Scottish Government

8. Options for Marine Management Arrangements

8.1 Options

8.1.1 Introduction

In order to deliver the objectives of the Marine Bill, there will need to be an effective system of management for the marine environment. A range of options has been identified in relation to marine management arrangements; the two extremes of this range are:

• Option 1: no substantive change to current management arrangements. This represents the baseline for comparison with other option; 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 to the limits of devolved responsibilities.

There are a number of potential variations within and between the two 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 impacts of such variations will lie between those of Options 1 and 2.

Clearly, the options for marine management arrangements are closely linked to the options on other policy areas of the Scottish Marine Bill, as these will determine the requirements to be managed. For example, if no system of marine planning is set up, there will be no need for management of the planning process. Similarly, any changes to the licensing regime will affect the workload associated with licensing. However, any costs and benefits associated with setting up a system of marine planning or changes to licensing are attributable to those policy options, and not to the options on management arrangements. This section focuses solely on the difference in costs and benefits between delivering other policy options through Marine Scotland and through the current management arrangements.

In the remainder of this section we describe the main features of Options 1 and 2; set out the potential risks that an option could incur, the likelihood of their occurrence and potential mitigation options; and discuss how they could be implemented.

8.1.2 Option 1: No Change to Current Arrangements

Main Features

Under this option, no Marine Scotland would be set up. Instead, existing activities would continue to be carried out by organisations (including relevant parts of Scottish Government) that are currently responsible for them. Any new activities, for example marine planning, would be allocated to one or more of these existing organisations.

The existing organisations could also be required, through statutory provisions if necessary/appropriate, to co-ordinate, integrate and streamline management and regulatory activity, systems and processes. Agreed marine objectives would be pursued through planning, strategy development and partnership working, in a form of 'virtual integration'.

Potential Risks

The key risk with this option is that it would fail to deliver Ministers' aim of sustainable economic growth in the marine environment and the objectives of the Marine Bill, in particular the potential new function of marine planning (see Section 4) and the implementation of the EU Marine Strategy Directive. There would also be a related risk of infraction proceedings for failure to comply with the Directive. There is a risk of marine planning (if introduced) and strategy development becoming an additional tier of regulation, rather than an integral (core) 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. It would fail to deliver efficiency benefits in terms of reduced costs for both Government and industry - for example from integrated and streamlined consenting processes and better co-ordinated and integrated compliance monitoring arrangements (including, notably, through better utilisation of expensive sea-going assets).

The likelihood of the risk of failure to deliver effective marine planning is quite high; however, it 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.

The risk of failure to deliver streamlined decision-making could also be mitigated, partly at least, by a requirement for cooperation amongst decision-makers and, potentially, by having a single interface for stakeholders on marine management. This role would probably need to be taken by part of the Scottish Government and could include, for example, a single web portal for all aspects of marine environmental management.

Finally, there is a risk that inefficient collection and use of data may also arise without a strategy from a single organisation coordinating research funding and efforts. The impacts could include additional costs of research and data collection and sub-optimal decision-making, by regulatory bodies and industry, on marine management and development issues.

8.1.3 Option 2

Main Features

Under Option 2, a new marine management organisation (Marine Scotland) would be set up, integrating new and expanded roles and responsibilities with the existing marine management functions of a number of currently separate organisations. It would have an overarching role to promote sustainable economic growth in a marine context, balancing the range of interests and considerations, with detailed responsibilities including:

• lead responsibility for marine planning in Scotland (if introduced) and responsibility for underpinning science and data;
• the current responsibilities of the Scottish Government, Fisheries Research Service and the SFPA for marine and freshwater fisheries and aquaculture management;
• lead responsibility on marine nature conservation, with Scottish Natural Heritage retaining its statutory advisory responsibilities;
• responsibility for administering a better integrated and streamlined system of marine consents. The precise activities will depend on the outcome of options on the consents system (see Section 5) but there are two main sub-options:
• Marine Scotland takes responsibility for administering all marine consents, including any combined marine consents; or
• Marine Scotland takes responsibility for administering only some of the consents, but acts as a 'front door' for applicants for all consents;
• ensuring more consistent, efficient and effective monitoring of, and action on, compliance, in liaison with others; and
• over-arching responsibility to ensure sustainable management of marine and coastal areas.

