business might need to employ counsel or so on, and it could be expensive. That might discourage them from appealing a SEPA decision. Yes, we accept that. The balance to that is that for small businesses who may be a disincentive not to appeal if they feel that they may be exposed to the possibility of having to pay SEPA's expenses, so it was a balance. SEPA's expenses, their own expenses, hiding their own QC. For some appellants, particularly the small businesses and sole traders that are potentially being held liable for SEPA costs would disidentify appealing, and that's clearly undesirable. Our intention was not to discourage appeals, but to provide an appeal system that offers fair, swift and cost-effective access to justice. The order therefore limits the expenses either way to cases where a party has acted unreasonably in bringing or conducting proceedings. We think that that approach, together with the removal of the requirement for appellants to pay a fee to lodge an appeal, strikes an appropriate balance between affordability and fairness. I still don't think you've answered my question because an appellant will still have to pay their own legal fees and their own legal fees could be substantial. Yes, an appellant will have to pay their own fees. There is the provision that if there has been a serious failure in the part, in this case of SEPA, so if they have just got the whole thing completely wrong and the appeal is successful on that basis, in those cases the court can award expenses against them. It's perhaps worth remembering that the alternative to that for the majority of the more serious cases would be pursuing a case through the criminal courts. I think that the expenses and what's at stake would be considerably higher than anything that is possible through this order. Claudia Beamish Angus, Macdonald and then Mike Russell. Thank you, convener. Good morning, minister, and good morning to you both. The main points that I wanted to highlight have actually been raised by other members, and so I'm not going to re-rehearse those, but I would endorse the comments that have been made, perhaps most importantly, because I do believe that revisiting this is very important in terms of committee legacy paper, and I hope that we might be able to discuss that in our work programme or the legacy paper later, but particularly in relation to such things as how the partnership working between SEPA and the Procurator Fiscal's Office is going in view of the fact that the idea is to resolve the environmental difficulties rather than get people into the courts unless, as you've highlighted, George Burgess are the parts of the act which relate to possible organised waste crime, for instance, would be dealt with in a different way. However, I do think that this is very important, having been on the committee at the time when the act became an act, the regulatory reform bill, with a number of other members. I hope that this will be possible. We are having the opportunity to produce the annual report, which I'll go over to the committee itself, and that gives us an opportunity for the committee to scrutinise that. My point on waste crime has already been covered by Eicera Boyack and Claudia Beamish ever from a constituency perspective. I very much welcome the new order. The minister and her officials, including George Burgess, will be aware of waste management issues in Falkirk district and elsewhere in the country where even licensed operators have regularly breached environmental regulations and there's been regular non-compliance issues with certain operators. Taking on board Mr Burgess' earlier point that other parts of the act are going to help, I think that it's fair to say that SEPA officials have been exasperated as I have at times when dealing with some of the rogue operators. Certainly, I hope that SEPA will use these new monetary penalties and enforcement powers to good effect and will not hesitate when action is required because there have been cases in the past where there has been a perception that SEPA were reluctant to use the powers that they already had and, hopefully, that will not be the case in the future. Politicians are never happier than when they are talking about penalties of one sort or another, which always makes me slightly nervous. I was certainly concerned to hear Mr Burgess use the words entry, search and seizure. I do really want to reassurance from the minister that SEPA's success in being proportionate, in being persuasive, in trying to change the context of thinking about the environment in Scotland and about regulation will remain its primary focus. The easier issues of simply applying fines of saying to people that you're a malefactor and we're going to punish you is not the default option because SEPA has changed a lot as an organisation in the past 10 years. That change has been highly successful because it has been changing the climate of how environmental regulation has been undertaken and the climate of how we all regard the environment. I'm just looking for a reassurance about that. I know that this is out of context in the sense that this is one item in the armory, but I just hope that it won't be overemphasised because it is easier to regulate in that way than to do it in a really effective way. They've been doing it up until now. No, I agree and I can give you my reassurance on that today. I think that my question follows on very neatly from Mr Russell's question there. I know and fully accept that where my question is going is not the intention of the paper, but I seek some assurance here. I think that the first part of my question is where will the money go to that is forthcoming from any penalties, should they be imposed? The income that arises from any of the monetary penalties imposed by SEPA will not be retained by SEPA to avoid the very low risk of penalties being issued for purely financial reasons. It's set out in section 12 of the order that SEPA must pay any penalty received to Scottish ministers. Will the Scottish ministers pay any such penalties to the Scottish consolidated fund? I think that that very nearly answers my question and I'm grateful for it, because the hint was in the word that you used there, the income raised, and I would hate this to be even have a possibility of becoming an income raising mechanism. If I could just follow that up briefly, convener, any money that is raised will go into the Scottish consolidated fund. Can you assure us that that money raised will not be taken into account when determining SEPA's budget in following years? Yes. It's going into the general, the wider Scottish consolidated fund, so it won't be attributed to SEPA, so we will not be doing any netting off exercise. That's, I'm very grateful for those replies, thank you. Back to Dave Thompson's point, I think that you've clarified that the intention would be that an appellant who appeals and is an unsuccessful SEPA would not automatically go for expenses against that appellant, if he would then, of course, would be facing a fine in, I believe. It does say, or where the court considers that party has acted unreasonably, so therefore SEPA could go for getting their expenses back if that party had been deemed to act unreasonably. Of course, if that person had been unsuccessful in their appeal, they would then, of course, have been guilty of causing environmental damage. Therefore, would that be seen as being unreasonable? Therefore, I just wonder how strong the actual term means that SEPA wouldn't be seeking costs. The test of reasonableness is about behaviour. Is this an appeal that is completely ungrounded that the appellant doesn't conduct themselves through the court in an appropriate fashion? It's not simply a question of whether you win or lose on the merits of the appeal. So, if an appellant puts forward an appeal, a perfectly reasonable appeal, but the court nevertheless decides not to grant that appeal, that's not the sort of case where SEPA could even seek or the court would grant expenses. Are there any other questions from members? If not, then I think we'll finish with this agenda item and move on to agenda item 3, which is to consider motion S4M-14575, asking for the committee to recommend approval of the affirmative instrument. The motion, of course, can be discussed for up to 90 minutes, if we require to, but I think that we've seen quite a lot of the questions answered and, of course, it's the case now that only the minister, from the Government's perspective, can answer any points that are made, just to remind members. I invite the minister to speak and move the motion, which is environmental regulation enforcement measures Scotland order 2015 draft. Thank you very much. Are there any members who wish to make any points? If not, minister, do you wish to wind up? No, I'm fine. Thank you very much, convener. I would put the question then that the motion S4M-14575 in the name of alien cloud be approved. Are we all agreed? We are all agreed. We will record that. Thank you very much minister and your officials and we'll have a brief suspension now to allow for a change over of witnesses. Agenda item 4 this morning is to take evidence from representatives of the Crown Estate in Scotland on the organisation's annual Scotland report and an update on the devolution of the Crown Estate in Scotland, which includes the head of legal services to the Crown Estate from London, Rob Booth. Welcome to Gareth Bair, Scottish Commissioner. Ronnie Quinn, general manager, Scotland portfolio and head of ocean energy, and Alan Laidlaw, rural and coastal portfolio manager and Rob Booth, the head of legal