Scottish Government

Executive Summary

Purpose and Intended Effect

The Scottish Government is committed to delivering a Scottish Marine Bill which will put in place mechanisms to improve stewardship of the seas around Scotland. The policy areas which the Bill aims to act on are:

• marine planning: delivering a new system of marine planning for the sustainable use of Scotland's seas out to 200 nautical miles (nm);
• marine licensing: a streamlined and modernised marine licensing and consent system in order to reduce administrative burden;
• marine conservation: improvement to marine nature conservation to safeguard and protect Scotland's marine assets,, with "ecosystem" at the heart of management and closer integration of marine historic environment site protection with marine nature conservation;
• improving understanding of the seas through science and data generation; and
• a new Scottish marine management organisation, Marine Scotland, to deliver sustainable seas for all.

As part of the legislative process, the Regulatory Impact Assessment sets out the costs, benefits and other impacts of proposed legislation. Science and data generation, and Marine Scotland, are not directly covered by the Bill but are included in the consultation "Sustainable seas for All". They are required for the purpose of the Bill to be achieved and are therefore covered in this RIA.

Marine Planning

There are two main options in relation to marine planning. These are:

• Option 1: no change; and
• Option 2: implement a statutory marine planning system.

Under Option 1, there would be little or no formal integrated planning of activities. Although high-level marine objectives might exist, stemming from national and international initiatives, there would be no system to 'unpack' these and to deliver objectives at lower levels in an integrated way. Decision-makers would need to take account of the high level objectives through the licensing system. This Option would risk continuation of the current situation, where conflicts and uncertainty about uses of the marine environment could result in costly delays, less efficient use of marine space and deterioration of the marine environment. There may be some short-term benefits from this option, in that policy-makers, businesses and marine users will not have to change their behaviour. However, it is likely in the longer term that political and economic pressures on the marine environment will ultimately require alternative solutions and consequent modifications in activity.

A statutory marine planning system would consist of three tiers; international requirements under the European Marine Strategy Directive and OSPAR objectives; a national marine policy statement, objectives and a Scottish Marine Plan; and 9-13 local plans within Scottish Marine Regions. Not all areas would need plans; they are only necessary where there are activities to plan and the potential for conflicts. There are potential benefits for all stakeholders from marine planning. The scale of the benefits is impossible to quantify, as it will depend on the way in which planning operates in practice, and the specific features of each plan. However, if planning avoids the costs of conflicts, delays and compensatory measures associated with the current system, the benefits could be substantial. A 1% increase in gross added value from the marine economy could generate benefits of £294 million over 20 years (discounted), while more rapid approval of marine energy projects could bring benefits of £5.5 million over 20 years (discounted). There could also be benefits in terms of increased tax revenues. The option would also generate non-economic benefits, from the improved capacity to meet environmental objectives.

The total cost to the Scottish Government of the national marine plan is estimated to total over £7 million over 20 years (discounted), an average cost of nearly £500,000 per year. This cost includes plan preparation and consultation, implementation and review. Local plans could cost an additional £36 million to £66 million over 20 years (discounted), an average annual cost of £2.5 million to £4.5 million, for 9 to 13 plans. The total cost for a marine planning system would therefore be £43 million to £73 million over 20 years (discounted) or an average annual cost of £3 million to £5 million. There will be some additional costs to Historic Scotland, local authorities, other organisations, industry and other stakeholders of participating in the planning process. For local authorities, these are likely to be offset by reduced costs in dealing with planning applications. There could be longer term costs to some industry sectors, if planning results in greater restrictions on activities in specific locations.

There is a further potential option, of implementing a non-statutory planning system. This would still involve collation of marine data and information, accompanied by the setting of marine objectives and priorities. Spatial plans would be developed largely as outlined above, but there would be no statutory requirements for decision-making authorities to act in accordance with them. The main risk with a non-statutory system of planning is that plans, once produced, might not be adhered to. The process and costs involved in developing the plan are largely the same as for a statutory planning system, but with fewer benefits.