The necessary resources for Marine Scotland to fulfil its responsibilities would be provided through a mix of transferring existing funding provision alongside responsibilities and functions from current organisations, some new funding provision and savings from efficiencies (for example, from combining services and integrating and streamlining currently separate processes).

Potential risks

The key risk associated with this Option is that changing existing arrangements could be complex, disruptive, costly and detrimental to industry/Scottish interests overall. However, these risks are mainly short term, arising during the set-up of Marine Scotland and the time it takes to 'bed in'. These risks could be mitigated by managing the timing and phasing the set up of Marine Scotland and the transfer of responsibilities to it. New responsibilities, such as marine planning, can be taken up immediately by Marine Scotland, once the legislation is in place. By contrast, transfer of licensing responsibilities, for example, could be phased, in connection with any changes to the licensing regime (see Section 5), to ensure continuity and minimise disruption and delay.

There are also potential risks associated with the disruption of existing linkages, including 'horizontal' linkages across policy areas and across the marine/terrestrial divide. These risks are potentially longer term but could be mitigated by putting into place arrangements for Marine Scotland to continue to cooperate and coordinate with other organisations on these issues.

An additional risk is the availability of sufficient resources and expertise to operate an integrated licensing system, if introduced (see Section 5). A possible mitigation strategy would be to use Marine Scotland as a single access point to the licensing framework, rather than carrying out all licensing work itself. Under this scenario, for instance, Marine Scotland would act as the one stop shop/front door for licensing, but SEPA would in fact continue to regulate impacts in the water environment under CAR. This option would be similar to the variant of Option 1 of having a single interface for stakeholders on marine management.

8.1.4 Comparison of the Options

Table 8.1 summarises and compares the features of the two options.

Table 8.1: Summary of Options for Powers to Deliver Marine Management Arrangements

8.2 Sectors and Groups Affected

The stakeholders affected by options on marine management arrangements are all of those carrying out activities, or having other interests, in the marine environment. They are listed in Table 8.2.

Table 8.2: Sector and Groups affected by Options on Marine Management Arrangements

Under Option 1, there will be limited change to the current situation. Existing roles and relationships would, largely, be maintained, but with relationships needing to be developed on new/expanded functions (such as marine planning) and to improve on co-ordination of respective organisations' activities. There would be no body with an overarching marine management role, capable of taking a holistic, balanced view and to whom stakeholders might look as the principal marine management authority. Sectors which face delays and uncertainties due to lack of coordination under the current situation (see Sections 4 and 5) will continue to do so, with growing demands on marine space and resources increasingly likely to exacerbate that position.

Under Option 2, all of these sectors will face changes to their current arrangements and relationships. This could lead to short-term disruptions, as both the sectors and Marine Scotland become familiar with the new arrangements and processes. New relationships would need to be developed between Marine Scotland and the various sectoral interests, based on a more holistic view of the marine environment and its management.

8.3 Benefits

8.3.1 Benefits of Option 1

Benefits could arise under Option 1 if existing organisations are required, through statutory provisions if necessary/appropriate, to co-ordinate, integrate and streamline management and regulatory activity, systems and processes. In this case, Option 1 could address some of the costs of lack of co-ordination, and potentially delay, identified in Sections 4 and 5. It could also address some of the current problems for the marine environment arising from lack of coordination, outlined in Section 4 and Annex 1.

8.3.2 Benefits of Option 2

Option 2 could generate significant benefits in co-ordinating the actions needed to meet the Scottish Government's marine objectives and to achieve its overarching aim of sustainable economic growth. This will particularly be the case if new obligations, such as marine planning (see section 4) or integrated licences (see section 5), are introduced. This could both increase the certainty that the objectives will be met and generate efficiency savings.