services, invite Gareth Bair if he wishes to make any short opening statement to do so. Good morning, gentlemen. Thank you very much, convener, and good morning to the committee. Thank you for inviting the Crown Estate to provide oral evidence to the committee and for allowing me to make some brief opening remarks. Eleven months have passed since the publication of the Smith commission report, which recommended devolution of the Crown Estate's management functions in Scotland. I've been Scottish Commissioner for over six years and I can genuinely say in all that time I've had the highest respect and admiration for the Crown Estate team in Scotland. In many ways, the last 11 months has been the proudest spell of my tenure as commissioner, the period in which I have seen the team at their finest. Our team in Scotland have continued to perform very strongly day in and day out, and the Scotland annual report that we published in June contains some examples of the great work that they have been doing and indeed continue to do so. Those positive results achieved in such a challenging and uncertain time for our business are a testament to the determination, dedication, expertise and resilience of our people. As well as the day job, the team have also been doing a power of work to prepare for the transition to the new body. We're still not sure exactly what that will be and that body will inherit our responsibilities. Ronnie Quinn seated next to me has been appointed general manager of our Scotland portfolio, a Scottish operating division with its own business plan, management information and financial reporting. This arrangement, which takes effect from the 1 April 2016, is designed to ensure that we are in the best shape possible to take forward the transition of the business and that we play our part in delivering a prompt, smooth and seamless transition into the new devolved operation. I'm sure that Ronnie will have the chance to explain our plans in more detail later in this session. Convener, I'm very proud of the results contained within the Scotland annual report. I'm proud of the conscientious work that we are doing to deliver the evolution of our functions in Scotland and I'm proud of the way our staff have performed through a very challenging but successful year. I'm confident that our people will make a big success of whatever new devolved arrangements are introduced and until that time comes, we will continue to perform strongly and we will do all we can to minimise uncertainty for our customers, our staff and the communities that we work with across Scotland. We're delighted to be here today to update you on our recent activities and achievements and we will do all that we can to assist you in your deliberations. Thank you very much for that opening statement. We have a number of topics that people have thought to discuss and the first of those is going to be led by Jim Hume. Thank you very much, convener, and good morning to everyone this morning. Yes, you said that there has been a power of work regarding the transition and part of the concerns from some of the people that we've talked to, particularly farming tenants, is regarding obviously management of the state after devolution and throughout the whole transition period. I'm just wondering how much work has been done in that respect, where you see it going yourself, do you see it being devolved down to local authorities, would you advise it going down to local authorities, you may not want to comment on that, or would you see another body kept obviously perhaps directly responsible to ministers. It would be interesting to hear your thoughts on where the power of work regarding the transition of farming tenants is going? First, before I pass over to Alan Laidlaw, I would say that the extent of devolution is entirely a matter for Scottish ministers, but as far as the communication that we've had with our tenants, I'll let Alan extend on that. Thank you, convener, and good morning. There's a lot of uncertainty out there, and I think that's probably been reflected in the evidence that's come to the committee, and I know that you spend a lot of time out and about and get a lot of feedback. As do we, and the key for us is to make sure that we're managing the uncertainty that we know about and to make sure that business as usual is continued at the moment, but also try and make sure that there's a sensible approach to the more longer term side of things. I think that there would be an element of reassurance in that there is change coming, but we're making sure that tenancy obligations and that side of things continue. I think that's probably the piece where most people seek clarity quite quickly, and many are comforted by the fact that the protections given within the Ag Holdings Act or wherever their lease may sit would be protected. Where the difficulties probably come more often or not is when they're looking beyond transfer and seeking assurances about what may or may not happen, and that's where we're unable to offer any firm cast iron guarantees, but we are spending a lot of time talking to them and making sure that they're aware of the process. I'm aware that the committee has had representation from some groups of tenants getting together, taking support and advice from NFUS, STFA and others, and making sure that they've got a voice through that process. They're also involved in the ministerial stakeholder group as well to make sure that they have a good opportunity to influence going forward. We're spending a lot of time making sure that they understand where in the process we are, when key decisions will be made and how they can influence those. I think that hopefully we're doing as much as we can there, but we will continue to do that as the process evolves. If there has been any interaction with local authorities, because I believe that some of the tenants may be concerned if it is devolved to purely councillors, local authorities may not be the expertise within local authorities and local authorities may not feel that they have the expertise themselves. I'm not sure about that. In terms of the future decisions, as Gareth said, that's a matter for government. Both Rony and I have regular meetings with the councils. Indeed, the next round of those is starting. We can say that we've got Orkney, Shetland, Highland, Argyll and Buten, Murray, all booked in the diary in the next six weeks. Indeed, I'm up to Murray on Friday morning to catch up on some of those elements. If I could just give a practical example to Mr Hume of some interaction that we had, about a fortnight ago, we were up on Glen Livittus state. We've had a collaboration with the Morden Research Institute, which, just for the committee's information, is a world-leading animal disease research institute just out to the west of Edinburgh. We've brought the research scientists from the Morden together with our tenants, both on the Glen Livittus and Fockebers estate, around animal disease and around animal productivity. A phrase that Alan often uses that we're trying to do with all our stakeholders is add value. We went on to one of our tenants farms with those research scientists, and there was a fantastic engagement between our farming tenants and those research scientists. If you like, there's been a frustration from the scientist side for the appliance of science, and this was allowing the scientists to get right at the coalface of animal issues, animal disease issues, with our tenants. The level of interaction was absolutely superb. The Crown Estate sponsored that day. We had a seminar afterwards in the Glen Livittus distillery, and I must say that nothing was sampled, but the interaction, as I say, was absolutely amazing. Perhaps a feature of our engagement with our tenants is every now and again that our bolder tenants are confident enough to stand up and speak their mind. On that day, six tenants came to me very quietly and expressed their concerns about the future of what our multi-generational businesses are. As Alan said, it's not possible for us to give them any black and white picture about that, but we explained to them that the level of engagement between the Crown Estate team and Scottish Government ministers and officials is at a very high level to try to keep those assets performing at their best for the sake of Scotland. Indeed, for their own businesses, it was right at the top of the priority list. Just to expand slightly, that's good to hear, but a lot of the talks will be happening at Westminster. I know that we've got both here as well. I wonder how high up on the agenda this issue is in discussions with Westminster Government on the evolution of the— I can confirm it as a topic of ongoing conversation. The nature of the process that we find ourselves involved in is that it effectively splits into two. On the one side, we're ensuring that we're feeding into both Scottish Government and into Westminster at a technical level in relation to the legislation that's coming forward, and on the other, frankly, I leave it to the experts to ensure that they are in with the stakeholder community having those sorts of interactions. Certainly, there is information being passed in the Westminster direction as well as directly to stakeholders, as Gareth and Alan have spoken to. In particular, regarding the farming tenants sector, in a different sense, okay, thank you. Thank you, convener, and good morning, gentlemen. First of all, I very much welcome the level of detail on the 2015 report. I think that it represents considerable progress on where we were three, four years ago. I refer you to page 22 in