Licensing and Enforcement

The current licensing regime in Scotland comprises a variety of licences, seeking either to protect features of the marine and coastal area from the impact of marine development, or to mitigate the impact of developments. The key aim of changing the current system is to deliver an effective, streamlined and modernised licensing system.

There are four main options for streamlining the system of licensing and enforcement. These are:

• Option 1: no change to current arrangements;
• Option 2: amalgamate FEPA Part II, CPA Part II and CAR licences for marine activities into a single licence;
• Option 3: amalgamate CPA Part II, FEPA Part II, CAR licences for marine activities, wildlife, aggregates and any other activity licences into a single licence; and
• Option 4: create an activity-based licensing system.

There are also two sub-options, which could be combined with the main options:

• Sub-option A: controls for capital and maintenance dredging. This sub-option can be combined with Options 1, 2 and 3;
• Sub-option B: following a CAR-type approach for small projects. This sub-option could be combined with any of the options.

Option 1 would maintain the current situation, with 16 types of consent administered by more than ten organisations/departments, at an estimated annual cost of £2.1 million to £2.7 million per year to the Scottish Government, £304,000 to £380,000 to local authorities and £123,000 to SNH, passed on to applicants (industry) in the form of licence fees. The advantages of this option are that no new legislation would be required; all stakeholders are familiar with the current situation and there would be no costs or job losses associated with streamlining the current licensing regime. The main disadvantages are that the objectives of the Scottish Marine Bill would not be met, and the licensing regime would remain complex and resource intensive. The limited evidence that is available, both in Scotland and from elsewhere in the UK, suggests that multiple licenses from a range of licensing bodies with different consultation requirements is not an efficient way to deliver marine environmental objectives.

Option 2 would reduce the number of licence applications required, thus simplifying the licensing application and processing system for both industry and regulators; provide integrated licensing, ensuring that a range of environmental/ecological and navigational issues are considered together and could assist in delivery of both existing obligations and objectives and new ones, for example marine planning and nature conservation. This could generate annual savings to regulatory authorities (Scottish Government and SNH) of £150,000 to £168,000 and annual savings to industry of around £170,000. However, it would require the introduction of new legislation, incurring costs for Government and stakeholders and potentially causing (temporary) disruption to the licensing system; it would require the re-training of staff, both within industry and the regulators and it could potentially lead to the loss of up to one full-time equivalent job within Government due to improvements in efficiency.

Option 3 is similar to Option 2, but would go further by amalgamating the wildlife and aggregate licences with CPA Part 2, FEPA Part 2 and CAR licences for marine activities. This Option would have similar advantages and disadvantages to Option 2 for authorities, but would have the added advantage for industry of providing greater integration in regulating the ecological impacts of marine developments. This could result in direct cost savings to industry of around £177,000 to £197,000 and direct savings to regulatory authorities (Scottish Government, local authorities and SNH) of £159,000 to £204,000. It could also lead to the loss of up to one full-time equivalent job within Government due to improvements in efficiency.

Option 4 presents an alternative approach to Options 2 and 3, by developing integrated licences for particular activities, such as a renewable energy licence, a port and harbour licence and an aquaculture licence. Further types of licence would be required to cover any other activities. This could generate direct cost savings for the Scottish Government, local authorities and SNH of £342,000 to £515,000 per year and direct cost savings for industry of £512,000 to £672,000 per year. The indirect cost savings to industry, from reduced delays, could be significantly greater. It could also lead to the loss of 2 to 2.6 full-time equivalent jobs within authorities. The key issue with having only activity-based licences is in defining the activities to be licensed. If only a small number of activities are licensed, there is a risk that impacts caused by other activities would not be managed, but a large number of different activity licences would risk repeating the complexities of the current system. However, some consultees felt that this was not a major issue, as a relatively small number of well-defined activities would require licensing. Combining activity-based licences for some activities, with general licences for other activities, would also add to the complexity of the system and fail to achieve the objective of streamlining.