Overall, there are a number of areas of potential efficiency savings:

• Enforcement: the SFPA vessels could assist with monitoring and enforcement of nature conservation policies (as indeed they currently do in the offshore zone adjacent to Scotland under a service level agreement with Defra) and a wider range of marine licensing and consent conditions;
• Data: bringing together data and resources currently held by FRS, SFPA and SG - and with scope to co-ordinate and integrate more widely with SEPA, SNH and others - provides an obvious basis for more comprehensive and better co-ordinated research and data to meet the significant data needs of marine planning and management;
• Planning: the creation of Marine Scotland could improve the delivery of planning functions (if marine planning is introduced) by setting out national-level issues and perspectives and on which regional/local plans could build and ensuring links to terrestrial planning and Integrated Coastal Zone Management. In addition, there could be benefits from the coordination of planning and licensing within a single organisation. Developers will be better able to assess the likely outcome of the applications as the plans will set a clearer context for decision making; and
• Combined/shared corporate and support services: there is evident scope for efficiency savings - allowing resources to be redirected back in to front line delivery - from integrating currently separate corporate and support service activities and assets of SFPA, FRS and SG in particular. These are discussed further in section 8.4.1 below.

By ensuring that licensing decisions take account of marine plans and nature conservation objectives, Marine Scotland will be able intervene where devolved activities threaten to damage fishing grounds or the wider ecosystem, giving rise to additional environmental benefits. These benefits are difficult to quantify, however, as it will depend on the number of damaging activities that are halted, the speed with which this can be achieved and the level at which marine objectives are set. Some examples of the potential benefits are given in Section 6.

The Impact Assessment for the UK Marine Bill identifies a range of benefits from setting up a Marine Management Organisation. These are shown in Table 8.3. None of the benefits are quantified in the Impact Assessment.

Table 8.3: Potential Benefits of a Marine Management Organisation

For Scotland, however, the benefits will depend on the final status of Marine Scotland, i.e. whether it is a Non-Departmental Public Body, an Agency or part of the Scottish Government. Establishing Marine Scotland as part of the Scottish Government would seem to offer the most benefits in terms of the potential to integrate policy and delivery functions (subject to the availability of appropriate flexibilities and business support arrangement to ensure effective operations); and greatest scope for efficiencies (notably in combining new with existing functions and shared service provision). There are, however, some attendant sensitivities about bringing together policy, science and enforcement functions, which would need to be managed.

8.4 Costs

8.4.1 Costs to Government

Option 1

Option 1 would incur no costs for the setting up or running of a new organisation and would not result in any substantive disruption to the functioning of marine management. However, any costs arising from current inefficiencies in marine management would continue (see Sections 4 and 5) and, indeed, would be likely to grow as pressure on marine space and resources increases. Current duplication of corporate and support service provision across separate organisations, with associated costs, would continue. There would also be costs associated with any new requirements, such as marine planning or changes to nature conservation requirements, including the costs of compliance monitoring and enforcement. These costs are addressed in the sections on the relevant policy options.

The costs of this option will thus be the current costs of existing organisations responsible for marine management, together with the additional costs of any new activities (such as marine planning - see Section 4). Consultation with the Scottish Government (Marine Directorate and others), SEPA, FRS, SNH, SFPA and local authorities has provided a range of estimates of current costs. These are shown in Table 8.4.

Table 8.4: Ongoing Costs to Government of Marine Management Arrangements - Option 1

Option 2

Option 2 could give rise to some additional costs.

In order to fulfil its responsibilities, Marine Scotland would require significant resources. The costs of preparatory work to establish Marine Scotland - up until 1 April 2009 - have been estimated at around £400,000 to £500,000. This represents largely the salary and related costs of staff in the SG Marine Transition Unit working on transition issues, plus associated consultancy work and support. Other staff, in the Scottish Government, FRS and SFPA, are contributing to transition work, with their costs being met largely from within existing resource provision.