terms of the rural and forestry sector. Two things jump out at me. The first one is where there's reference to your conversion of the majority of your limited partnerships into long-term limited duration tenancies. It says that most of those tenancies are 15-year summer for more than 30. I'm just interested that it teases out, given the other workstream that we have at the moment, how you determine who should get a 30-year tenancy as opposed to a 15-year and on what basis. The second point I want to raise is you make reference to spending, investing over £700,000 in ten-inch units. That's a considerable sum of money. However, it's been suggested to the committee that that process of repair and investment has, to some degree, been put on hold over the last period since it became apparent that control of the Crown Estate would be coming to Scotland. I just wonder how you react to that claim, that assertion, and if you'd dispute it, if you could perhaps give us examples of where investment has been taking place of late. Absolutely. The easier question is the first one. In terms of the next-generation tenancies, we took a view and looked at all of our limited partnerships a very long time ago, I think probably eight years ago, and looked at LDTs and the development, and where we're looking to engage with the next generation in particular. Rather than setting an arbitrary figure of 10, 15 or 20 years, we were looking at the business and the family involved. So where longer tenancies were offered, we tended to take, and there's an element of arbitrary figure in there, the next generation up to 65. So if there were 40, it was a 25-year agreement. If there were 35, it was a 30-year agreement. That is an element of arbitrary figure, but we thought at that time it was a useful discipline for family to say that's a good place for succession discussions to be happening, retirement planning, et cetera. That's probably the main variance in terms of those discussions. That's meant that there's been some pretty long-term 35-year, 37-year plus agreements where the next generation has been ready and able to move forward. I'm really proud of that and the team that's working there, because we're now three or four, at many occasions probably more than that, years into those agreements. The difference that you see on the ground in terms of those discussions is significant. I think also in that regard, I think that Gareth and I were mused on it when we were at Glenlif at the time that the age profile of many of our estates is significantly younger than you would maybe see elsewhere, because we are continuing to invest in fixed equipment and we are making sure that those succession discussions are happening. I can think of one tenant who got quite upset with me one day when I referred to him as the previous generation and we were looking to the next generation, that was two or three years ago, and now he says that was a really good moment in their family because it actually gave their next generation a chance to say, what are we trying to achieve? In terms of investment, repairs expenditure this year is within 1 per cent of last year. I looked at those figures over the last few days so that the budget there is exactly the same and, indeed, additional funds have been made available this year to look at certain aspects of safety. That would be electrical safety and asbestos, so we've got a programme of work to make sure that we are getting the estate fully in order in terms of that before any transfer. We are still investing capital into units. Indeed, I was down in Apelgrif the other day standing in front of a shiny galvanised shed where one stood a very archaic long barn system. There are examples there and we are continuing to look at that. I think that one of the differences at the moment is that there is a very clear point in time in the tenants and their occupiers minds that change will be happening. Many people have known that we have had a rolling programme of investment each year that we take projects on and they are uncertain as to whether that will continue or not. I suggest that, quite often, more projects have come forward in the past six months than previously came forward on average. We are still investing and we can still give you examples of that. We are taking our repair and maintenance obligations very seriously. Thank you, convener. Just to follow up on that, what is the process of agreeing investment and repair? If someone is dissatisfied by being told that it is not happening or that they will have to wait two years, how do you take that forward? I think that with anyone who is maintaining assets, whether it be a residential property or a commercial office block, there are always things that need to be done. We have a dialogue. We try to communicate as openly as we can, and we try to make sure that the budget is set to work and that we approve our work plans. In areas such as Murrayshire, particularly Glinliwet, the window for putting up new steel and concrete is relatively limited. I can think of one or two examples where we are working and the tenants have said to us that mid-October to mid-May we are just not interested. Let's agree the budget for the following financial year, get planning in place and look to move forward post turnout of stock. The dialogue probably separates the repairs discussion from investment discussion. We try to do as much as we can when it is due and we try to retain sensible contingencies for weather events. Port Gordon Harbour, our expenditure last year, went up by over £400,000, because of an extreme weather event in Port Gordon the year before. Probably four or five years ago, the significant snow falls in Murrayshire, again, there was a £1 million expenditure that occurred that year. We try to retain some flexibility to be able to respond to needs on the ground. I'm happy at this stage, convener. We'll move offshore then, Sarah Boyack. I really wanted to explore where we're going on offshore, particularly in terms of renewables. The Crown Estate is obviously instrumental in getting that whole set of technology going because of your infrastructure and your influence over half the four-shore in Scotland, which is a lot of land. I really wanted to get a sense of where that's going in the future. Your renewables investment is up 5 per cent this year. It's a key devolution challenge to keep all that going and yet to see more benefits for local communities coming through that process. I wonder if you could talk a little bit more about that. I noticed that Maidgen is pretty well on the way. It's just to get a sense of what more is going to be coming next and how you're going to manage a way through the devolution process on that. Thank you and good morning. You're quite right to pick out the Maidgen project as being a flagship project for tidal energy globally, I have to say. Members may be aware that the cables for that first array were laid over the past couple of months, so that's progressing well. What perhaps isn't as well known is the smaller project in Blue Mill Sound in Shetland, where cables again have been laid for that over the past couple of months and indeed the kit has been laid on the seabed in respect of that. Not all the eggs are in the one basket there. The ocean energy projects are moving ahead and being installed as we speak. We're continuing to invest in studies. A key one here is going to be the Esparta study, where we've got every UK offshore wind farm that's operating is now feeding into this project. What that's doing is providing a benchmark for the operation and maintenance of offshore wind farms. That's very useful, particularly for new entrants and for those existing in the field, to be able to benchmark themselves against what can be achieved and what can be expected and what frankly is good practice and what's not good practice. That's key to bringing down the levelised cost of energy and the operations and maintenance costs. That's been a key significant programme over the past few years. We're pleased that every operating offshore wind farm is contributing to that. Aside from that, we've been publishing data on our own marine data exchange and that's now the largest collection of offshore wind speed and direction data that's available. Again, looking forward, particularly on the ocean energy side, last month in fact we brought forward a new form of leasing for particularly small-scale up to 3 megawatts devices for tidal current and for wave energy. That's not being done as a window basis, but if you like that's been kept open. That should mean that there's a process available when the developers are ready to go forward, not that they don't have to wait for us opening a window anymore. It's there and ready for them to use when it's available. We've also taken steps to simplify the documentation around that and make it an awful lot simpler. One of the big things again associated with that is reduction in the number of milestones that small developers in particular had to achieve. That's been reduced from 18 to about two. That should reduce the bureaucracy both for the developers and for the Crown Estate in managing those to make sure that that's possible. Looking ahead in the offshore wind side, members will be aware that there will be a few crunchy decisions that have to be taken by offshore wind developers this financial year. We're working with them to assist in those coming forward as tenuously as we can. There are other projects in which the announcement forthcoming announcement respect of the next option for contract for differences is going to be key. Again, we're supporting