Sub-option A can be combined with Options 1, 2 and 3, or it could be a stand alone option. There is currently no single act which regulates dredging operations in Scotland, although some operations are controlled by the Harbours Act 1964 and the CPA. A FEPA Part 2 disposal licence is normally required to dispose of dredged materials in the sea. However, methods such as hydrodynamic and plough dredging techniques are exempt from FEPA licensing, as the sediments are not raised from the surface of the water and therefore no disposal takes place. The main risk associated with this option relates to the potential impact on hydrodynamic and plough dredging. The total cost to industry of introducing licensing for hydrodynamic and plough dredging may be between £487,000 - £1.2 million per year, depending on the number of occurrences, the quantity of material moved, the associated level of fees charged and the requirement for environmental sampling, modelling, monitoring and reporting. Any increase in the costs may result in a decline in use of the techniques, thereby reducing the environmental benefits. The advantage of the option would be to ensure the full evaluation of the chemical and physical impacts associated with the use of hydrodynamic and plough dredging.

Sub-option B would introduce a simpler system of registration for small, uncontroversial projects. The advantage of this sub-option, which may be introduced along with Options 2, 3 or 4, or as a stand alone option, is that it may reduce the administrative burden and associated costs for both industry and the regulators. The main risk associated with this Option is that it may cause further confusion, as stakeholders will have to distinguish between three different levels of activity in determining whether a licence is necessary for their activities. The net savings are estimated at £121,000 per year.

Marine Nature Conservation

The three main options in relation to nature conservations are:

• Option 1: no change;
• Option 2: make better use of existing measures, e.g. voluntary reserves, marine nature reserves legislation; and
• Option 3: implement new measures and policies out to 200nm.

Under Option 1, Scotland would continue to meet the current conservation objectives and legal commitments through existing legislation. There would be no changes to marine nature conservation policy and no new species conservation or site protection measures. This option would not incur additional costs for Government; however, there would be no long-term benefits. The main disadvantage associated with this option is that gaps in the current nature conservation regime would remain; it would not support achievement of existing national and international commitments and could lead to deterioration of the marine environment. If such deterioration resulted in a 1% reduction in the economic value of marine environment-related sectors, this could result in losses of £14 million over 20 years (discounted). There could also be an equivalent loss in the non-economic value of the marine environment.

The main disadvantage associated with Option 2 is that it might fail to deliver the Government's commitment to establish a network of marine protected areas. While it might prove possible to protect some important sites through existing marine nature reserve provisions, previous attempts at using these powers have generally resulted in failure. Similarly, whilst gaps in species management and protection might be partly addressed by extending the range of species considered under the Biodiversity Duty, this is essentially a non-statutory measure and may not secure the level of compliance necessary to result in measurable improvements. Costs to government will depend upon the number of biodiversity action plans set up (these cost between £23,000 and £500,000 per plan, with surveillance and enforcement costs of around £198,000 per plan) and the number of marine nature reserves (costing £24,000 to £33,000 per reserve to set up and £14,000 to £22,000 per year for surveillance and monitoring). The costs to industry would depend upon the specific controls that were introduced as a result of the option. There may be additional costs to NGOs and individuals, in relation to responding to consultation, of perhaps around £4,000 to £14,000 per consultation.

Option 3 would involve identifying marine ecosystem objectives, new powers to identify, designate or recognise particular locations of biodiversity importance and delivery of site and species protection measures within a marine planning framework. Developing zoning mechanisms within the marine planning system could cost around £485,000; this is part of the cost of marine planning. The main risk is that this could prove to be ineffective in protecting nature conservation features or that there may be gaps in the data required to support formal site protection, leading to delays in identification and protection of a marine protected area network.