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. The major cost elements are anticipated to relate to:

• IT integration;
• HR-related issues associated with re-structuring and re-organisation

There are, however, expected to be cash release and/or efficiency savings from:

• integration/rationalisation of senior management, corporate and business support structures; and
• integrating new with existing functions, for example by combining marine planning with wider marine policy and strategy roles and responsibilities, thereby reducing resource needs compared to having separate arrangements; and
• reduced governance requirements/costs, for example by removal of the current requirement for separate external audit of the accounts of FRS and SFPA and the production of separate plans and annual reports.

IT Integration

The SG Marine Directorate and the SFPA, which it is planned would form part of Marine Scotland, largely operate within the Scottish Government ( SCOTS) IT and electronic document handling (e RDM) arrangements. This facilitates email, diary and document sharing etc. Fisheries Research Services operates its own, separate arrangements, which amongst other things provide appropriate capabilities to support science-based IT applications.

It will be essential for Marine Scotland to operate on the basis of integrated IT arrangements. If Marine Scotland were to be established as part of SG, that means operating within SCOTS arrangements. At the same time, there is a need to continue to provide for science-based applications.

A feasibility study is underway to explore related technical and other issues, costs and options related to IT integration; this is expected to report shortly. That will inform choices and related (transition and ongoing operating) costs for Marine Scotland's IT systems and management arrangements.

HR Costs of Structural and Organisational Change

Structural and organisational changes - including those referred to above - will inevitably impact on some existing posts and individuals. New opportunities are likely to arise as a consequence of new functions and responsibilities planned for Marine Scotland (such as in relation to Marine Planning), which may allow some re-deployment of affected individuals within the organisation. However, there may be some re-deployment within the wider Scottish Government, with potential associated costs such as re-location expenses.

The costs of any such moves are extremely difficult to forecast currently, and depend a) on decisions on key elements of organisational change, its timing etc; and b) any harmonisation and/or re-deployment costs, which will depend on the circumstances of the individuals/moves concerned. However, we understand the intention is not to enforce mobility provisions (for non senior staff), so overall re-deployment costs are not anticipated to be high.

Integration/rationalisation of Senior Management Structures

Work is on-going to establish a fit for purpose senior management structure for Marine Scotland but it is inevitable that there will be a degree of integration/rationalisation from which will accrue cash releasing efficiency savings in due course. It is difficult to estimate precisely what that saving might be in advance of decisions of the shape of the new senior management, and lower level, structure..

Integrating/Rationalising Corporate and Business Support Services

Bringing together currently separate organisations offers opportunities to integrate and rationalise some services/support arrangements - though regard has to be had to the need for Marine Scotland to be responsive and able to deliver effectively its front line services. Any changes to existing arrangements need to be carefully managed to ensure continuity of business - as part of a 'managed evolution' approach to development of Marine Scotland's role and responsibilities.

Again, work is underway to explore in more detail options, and related costs/savings, for integrated (including, where appropriate, shared) service delivery. This includes in relation to IT, HR, Finance, Estates, fleet (vessel, aircraft, vehicle) management and procurement functions and responsibilities: and options for staff and resources to be integrated either into wider SG arrangements or inside Marine Scotland.

Integrating new and existing functions

Integrating new functions, for example related to marine planning, extended marine nature conservation measures and better integrated licensing and compliance monitoring activity, alongside existing roles and responsibilities inside a single, integrated structure will allow for synergies, savings and efficiencies compared to the structures and support arrangements that would be required should roles and responsibilities be held separately/amongst diverse organisations. Precise comparators are difficult, but the expectation would be of relatively substantive savings in annual running costs as a consequence of reduced staff requirements.