some of the Scottish projects in their deliberations in respect of that. I think that I'm still convinced that offshore wind has a significant part to play in the energy mix going forward. I think that Scotland's got a significant part to play in that. On the ocean energy side, we're continuing to do what we can to push that industry further forward. The Maidgen and the Blue Mill Sound site with NOVA innovations are going to be key in driving forward technical innovation, operational innovation and that in itself will, it's hoped, increase investor confidence and that should become a virtuous circle going forward and will play our part to that most in making that happen. I think that that's a really useful overview. I suppose you mentioned the, you had a phrase which is quite a good one, the crunchy decision time coming up and this year is absolutely crucial given the big setback, some of who should say at the UK level. You've mentioned the Scottish Investment Bank, the Green Investment Bank, sorry, in the report you mentioned the rule that the Scottish Investment Bank is playing in the metal project. There's still the Green Investment Bank and the Scottish Government itself. Is there more that can be done to actually make sure those projects don't fall by the wayside or become things that are parked just because of the current financial uncertainty? Is there work that the Scottish Government could do and we've had support from marine rocks in the past that was a slightly larger support mechanism than in the rest of the UK? Are there key things that we could do in Scotland just to make sure that that investment actually comes through? Speaking to developers, they are very welcoming of the support that the Scottish Government has in the past been given. The consistency of messaging in respect of offshore renewables and offshore wind has been noticed and is very much appreciated by the industry. Maintainance of that is key going forward. The difficulty here is always going to be confidence and that level of confidence that the Scottish Government, that level of support that the Scottish Government has always given is key to keeping the offshore wind developers engaged and willing to invest the significant sums of money required to develop those projects. Just a final supplementary. We've focused on the really big projects going forward, which are absolutely crucial for the future of our economy and our environment, but you mentioned in passing small-scale leasing changes. Is there a way of getting that communicated more widely? What opportunity is there? Are you doing work with Cooperative Development Scotland to look at co-op models that I know have really taken off in the community renewable sector? We were very keen to speak about this at the recent Scottish Renewables Marine Energy conference in Inverness. The full team up there is speaking to the industry and the players. We have had 20 expressions of interest, I believe, already. I think that that's a healthy thing, but if members are aware of other ways that we can push this further forward, it's on our website, but we're happy to speak to people about that and new developers about that. I have to say that we have dialogues with new developers very regularly about the opportunities and what they can do. One of the key things, as I've mentioned, is that the process is now there and ready for them when they are ready. We're not having a stampede of applications just because there's a finite window at this particular point in time. As I say, if members are aware of any other project that's out there, please ask them to speak to us. Thanks, convener. Good morning, everyone. Staying with future energy initiatives, I have a constituency interest in carbon capture and storage, so I was pleased to see that it received some prominence in the report. I'm interested in, in particular, with SummitPowers' Captain Clean Energy project, which proposes up to 90 per cent carbon capture from a 500 megawatt queen coal plant. A note in the report that there's no mention of that particular project, however, there is mention of the CO2 injections to the Captain Aquifier under the Central North Sea. I'm just curious as to whether there's a continuing dialogue with SummitPowers and other project partners. Are you confident that such an exciting project can be delivered? We've also heard that there's the auction for contracts for difference. Will that have any bearing on whether the project goes forward or not? A number of points there. I'll try and capture them, but if I miss any, no doubt you can remind me. As to the on-going dialogue with regard to the inner forth and forth, there's a meeting signer next week or the week after, where a number of stakeholders are coming together, including ourselves. We've been very active in bringing the key participants together. There'll be ourselves representatives from the Scottish Government, from DECC, as well as industry there, trying to take a number of initiatives further forward. A key to that would be carbon capture and storage for some of those things. One of the other areas where we've been active this year and published a report is in respect of the interactions between injections into a CO2 storage site and multiple injections and how that would work. Again, that's an enabler for that Captain Clean project to go forward. We're aware of the shell interest in the GoldenEye site. That, again, is one of those ones where we're expecting financial decisions to be taken towards the end of this financial year. Carbon capture and storage is a very exciting part of the overall picture. Will CFDs play a significant part in that? Yes, they will. Again, those investments will require a significant amount of capital to take them forward and go forward. Again, the boards making those decisions for those investments will be looking very closely at the CFD regime and its access to that for those investment decisions, if I've missed anything. I will stay offshore then at the moment. Claudia Beamish. Thank you, convener, and good morning to you, commissioner, and to your colleagues today. Having been on the committee when the aquaculture bill went through the committee and became an act, as we all know, I would be interested if whoever it's appropriate to ask the question to could say something about the development. I see that there is the leasing of 850 sites. Members of the Crown estate staff sit on the various forums that have been set up, both to help to drive the industry forward and to ensure that we have appropriate marine environmental protections and to develop local economies, which can often be quite fragile. The report is very helpful in addressing the research that you are doing and various other issues. Are there any concerns, particularly, but if you want to make any more broad comments, any concerns in terms of environmental protection as we go forward, or if you feel reasonably comfortable about the sustainable targets? Thank you. I was discussing aquaculture the other day internally and asked what my team was up to, and I said that business is usual. There has been a lot of change even probably seven or eight years ago, and other members of the committee remember various calls for change to consenting regimes through the aquaculture industry. The industry is in good health, it is still a very aspirational growth target, and it is still a major contributor to Scotland's food and drink sector. From my point of view, rural communities are in that employment sector. The business as usual aspect is probably that it continues to deliver. The industry is in probably a period of consolidation. There are still all the vagaries of producing a world-class food product in a wild environment with the vagaries of international competition, weather, food disease, pestulence, et cetera—all those challenges—but they continue to deliver year on year. One of the biggest and most regular feedback issues that we get is consenting, and the challenge is involved in that process and making sure that there is a streamlined process through Government, Marine Scotland and their licensing and through all the other aspects, including turn-and-country planning, which is all the issues that you rehearsed through some of the discussions that it went through. As one of those actions was raised at one of our Scottish Liaison subgroups, where we get the industry together and say pretty much the same question that you just asked us, we said to the industry what is happening, what is going on, where are the challenges, and I think that consenting would probably have come through loud and clear. With that in mind, we are working with Scottish Government on a consenting review to look at an independent review of how that structure works and where any key trigger points or barriers might be with a view to trying to make that as simple as possible. Aquaculture continues to be a really important sector. There is a lot of detailed work going on with change of consenting regimes, but the industry would probably be in a period of consolidation following change and still wanting to significantly grow. There are still big growth targets that the industry is supporting, and I know that the Government has talked a lot about them as well. I see that continuing, but we have to remember that they are operating in a pretty challenging market at all times. I do not want to put words into your mouth, but you do not have particular environmental concerns coming from your site. You are putting research into looking at jellyfish blooms that I see in the report. I am not going to re-rehears the issues that came