8 REVIEW OF STATE CONTROL
Introduction
8.1 Most policy instruments seek to influence private individuals and businesses, but public intervention can extend to substituting direct state control for private-sector activity, as an alternative way of attempting to secure the desired benefits. This can be, for example, through public ownership of resources such as land and/or through the use of state employees to deliver goods and services. 5 As with regulations, state control represents a shifting of property rights from private land owners to society, in this case represented by the state.
8.2 The main advantage of state control is that it avoids any reliance on private sector behaviour. In principle this ensures adherence to best management practices by appropriately trained and motivated staff and can avoid the significant costs of administration, monitoring and enforcement that often accompany the use of voluntary or regulatory measures applied to individuals. By avoiding the need for on-going measures directed at private land owners, it may also reduce exchequer costs in the long run (Colman, 1994).
8.3 However, bureaucratic control can itself be subject to internal variation in capacity and behaviour meaning that desired outcomes are not guaranteed. Moreover, as with regulation, costs tend to be raised and/or outcomes diminished by a general tendency to uniformity of approach rather than allowing flexibility and innovation in the face of heterogeneity (Boyd & Hyde, 1986; Ellefson et al., 1997; Bemelmans et al., 1998; Gunningham & Grabosky, 1998; Peters & van Nispen, 1998; Scleifer, 1998; Hodge, 2000; Kilgore & Blinn, 2004; Cubbage et al. 2007; Goulder & Parry, 2008)
Scottish findings
8.4 State control through land ownership is relatively rare in the UK, compared with North America for example. The Scottish audit (see Appendix B6) identified the National Forest Estate as the main example, with specific Forestry Commission programmes for timber production and recreation on the state land. SNH owns some National Nature Reserves and manages them for biodiversity and earth science conservation alongside public recreation and tourism. Scottish Enterprise owns some business parks that include, or are adjacent to, rural land. Scottish Water is an important land owner and uses controlled tenancies and covenants to control agricultural activity on its land. The Scottish Government is landlord of a number of crofting estates in the Highlands and Islands.
8.5 The National Forest Estate is important in both the case study areas, and consultees highlighted a number of ways in which it delivers local as well as national benefits. The original purpose of the estate was security of national timber production and that is still relevant. But in addition Forest Enterprise decisions help to underpin local timber production chains by smoothing fluctuations in private sector output caused by changing timber prices. This also applies to other forest products, particularly venison.
8.6 The large scale of state forest ownership in both Dumfries and Galloway and in Skye also brings a strategic perspective to planning timber transport (both by road and sea), with Forest Enterprise playing a leading role alongside other stakeholders. Consultees also argued that state control of forestry had led to rapid adoption of multiple use objectives in forestry - both directly on the forest estate and indirectly through demonstration, practical information provision and training for the private sector. Without this the private forestry sector, would arguably not have delivered as much public benefit. Finally, consultees highlighted examples of how the forest estate had been used to contribute to tourism and business parks, both of which are important to the local economy but would not necessarily be supported as strongly by private landowners.
8.7 The other main example of state control in the case study areas is the SG's crofting estates. Whilst its role as a landlord is very restricted, consultees cited examples where SGRPID, DCS, and FE had worked with crofting tenants to develop a concerted approach to deer control and venison production.
International experience
8.8 In other countries many governments rely on direct land ownership and management to some extent. This appears to be most prevalent in relation to forest land (Government's own 80% of the world's forests), nature reserves and national parks where there is overwhelming public interest in how land is managed. For example, the US Forest Service manages 193 million acres of forest and grasslands for public benefit whilst in New Zealand, the Department of Conservation manages 14 national parks, 26 conservation parks, hundreds of reserves, many offshore and sub-Antarctic islands, and numerous other places such as historic sites. In many instances, state ownership is seen as a complement to working with private landowners, recognising that not all desirable public benefits can be achieved on public land alone. Cubbage et al, (op cit) suggest that while demands for public ownership and management of forest land continue, the nature and level of government control remains crucial and there are increasing calls to devolve more control to local communities.
8.9 For governments, the question of whether to bring or maintain land in public ownership is one of costs and benefits. Do the benefits of public ownership and management outweigh the costs and could those benefits be achieved more efficiently and cost-effectively by influencing the behaviour of private landowners? One argument against state control is that it precludes private innovation and flexibility and may be less efficient than private sector management. New Zealand's experience of exiting from plantation forest ownership would appear to support this argument. Publicly owned forests were sold to a number of overseas and local companies which invested in new processing plants or expanded existing ones. However, the process was aided by the fact that the majority of the forests in question were commercial in nature and did not have significant conservation or multiple use values. Forests with such value were largely retained in public ownership.
8.10 Public ownership of land occurs in many countries with state ownership of forests being particularly prevalent. Increasingly such ownership is justified on the basis of public goods delivery rather than timber production although public forestry authorities are also frequently active in facilitating timber processing and developing markets. All governments need to weigh up the benefits of public forest ownership against the costs and assess whether there are more effective and efficient ways of delivering public benefits. This is as relevant in Scotland as elsewhere
8.11 Notwithstanding recent government responses in other sectors to the global "credit crunch", the popular perception of state control in land use remains somewhat negative with a presumption that seeking to achieve desirable outcomes through private individuals is preferable. Given the dominance of private ownership and prevailing ideological stances, this perception may simply reflect a pragmatic approach. However, it is worth noting that state control remains relatively significant in some areas.
8.12 International experience suggests that state control of land can be important in achieving public good outcomes either through direct management or, increasingly, through working in partnership with tenant and wider communities who appreciate that ownership of land can represent a liability as well as an asset.
Conclusions
8.13 Ideological considerations have been at least as important as economic efficiency in determining the extent to which state control of land use has been practised over the last century. In Scotland in 2009 the extent of state owned land is largely an inheritance from previous eras, but a proportion of state ownership would seem to deliver benefits that would not arise if voluntary instruments such as market incentives were to be relied on exclusively.
8.14 In particular, state controlled land use contributes to research, demonstration, and provision of advice. It is also apparent that it is more prevalent where management issues are long term, such as in forestry and biodiversity conservation. Consultees highlighted the role of state control in developing strategic planning, and in security of production and ameliorating market fluctuations. All these benefits apply at both local and national levels.
8.15 Critics of state control assert that it is not as responsive to changing conditions, nor as innovative and entrepreneurial, as private and third sector land management. It would be difficult to rigorously evaluate the two approaches, bearing in mind the complex outcomes sought and the long timescales involved. What can be described are the likely effects of changes: if state control of land was reduced a possible increase in entrepreneurship/innovation would accompany a loss of research and advisory resources, some loss of strategic co-ordination, and an increase in exposure to market variability (assuming other things were unchanged).
8.16 It is also clear that the mix of state and private/third sector land use provides useful interactions, with each side benefiting from the other. It is less clear whether this interaction is fully recognised and taken advantage of, and it may be worth reviewing and building on the potential benefits.