There would be costs to Government in developing, implementing and monitoring marine ecosystem objectives and designating marine protected areas. Setting up 10 - 20 new marine protected areas could cost from £6.6m to £15.5m (discounted over 20 years at 3.5%) or £433,000 to £1,020,000 in annual costs. The costs to industry would depend upon the restrictiveness of the protection measures introduced. A partial restriction regime in marine protected areas could cost industry several million pounds if the site was of high value for oil and gas or shellfisheries. However, if the measures resulted in improvements in marine nature conservation management, the benefits could be significant.

Seal Licensing and Conservation

Options for reforming the licensing system for management of seals include:

• Option 1: a 'no change' option, which forms the baseline;
• Option 2: full reform of the existing legislation;
• Option 3: extend licensing to fish farms;
• Option 4: an outright ban on the shooting of seals.

The 'No change' or Option 1 entails a potential risk that seal conservation status may not be being adequately although it is not considered to be an actual risk at present. There is also a risk under this Option that seal management across all fisheries sectors may not be on an equal basis. The option will not generate any additional benefits nor give rise to additional costs.

Under Option 2 the need to apply for a license to shoot seals would be extended beyond the 'close season' to apply all year round and the provision to apply for a license would be extended to fish farmers to protect cages or stock. The current risks to seal conservation, and the risk of unequal treatment of sectors, should be eliminated under this Option 2. The number of licences issued is likely to increase, but is not known by how much; the actual number of seals shot would also increase, but a marked difference is unlikely. Since seal killing will be more closely managed and monitored, the total numbers shot might reduce over time. Extending licensing all year round should reduce the potential risk of any impacts on wildlife tourism. The removal of the 'netsmen's defense' should be compensated for by inclusion in the licence process, but may possibly result in increased damage or loss of fishing gear in a few cases. The potential costs cannot be assessed due to lack of information on the current encounter rates of seals with fishing gear and the level of damage inflicted.

The only reform to the current legislation under Option 3 would be to extend the licensing powers to fish farms, enabling them to apply for licenses to shoot seals during the close season or under conservation order, for the protection of cages or stock. This Option carries a potential risk to seal conservation status, although this is reduced by the power to introduce seal conservation orders to protect vulnerable populations. It would mean that all fishing sectors would be subject to the same controls and monitoring as required by the EU Habitats Directive. The potential costs to the aquaculture sector would be similar to those under Option 2.

Under Option 4, there would be a complete ban on the killing of seals with no exceptions. There are significant increased risks under this Option to aquaculture and wild capture fisheries, through increased damage to fish cages, escape of fish from damaged cages (which creates a risk to genetic diversity of native salmon stocks as a result of cross-breeding of native and farmed fish) and predation on stock. Option 4 may result in improved seal welfare and conservation, potentially leading to increased growth and economic value of wildlife-related tourism. It is not possible to estimate the potential economic cost to fisheries due to lack of information on the current level and cost of seal impacts on fisheries and aquaculture nor how such damage might change in the absence of control measures. In addition, economic costs may be incurred through increased investment in alternative non-lethal methods of predator defence. Any negative impacts on native fish populations could potentially impact on the significant economic value of these fisheries.

Protecting Scotland's Most Important Marine Historic Assets

The options in relation to protection of Scotland's most important marine historic assets are:

• Option 1: no change; and
• Option 2: implement new measures out to 12 nm.

Under Option 1, there would be no change to current arrangements. Scottish Ministers through Historic Scotland would continue to apply the Protection of Wrecks Act 1973 ('the 1973 Act') and Ancient Monuments and Archaeological Areas Act 1979 ('the 1979 Act'). There are ongoing costs to Scottish Government and risks associated with this option. The licensing associated with the 1973 Act is widely considered overly burdensome and experience in Scapa Flow with scheduling under the 1979 Act has also pinpointed difficulties with application of this legislation underwater. As a result, stakeholders with a legitimate interest in designated marine historic assets may continue to experience dissatisfaction with existing provisions. Moreover, existing legislation does not provide the scope to enable Scottish Ministers to protect the full range of marine historic assets that can be found on the seabed.