up in relation to the biomass and all the different issues around sea lice, which none of the committee likes to mention, but we have to face that conflicting research on that. There is a strong view on all agriculture issues regarding that. We are not the regulator of agriculture, but what we are trying to do is to make sure that where development comes up, that it can be achieved in a sustainable fashion. For agriculture, sustainable development goes so widely into the river systems and the law systems, the sea systems, into the communities and schools and so on. There is so much to be there. I think that what we have done for a very long time in the agriculture sector, whether it be the shellfish or the salmon sector, is to recognise that we are able to bring a strategic level approach to look at things on a national basis in exactly the same way as Ronnie talked about the energy side, to make sure that there is good data out there to allow correct decisions. I think that that is the key role that we would continue to play and to be able to look at those challenges on the ground at a much higher level to say how we can achieve that. In many of the areas of marine planning, you can end up being very insular to the small area of interest, to a consenting body, to an organisation who wants to take something forward or to a community. What we are trying to do is to make sure that that expertise is looked at at a more strategic level. That is what we should continue to do. The algal blooms thing can affect any area at any time, so let us do that at a national level rather than one small area trying to look at it. I think that that would be our approach. That is where industry see the greatest benefit from us and give positive feedback on that. I think that the environmental challenges will always be there and they need to be discussed and hopefully we can inform some of those discussions by keeping those at a strategic level. Mike Russell. Let me ask you about the practical devolution of some of your powers to communities. I am very familiar with how many of you are with the work at the Antobra Moray and the Harbour Association. It seems to me that that is a pretty good model of illustrating something on the front of your annual report working together for shared success. How do you build upon that model and where else could you apply it? I then want to put that into the mix with the possible devolution of powers to local authorities themselves, which might get in the way of doing that. I think that examples like Tobra Moray, where there is a really strong constitution group that worked very well. You have taken evidence from Brian and the team from Tobra Moray. I think that our relationship extends back to 2002. It has been an iterative process where phase 6 is being discussed now. To me, that is really simple. You have a well constituted group that knows what they are trying to achieve or OFAE with working with different bodies for that shared success. That is very simple. The LMAs, local management agreements that we talk about, are another iteration of that. Local communities and operators can say that we have an interest in an area and that we want to take something forward in a staged sort of process. I think that that works well. We have also talked in the past about mooring associations whereby a collective group of those interested in a certain area can form together, bringing economies of scale, organisation, maritime sort of navigational safety and actually far better management on the ground. Those are all examples of where it works well and it tends to be a well-organised group with common interests probably where it develops best. I think that that has always been something that we have looked to try and achieve, having queued local management and well structured and agreed. That is the same when we talk to oral or historic dealings with the councils and local authorities in terms of master agreements and things like that. Let us have a framework agreement that does that. I think that we can continue that. In terms of devolution to local authorities, again, it is probably not something that I can comment on because I think that that is still a matter up for discussion. I think that what you need to make sure, in a marine sense, is that people who understand the local areas are involved and that is where our greatest successes have been to date. That seems to be—maybe this is for Gareth rather than anybody else—a bit of a dichotomy between the desire of some people to be blunt to get their hands on your revenue. The coastal communities fund, although I have criticism of how it was set up, has been useful for coastal communities in Scotland. Local authorities are short of cash and are looking to get revenue. There is a dichotomy between trying to get people's hands on the revenue that they produce and the ability that they have to invest and have done in the longer term within communities in order to benefit those communities. I hope that that thinking is within your minds as you have conversations with local authorities who are keen to enhance their powers so that they are talking about the right use of those powers at the level in which they can make a difference. It is a very fair point, and here is the conundrum in the utilisation of those assets in particular in the coastal communities for their benefit. I think that what sits alongside that, as you have rightly identified, how do we take that forward? Clearly, there are liabilities around those assets. Some of the assets of the sea bed are extraordinarily complex, with a whole heap of commercial interests around that. Indeed, community and environmental interests around that. The role that we can best play in that, as I have said before, is not to be falling away from it. The level of devolution is absolutely for discussion between Scottish ministers and local authorities. I am very convinced about it and very determined about it. The expertise of the team helps to inform decisions about how that would go on and how the management would go on for that. Where the revenue flows is a minister for government and local authorities to discuss as long as we can keep those assets performing and to go back to that phrase, adding value to them. That is not just financial value, but the team will have done their job. If there is, in development, a devolved structure that keeps the expertise of the Crown of States together, you are obviously anagnostic in terms of how the revenue runs, with the exception of the ability to continue to run a profitable business that allows continued investment for the future. That would be a summary of where you are. Could I then ask you that, when you think about going forward, you also look carefully at the role of your agents? Although I rarely get direct complaints about you, I do get complaints about your agents. That may be inevitable, but it is important that communities feel empowered and communities feel able—that is one of the points of devolution—to engage with you as an organisation. If agents stand between you and that organisation and perhaps do things that cannot be understood, that makes life more difficult for everybody. I absolutely accept that, Mr Ruslan. Indeed, we have worked very hard to educate our agents and how we would expect them to carry out their business. I think that they have moved forward. Every now and again we are going to get a rogue incident that happens. I am a tenant farmer myself, so when you inject a word landlord, the temperature goes up when you put the other word agent in amongst it and it starts getting a bit volcanic. We are very sympathetic to that. As we move forward in the management of those assets, because the resource within the Bellsbury office is not sufficient to carry out all those on-the-ground negotiations and an overview of how those assets are performing, we needed to carry out that function by somebody somewhere. Going forward to get people in the right mindset to carry out that function is going to be really important. I am confident that we can do that, and Alan has much more experience of that than me. The key to that is to make sure that we have the right people doing the right things. The evidence sessions that you have had in previous areas, Elgar Finlay from Glendale, Brian Swinbank, who you are very familiar with, tend to be met with agents and my team together. Indeed, today, the coastal team are in Caithness in Sutherland. They were up there yesterday with the agents in partnership. If we look back at the LMAs and the forshore sales pilots, all those kick-off meetings have tended to be initial contact either direct to us through one of yourselves or an elected member or to an agent, and then the first initial proper meeting discussions done with both agent and team members in there. I think that that is the key. Managing agents is a general subject that the committee is hearing a lot about at the moment. We work really closely with our agents to make sure that they know where we are heading and the direction of travel. A lot of the work that I have been doing over the past few months has been about how that is taken to the next level. We have been engaging with the Scottish Land States and Community Land Scotland about advice to agents. I have been involved in the million-acre target working group on the barriers to supply of land and that side of things. I think that whole dynamic is something that we have worked very hard on and have produced guidelines for our agents. I have noticed with interest that Forestry, Commission and Forest Enterprise issued some stuff yesterday that I