Reduced governance requirements

SFPA and FRS are currently subject to external audit arrangements and are required to produce separate corporate and operational plans and annual reports. Bringing governance and reporting requirements together into a single body will (depending on its status and even allowing for some additional costs arising out of an elective, pro-active approach to 'publicity') produce annual cost savings potentially in excess of £100,000.

Overall estimate of cash releasing efficiency savings arising from integration / rationalisation activity

As noted above, it is difficult at this stage to be precise on cash-releasing and efficiency savings, as a result of current uncertainties, for example about the numbers and grades of posts likely to be impacted upon by integration/rationalisation activity. Transition from current arrangements will take time and will involve some (in some cases potentially substantive) cost. However, initial estimates suggest that, after an initial transition management period, there will be cash releasing and/or efficiency savings of the order of £1 million to £1.5 million annually as a consequence of the establishment of integrated marine management delivery arrangements. These could be affected, for example, by the one-off costs and ongoing savings benefits of the early severance/retrial scheme. However, it is uncertain at this time what the impacts of this will be. These efficiencies would be available to contribute to efficiency targets and/or to the costs of the additional functions to be undertaken by Marine Scotland as a result of the Marine Bill.

In addition to its central operation, it is likely that Marine Scotland would need a local presence, in order to carry out its enforcement role and to facilitate stakeholder involvement in marine planning. This could be delivered either through existing regional offices of the organisations that would make up Marine Scotland or through the creation of new offices, potentially in partnership with existing bodies such as local authorities. .

8.4.2 Costs to Other Stakeholders

Option 1

Option 1 would not result in any disruption to the functioning of marine management and thus there would be no costs to stakeholders associated with disruption. However, any costs arising from current inefficiencies in marine management would continue (see Sections 4, 5 and 6). There could be costs associated with new requirements (such as marine planning). However, these costs are a result of the relevant policy options, rather than the means of delivery, and thus are allocated to those policy options.

Option 2

There should not be any additional ongoing costs to other stakeholders from Option 2 . However, there will be some initial costs in becoming familiar with the new arrangements. These should be minimised, as Marine Scotland will be made up of existing organisations and staff changes are expected to be limited. There may also be indirect short-term costs of disruption, as the organisation is set up. These should be minimised if the switch of functions to the Marine Scotland is carefully managed.

8.5 Small/Micro Firms Impact Assessment

Almost all of the industry sectors identified in section 8.2 include some small and micro-sized firms.

Option 1 will not pose additional costs for small firms; however, the current costs arising from uncertainties and delays could continue and seem likely to rise as pressures on marine space and resources increase over time.

Option 2 could benefit small firms, as the improved efficiency and effectiveness of marine management could reduce delays and uncertainty, which could be particularly significant for small firms. Cost increases to small companies could arise, but these will stem from the different policies, as highlighted in the relevant sections (e.g. planning, conservation), rather than from setting up Marine Scotland alone. Having a single contact point for all aspects of marine management, rather than needing to contact a number of different bodies, could also particularly benefit small firms.

8.6 Competition Assessment

Neither Option 1 nor Option 2 is likely to have any adverse impact on competition. Option 2 is likely to have a positive impact on competition, by producing a more equitable situation both across and within different industry sectors from new marine planning and licensing and enforcement arrangements.

8.7 Enforcement, Sanctions and Monitoring

Under Option 1, responsibility for compliance, monitoring and enforcement of marine management measures would remain with the organisations currently responsible. Under Option 2, these responsibilities could be taken on by Marine Scotland. Reserved issues would continue to be addressed by the respective departments within the UK Government, in consultation and collaboration, hopefully, with Marine Scotland.

8.8 Summary

Table 8.5 summarises the costs and benefits from the different options related to marine management. Although there are limited costs in the short terms under Option 1, continuing with the current system, there is potential that the objectives of the Marine Bill will not be met and that current inefficiencies will continue. There will be some on-off costs in setting up Marine Scotland, but potential longer-term benefits are expected from increased efficiency.

Table 8.5: Summary of Impacts of Options to Deliver Marine Management Arrangements