Option 2 would involve implementing a new system of historic MPAs out to 12 nm for marine historic assets of national importance, similar to that proposed for nature conservation. This is likely to incur one-off transitional costs of £25,000 in 2010-11 and 2011-12, over and above expenditure required for existing mechanisms. There are currently 15 designated/scheduled wrecks under existing provisions. Pending re-assessment, these could be de-designated altogether or included within the new provisions.

Scottish Ministers have indicated that it is not their intention to significantly or rapidly increase the number of designated marine historic assets. However, it seems likely that there will be a modest increase in numbers over time give an expanding knowledge base and a broadening in the scope of what types of historic asset can be protected through the new mechanism. Carrying out prioritised assessments of the most important historic assets for designation as well as ongoing high priority recording/monitoring work on designated sites, advising on management of these, and providing support through management agreements and grant aid is likely to cost Scottish Government £200,000 per year (£4 million over 20 years). The costs to industry would depend upon how restrictive the level of protection introduced. However, experience under existing legislation suggests that the costs are likely to be relatively small because the designated areas are small (generally circular areas of 100-250 metres radius) and therefore mostly avoidable.

Science and Data

In order to carry forward the range of measures in the Marine Bill, there is a need for further science and a mechanism to agree its interpretation. There is also a need for greater coordination between the academic community and the wider stakeholders and policy makers. The control and organisation of data flows will be key to delivering sustainable development in Scotland's seas.

The options in relation to science and data are:

• Option 1: no change; and
• Option 2: develop a marine science strategy.

Under Option 1, there would be no change to current arrangements. Existing marine science activities would continue to be carried out by organisations that are currently responsible for them. Coordination between research activities could be encouraged on an informal basis and through marine planning. The key risk with this option is that it would fail to generate the data needed to deliver the objectives of the Marine Bill. There would also be a related risk of infraction proceedings for failure to comply with the EU Marine Strategy Directive. Option 1 would incur no costs for the development of a new strategy, nor would it result in any substantive disruption to the functioning of marine research. However, any costs arising from current inefficiencies in marine science and data would continue (see Section 4) and, indeed, would be likely to grow as pressure on marine space and resources increases.

Option 2, development of a marine science strategy, would provide a mechanism for directing scientific effort into areas of importance, focusing research effort and allowing stakeholder input into the scale and direction of marine science in Scotland. It could also co-ordinate science and industry involvement, providing more coherent data capture and storage. To provide for monitoring and assessment of Scotland's seas consistently and to rigorous standards, responsibility should lie with a single body. The proposal is that Marine Scotland should take on this role, with the assistance of a group of scientific advisers.

The main benefit of Option 2 would be to allow scientific effort to be directed into areas of importance, focusing research effort into where it could make the greatest contribution to achieving the aims of the Marine Bill. It could also have a significant role in developing objectives to determine the nature of, and limits on, use of the seas within the context of sustainability. A sound scientific basis for identifying uses compatible with sustainability could help to ensure that restrictions on use, and the costs associated with this, were minimised whilst meeting the goal of sustainability. Option 2 could give rise to some additional costs, including those associated with setting up of Marine Scotland and supporting a national database, estimated at around £150,000 per year. If the marine science strategy identified a need for expansion of research effort, there would also be associated costs.

Marine Management Arrangements

The options for marine management arrangements are closely linked to the options on other policy areas, as these will determine the requirements to be managed. There are two main options:

• Option 1: no change; and
• Option 2: set up Marine Scotland as an integrated body with responsibility for policy, marine planning, science, regulation and licensing and compliance monitoring and enforcement.

Under Option 1, no Marine Scotland would be set up. Instead, existing activities would continue to be carried out by organisations that are currently responsible for them. These existing organisations could take on any new requirements, such as marine planning. Option 1 would incur no additional costs, but it would have no long-term benefits. It risks marine planning and strategy development becoming an additional tier of regulation, rather than an integral element of marine management. It would also pose a risk of failure to deliver the objective of streamlined decision-making, with continuing potential for inconsistency in decision-making and uncertainty amongst stakeholders about responsibilities for the marine environment. This could potentially be mitigated by introducing statutory requirements for the various organisations to take account of marine planning and to co-operate in achieving its aims.