thought looked very familiar and it was good to see. I look forward to working with CLS and others to make sure that the agents do understand what is to be achieved in the ground. That point that you make about mutual success is genuinely something that our agents do understand. I know that it is reassuring. I will make one final and more general point. Mr Booth and I have crossed swords on a previous occasion about Fort Canard. If I may take a motto from elsewhere, I do hope in the process of devolution that the Crown of States Scotland that what you have you will hold and there will be no diminution of assets during the process of devolution. Do you want to address that on the rural coastal sector? What we are trying to do is run the business going forward, as we have always done. That has had an element of wheeling and dealing, an element of moving things and selling assets and buying assets. I see that going forward as part of the business as usual process to be honest. The overall value of the portfolio—you are a good stewardess of that value—does not diminish. I may put Fort Canard to one side. I, bluntly, think that that is a fix and not one that Scotland should be happy about. However, that is taken to one side. You have a valuable set of assets that could be and should be put to work for the future of Scotland. Yes, there is certainly no intention to undermine that value, but that is not to say that there will not be dealings going forward as part of the business. I understand that. Claudia Beamish is a question that is about offshore, and Graham Dey has. We will take Claudia first and then Graham, because I think that it is— Thank you. It is a small point, I believe. I see the commissioner from the report that it is highlighted that you have said that if I may quote it a personal highlight, as my role as commissioner has been the success of local management agreements and the adoption of many community ideas and initiatives. I know that it is not only a numbers game, but we followed this on committee for—others have been much longer than I have, but I have for the last four years. It would be very helpful to have some detail, if not now, in writing about how the local management agreements are developing and the numbers and something about the community initiatives as well. I do not know if any of the staff wishes to comment at this point briefly on that. We would be delighted to provide you with details on that. If I can just give you a personal view on that last back-end, I think, so the time is running together. We were up at Loch Maddie at the opening of their new pontoons and the injection of business and visitors into that small community has just been quite extraordinary. We had a great day getting it open. That really was a community initiative, driven very hard by very able people and a local landlord who had invested very heavily in it as well. The figures that are very blunt that struck me—there is a wee village shop during the season, where weekly income had gone up by £1,000 and the local hotel had gone up by £3,000 a week, and they were able to convert three part-time jobs to three full-time jobs in that wee community. That is great stuff. Funnily enough, the marine leisure tourism, which, as you know, is so successful in Scotland and the fragile communities, in the last two months of the season, had more than 300 yachts in order to really see what the new facility was like. It was a real quantum leap for that community. To see that delivery in there from their initiative was enormously fulfilling for all of us. I think that that is a really good example where the strategic meets the local. Gareth talked about the marine tourism side of things. We have the marine tourism strategy that was launched. There was a debate in the chamber about that. It is Awakening the Giant. There is a marine leisure symposium next month. That is where taking a really high-level approach to marine tourism to show the value to Scotland. The figures quoted on page 21 talk about 3,000 jobs in leisure and tourism in the marine sector. However, the Lokmadi example is somebody taking a very local idea and using an LMA to progress it, and we invest it. The Glendale Trust, Elgar Finlay, who you have had in front of you before, was literally standing at his community saying, I can now see the next point in the marine tourism strategy across the water, and we need to make sure that we have proper linkages. In the past, it has been at times communities have competed to say that we have facilities in next-door havens, but they are being far more strategic to say, how do we make sure that we can sail from Lokmadi down to Skye and be suitably looked after and accommodated? From my point of view, that is something that I get a lot out of, is that seeing those connections, we are now talking about the cool routes initiative across Europe, and that whole marine leisure strategy is starting to really piece together. When there is a single engagement at the Community Land Scotland AGM that I was at, talking to somebody who had never heard of the marine leisure strategy, and seeing the excitement and the realisation that their project could connect into something very quickly and start moving at a pace that they probably did not think was achievable, to me, it just showed that that connection of strategic and local really makes a big difference. I think that it is really exciting. I want to roll back a little bit about taking the sailing theme. I appreciate that you cannot really talk about the role that you think the Crown of State ought to have going forward, but I want to explore briefly what you are capable of doing or an element of that. When we talk about devolving control and power down to local authority level, I think that many of us would like to see it go beyond that and very much be concentrated in the communities. One of the arguments against that that will be put forward is that perhaps the communities do not have the capacity to take on that role. However, it strikes me and I welcome your comments on that. The expertise of the Crown of State with its local management agreements that engage them in the communities, you know what it takes to see that delivered. I just would welcome your thoughts on whether there might be, in theory and principle, a role for the Crown of State and its new guys to proactively be helping to build capacities into those communities that want to take control of the assets so that they become empowered to do it and have the ability to do it? If I could just kick that off, I really hope so. Alan, I will have much more experience. Community capacity is something that some people understand and others don't, even though it exists. We have a team of people, whether it be within the team, with the agents and our partners, who understand how to get the most out of communities. That is what floats my boat, I genuinely do. I can think of one example within the report, Port Gordon Harbour, some fairly difficult discussions. I was summoned to their meeting and they were pretty keen that I came and pretty clear about what the message was. That was an initially difficult discussion, which has now entered into a proper community-led full village engagement about the art of the possible. From pretty frosty beginnings to early but green shoots of proper engagement throughout that community to me shows that the people, the team, the engagement that we have done has helped. That is what our team are very good at. There are other teams around and there are partner bodies and bodies that you are all familiar with that do that well. All I want to make sure is that those opportunities can still grow and I will leave the politics to the politicians. I would like to turn to your agent or your staff visiting places. I heard Caithness in Sutherland in my constituency. Obviously, civil servants and development agencies visit people all the time. I do not know whether you might consider informing local members about impending visits of use, because it would be invaluable to us to know what is going on. I make that in a very general sense, because the day-to-day things are what normally happens. However, I will make that point now. One of the things that coastal agents do is to record all their engagements. Giving you a picture and summary of that would probably be useful. The offer continues to the committee to, if people want to engage with us on specific projects, be happy to come and do that if you want to see anything. Indeed, we will try to keep you abreast of developments. Mr Russell, our aquaculture team is on the ground in your constituency at the end of this week and all of next week. I know that for a fact that they are on mull looking at some issues. However, we will try to do our best to informally make sure that members know exactly what is going on on the patch. I would say that they are out and about a huge amount. I suspect that one or two of you might get bored of an email from me saying, just so you know that they are on the ground. However, I think that for key engagements we will be very happy to do so. I would like to turn to some questions that have not been asked so far. I am thinking about the balance sheet and so on but also about some of the strategic issues going forward. Thinking about the balance sheet, you point out that the property values have decreased because of the sale of coastal residential properties and rural residential properties, for example. Last time you were talking about some foreshore rights being sold as well. Is that included in the loss of value of assets? No. The Carlaway estate trust undertook a pilot foreshore sale purchase and it would be significantly further to the right in terms of number of zeros involved than would be represented in any change in value. The numbers were very, very small, so that is the only foreshore sale that has gone through very well, but it was a very de minimis amount. I was going to move on to a much bigger part of the overall balance. It is a question that I have asked Ronnie Quinn before this in terms of the way in which you might estimate the income from offshore assets in particular. You have come up in the past with formulae that perhaps shows what you can expect. In two parts, can you update us on that formula, for example, for offshore wind? Secondly, how does your projection then become part of your planning for the next part of your developments of the assets that you hold in the coming years? We have heard about investments on the landlord estate, but how does that projection affect the way in which you think about your own investments? I am happy to say that the numbers that you have given the committee and yourself in the past convener are still the same. For example, the formula for round 3 remains roughly in the region of about £7.6 million per gigawatt that is generating. For non-round 3s, that would be the STW sites. It is about £4.3 million per gigawatt that is generating. Those are estimated at 2020 values. For wave and tidal devices, it is something in the region of about £30 per annum for each 10 megawatts. So far as that revenue is concerned in our on-going planning, it really only has an impact in respect of targets that are met. The actual revenue in the way that the current estate operates is currently put into the Majesty's Treasury, so it does not form part of the on-going estate. A revenue stream is passed through to the Majesty's Treasury going forward that those revenues would transfer into Scottish ministers for their dispersement thereafter. Those increases in revenue of themselves do not become a significant part in the planning. Obviously, however, we have to take a longer-term view in the growth of on-going revenue to meet on-going targets. I would expect that, going forward, the new body might be given targets to meet by Scottish ministers. It would be at that stage that you would then look forward to what is likely to be expected, how we would meet those expectations, and then, taking that further forward, how we are likely to generate additional revenue to meet those targets. Traditionally, that has been a long-term investment in the current estate. Sorry, it was to follow up once you finished your questions to get in the queue. It's not about that. I want to continue on my line of arguments about projecting forward. Has the Crown Estate been thinking about how it might alter its salmon fishery activities or mineral policy with regard to the way in which the devolved assets might pan out? Have you been thinking forward in those areas about how they might be managed? I noticed, for example, that it said to have been a dry year or something like that. Therefore, there were lower catches in the salmon fishing side. All the operations that I look after for rural and coastal are looked at on a Scottish basis. We are always making sure that we take long-term decisions. Even before Smith was a vehicle and a discussion was occurring, we would be doing 5, 10 and beyond year planning as to what that would look like. We have always given thought as to how that might look in the future. As I say, we are keen to make sure that those assets continue to produce. To use Mr Russell's comment, what we have will continue to hold and it will continue to deliver, I think, is my main aspect of that sort of thing. You pick on salmon fishing and fisheries and mines, oil or minerals. Both are significantly challenged sectors for different reasons. Wild fish and climatic conditions on the river is having quite a big impact in terms of catch numbers and that sort of thing. In terms of minerals, the construction element in boom and coal and all that sort of stuff has other impacts. Both of those are probably more at the vagaries of variables that are outwith the control than probably rural, coastal and even to a slightly lesser extent aquaculture. However, we are always considering what they can offer long-term. I would like to see those assets continue to deliver what they are able, but they are limited and with some challenges. Mike Russell has a supplementary question. I probably cannot answer this here, but I would be quite interested to hear from you if there is a difference of approach to minerals on your land in Scotland than you would have in the rest of the UK. I asked the question because Scotland does not have, and I believe that it should have, a piece of modern minerals legislation. Whereas minerals legislation is different in other areas, I would be interested just to know what the policy situation is, because it will have a bearing going forward in terms of what the possibilities are. Our mineral operations used to be responsible on a UK-wide basis, and I am pretty familiar with them. There are different legislations. Other than Mines Royal, we have limited mineral exploration opportunities in the assets that we have onshore at the moment. However, as a duty to get best value, we need to make sure that we identify something from you, if that is possible. I would be happy to do so. Obviously, those are assets that need to be thought about, and modern minerals legislation in other parts of Europe, for example, treats them in a very sympathetic and environmental way, but countries do get more out of them than we do. That is an interesting point. From the point of view of Rob Booth, I think that you have come along, I think that we better just ask a question here. Thinking forward, thinking about the assets that we have been talking about in terms of those that are part of the scheme to devolve, would you see any difficulties with the fact that there are variables? We can see that the property values have gone down, but as long as the Crown Estate is making a profit, that is generally meeting the spirit of the 1961 act. It is part of the discussion in the Devolution Further Powers Committee and with the Treasury about the question about the removal of particular assets from the portfolio. Have you any further comments about that for us just now that might elucidate? I guess that there is an initial point to make, and Gareth referred to it earlier. We are putting in place some new structure in relation to how management of assets, particularly in Scotland, is undertaken with Ronnie taking lead responsibility for that and reporting directly to our CEO in relation to discharging what will be a separate business plan looking specifically at those assets going forward. At the moment, in relation to Scottish assets, we as an organisation have a UK-wide obligation to balance enhancing value and the return from them across all of our asset classes. Is that to Scotland's disadvantage? It depends on the market, on the opportunities and on what the right thing to do with those assets from time to time. Going forward, there is an advantage to a Scotland-specific body. The Scottish manager, whatever name Scottish Government decides to give that organisation, being able to look specifically at Scotland and not having to weigh that against a wider holistic assessment of everything that is going on a UK-wide basis. It is undoubtedly a more polarised and probably an easier way to look at it than doing that balancing exercise. As regards the split of assets, it is probably not the right way to describe it necessarily, but the devolution of our functions in relation to the Scottish economic assets in Scotland, I do not think that there has been a substantial move forward in relation to that, except to make sure that, since the last time I appeared here, we have been doing a lot of work with representatives of the Scottish Government to talk them through what the assets are, what the current constitution of the Crown Estate requires as regards the conduct of those assets and things like decommissioning responsibilities and some of the other responsibilities that sit around them. As to the actual ambit of what is transferring, I am not aware that that has shifted. I was concerned about the idea about no detriment, which has been discussed in terms of the Crown Estate assets and the wider questions of the devolved powers in the Scotland proposed Scotland bill that is going through Westminster at the moment. It would be up to the Scottish managers of the Scottish assets to decide how to deploy them. Absolutely. The use of and management of those Scottish assets going forward, subject to the caveat that I spoke to last time in relation to the underlying sovereign ownership of those assets, is entirely for the Scottish manager to work going forward. To that extent, there is potential perhaps to do more with that focus on Scottish assets than we are currently able to do under our existing legislation. Thank you very much, convener. I want to follow up the issue of Scottish assets by just clarifying what Scottish assets actually are. I want to pursue the issue of Fort Cunaird, so I want to move us into urban Scotland. We have been talking rightly a lot about rural Scotland, and it is following up information that we have from the cabinet secretary about how we define where Fort Cunaird sits. Previously, when we asked the question about its in Scotland, why is it not transferred to whatever becomes the new management structure in Scotland, we were told that, although it is in Scotland, it is not