Under Option 2, a new organisation called Marine Scotland would be set up. Its responsibilities would include lead responsibility for marine planning and for underpinning science and data; the current responsibilities of Scottish Government, Fisheries Research Service and the Scottish Fisheries Protection Agency for marine and freshwater fisheries and aquaculture management; lead responsibility on marine nature conservation and responsibility for administering a better integrated system of marine consents. The key risk associated with this Option is that changing existing arrangements could be complex, disruptive and costly. It could also disrupt existing linkages across policy areas and across the marine/terrestrial divide. In order to fulfil its responsibilities, Marine Scotland would require significant resources. The cost of preparatory work to establish Marine Scotland - up until 1 April 2009 - has been estimated at around £400,000. Other additional costs, and some cash releasing efficiency savings, will accrue and may be attributable to establishment/transition (rather than the costs of marine management function delivery). Detailed work is underway to assess these costs and savings more precisely - but which will depend on some strategic and other decisions yet to be taken. Stakeholders responding to the consultation indicated there could also be benefits for local and democratic accountability, if Marine Scotland works in partnership with local authorities.

There are a number of potential variations between these options. For example, Marine Scotland could take on only some of the potential roles under Option 2, or it could act as a 'virtual' integrated body, providing a single interface for stakeholders. The costs of such variations will lie between those of Options 1 and 2.

Overall Impacts

This report has assessed the potential impacts of options, including no action, within a range of different policy areas. The Scottish Government has committed to delivering a Marine Bill which will include:

• marine planning: delivering a new system of marine planning for the sustainable use of Scotland's seas;
• marine licensing: a streamlined and modernised marine licensing and consent system in order to reduce administrative burden;
• marine conservation: improvement to marine nature conservation to safeguard and protect Scotland's marine assets, with "ecosystem" at the heart of management and closer integration of marine historic environment site protection with marine nature conservation;
• science and data generation; and
• a new structure, Marine Scotland, to deliver sustainable seas for all.

Although there is considerable uncertainty over many of the costs and benefits, because they will depend upon the specific measures adopted, the 'do nothing' option has fewer benefits and could incur significant costs, in terms of failure to meet objectives and reduced productivity from the marine environment.

This report has assessed the potential impacts of options, including no action, within a range of different policy areas. The findings indicate that the no change options would risk continuation of the current situation, where conflicts and uncertainty about uses of the marine environment could result in costly delays, less efficient use of marine space and deterioration of the marine environment. There may be some short-term benefits from this option, in that policy-makers, businesses and marine users will not have to change their behaviour. However, it is likely in the longer term that political and economic pressures on the marine environment will ultimately require alternative solutions and consequent modifications in activity.

Although the options for change to the system involve costs for the Scottish Government and for other stakeholders, the benefits are potentially significant. For example, a 1% increase in gross added value from the marine economy could generate benefits of £294 million over 20 years. There would also be significant non-economic benefits.

The analysis indicates that the greatest net benefits are likely to result from a new approach to managing the marine environment which incorporates:

• a new system of statutory marine planning for the sustainable use of Scotland's seas;
• a streamlined and modernised marine licensing and consent system in order to reduce administrative burden;
• implementing new measures and policies for nature conservation (including reform of seal licensing and conservation and new measures to protect Scotland's most important marine historic assets);
• developing a marine science strategy; and
• setting up a new structure, Marine Scotland, to deliver sustainable seas for all.

Although there is considerable uncertainty over many of the costs and benefits, because they will depend upon the specific measures adopted, the benefits of these policy options are likely to outweigh the costs significantly, whilst the 'do nothing' option has few benefits and could incur significant costs, in terms of failure to meet objectives and reduced productivity from the marine environment.