actually part of the Crown Estate because of all the complex legal ownership issues. We understand that, and yet the restriction on the transfer that would stop Fort Cunaird coming to the new entity in Scotland describes it as part of the Crown Estate. Does that not defeat the argument that, even though it is not wholly owned by the Crown Estate, the Crown Estate has an interest in it and that the property is in Edinburgh? Has there been any progress about that? It is quite a big chunk of property that would make a great deal of sense to sit in the property portfolio in Scotland, notwithstanding the fact that it is not wholly owned by the Crown Estate. Certainly, I was aware of the reference. I guess that there is a degree to which semantics is perhaps slightly unhelpful in relation to describing an asset as part of the Crown Estate, economic asset in Scotland. From our perspective, looking at it from a technical analysis, our interest is directly in the English limited partnership. That English limited partnership owns multiple properties, one of which is in Scotland. Is our interest in the ELP part of the Crown Estate? Yes, it absolutely is. It is something that we manage. Are the shareholdings that sit around that wider structure a part of the Crown Estate? Yes, again, they are because they are things that, via the holding structure and, hopefully, which came through clearly in the fact sheet that we followed up our last appearance with, they are Crown Estate assets. The question here is whether Fort Cyned is an economic asset managed by the commissioners in Scotland. The answer to that on the basis of the structure that is there and the construction of Smith that we certainly are confident in our reading of it would conclude that Fort Cyned, as a Scottish property, and there's no dispute about it being a Scottish property, isn't an economic asset managed by the commissioners in Scotland? No, it isn't currently totally accept that. We're just talking about what happens next. When we do get devolution, it's certainly a huge economic asset in the area, and it's people in the area that are generating that economic asset by using the retail park. I just wanted to keep it back on our agenda. Was that on the same point, Claudia? No, it's a short new point. It's a new point, right? Graeme Dey was first and then yourself. As we discussed today, those are uncertain times for everybody connected with the Crown Estate, not least of all the staff. I'm conscious that it must be very uncertain for some of you guys and your colleagues. I'm assuming that as we're moving forward in transitioning to the new arrangements, there will be dialogue going on between the management of the Crown Estate and the Scottish Government about how the new body might look, what roles it might take on operational practices, et cetera. I'd just like to be satisfied that, as that's happening, and I'm assuming that it is, that your staff are being given an opportunity to feed into that process, to shape the new arrangements. Is there some mechanism there that allows them to say, well, we actually think that this could work better if we did X, Y or Z? Thank you, yes. Very valid point. You're quite right to identify that there is a degree of uncertainty amongst the staff just now. We're doing what we can to mitigate that level of uncertainty. As an example, we got a letter in Ystaby from the Scottish Government advising us about some future happenings that was sent out to all the staff members this morning, frankly, so that they're aware of it as soon as we could make that available. So far as the staff are inputting to it, we're keen to work with the staff on that and with the unions, as has to be said. As luck would have it, we've got another session on Monday, where we get all the Scottish staff together and go through what's happening. We go through where we are, and Monday's session, in fact, has a bit about business planning and how we shape this going forward. We're doing as much as we hope we can to keep the staff engaged and involved in this, but we're aware that this is a difficult time. It's a time of uncertainty. We're bringing in external consultants to assist with wellbeing, robustness, stress and so on. That's an on-going process. We're very conscious of that impact and how that has the potential to impact the staff. The results that we've had this last year, as Gareth said, are really a testament to the professionalism of the staff that they're doing the day job and getting on with that in what are uncertain times. I won't say anything other than that. Almost every meeting that we have with tenants, with developers and stakeholders, there's an element of what's happening next. The staff are dealing with that on a daily basis, so they're as well informed as they can be. I could add to Mr Dage my own personal perspective on that. For me, in a non-executive role, this has been the number one element that I've been concerned with in Scotland to keep the morale, the confidence and the delivery of the staff at the very high level. It's been a tough time for them and they've shown remarkable resilience in getting on with the day job. We had an enormously helpful community from the Scottish Government last night, which gave them more certainty about the future. The consultant that Ronnie referred to is an absolute first-class HR operator. She has been instrumental in keeping everything right to the forefront for our team. I might say that our head of HR from NBP has been up on a regular basis, as has our chief executive. She committed absolutely to our team that they would know everything that came to the fore as soon as she knew it. She has absolutely carried that out to the nth degree. I think that our team is very confident that they're getting whatever news is coming forward. As I said, this community last night will really help them. My personal ambition around that was that we would get this fantastic resource retained in place for the transition to get those assets working flat out for Scotland on day two or day one. We're closer to that. That's a major step forward. I've raised the issue in the past. I'd be interested to know if, as a commissioner, if any of the staff present today are able to comment on, as things go forward, with your mission statement, the possibility of the addition of a social remit to that as we move forward. I know that it's early days, but in terms of what I've certainly seen since the short time of only four years on committee, there has been a perhaps a sea change in my own perception and stronger connections with communities, which I feel very positive about. I'm just wondering if that social remit aspect has either been discussed or where you see that going. I'll start from an overall perspective. I'm sure that that will be a matter for ministers for direction under the new structure, whatever that is, as Alan has already referred to for the team engaging with communities and being able to help them. For Ronnie and his team for engaging with developers who are taking colossal risks, that's a part of the job. That's where we get the fulfilment out of it and seeing those initiatives develop. The more they're proposed or thought about by our stakeholders, the better. I think that the key here is that they're not seen as separate things. They're part of the business. As Alan mentioned earlier, that commercial element that we take forward just now, as Alan said, is where our stakeholders and where our tenants and customers are moving forward and winning. We're moving forward and winning as well, so there's a synergy there. We don't see them as separate things. Thank you very much for that. You talked about building stronger local economies. I was interested to know how the procurement process for producing this excellent report is handled and if there's any possibility of it perhaps being published and printed in Scotland? I'll be honest, it's part of a larger procurement programme for publication as to who publishes it. I'm afraid I don't know. Anyway, I just thought that we might note a little help that we can perhaps add to what's been said from the point of view of the staff and from the point of view of certainty and so on, because we now understand that the report stage of the Scotland Bill will take place on the 9th of November and that amendments are being lodged this week, so that will bring some certainty at least to the first part of that process. I have to say that it's been very useful to have you here to explain in detail what you're doing, because it's going to become a feature, I think, very permanently of future committees' activities to monitor and to encourage and to probe. We'd like to thank you very much for all your evidence today. It certainly shows that our engagement over the last few years has led to some very fruitful and useful sessions indeed. So thank you very much, Gareth and your team, and we will now conclude this part of the meeting by me saying that at the next meeting of the committees on the 2nd of November, the committee will be in Dumfries for our final evidence session on stage 1 of the Land Reform Scotland Bill and will be hosting a public engagement event the afternoon before the committee formally meets in the evening to hear from the Minister for Environment, Climate Change and Land Reform, and tickets for both events are free, and those wishing to attend can contact the clerks of this committee for further details. As agreed earlier, we will now move into private to consider our work programme and I now close the public part of this meeting and ask the public gallery to be cleared. Thank you.