Crown Estate

The Crown Estate

Statutory corporation overview
Formed	1961 (1961)
Jurisdiction	United Kingdom
Headquarters	16 New Burlington Place, London, W1S 2HX
Employees	397
Statutory corporation executive	Robin Budenberg, Chairman
Website	www.thecrownestate.co.uk

The Crown Estate is a collection of lands and holdings in the United Kingdom belonging to the British monarch as a corporation sole, making it the "Sovereign's public estate", which is neither government property nor part of the monarch's private estate.^[1][2][3][4] As a result of this arrangement, the sovereign is not involved with the management or administration of the estate, exercising only very limited control of its affairs.^[5] Instead, the estate's extensive portfolio is overseen by a semi-independent, incorporated public body headed by the Crown Estate Commissioners, who exercise "the powers of ownership" of the estate, although they are not "owners in their own right".^[1] The revenues from these hereditary possessions have been placed by the monarch at the disposition of Her Majesty's Government and thus proceed directly to Her Majesty's Treasury for the benefit of the British nation.^[1][6][7] The Crown Estate is formally accountable to the Parliament of the United Kingdom, where it is legally mandated to make an annual report to the sovereign, a copy of which is forwarded to the House of Commons.^[5][8]

The Crown Estate is one of the largest property managers in the United Kingdom, overseeing property worth £12 billion,^[9] with urban properties valued at £9.1 billion^[10] representing the majority of the estate by value. These include a large number of properties in central London, but the estate also controls 792,000 ha (1,960,000 acres) of agricultural land and forest, more than half of the UK's foreshore, and retains various other traditional holdings and rights, including Ascot Racecourse and Windsor Great Park.^[11] Naturally occurring gold and silver in the UK, collectively known as "Mines Royal", are managed by The Crown Estate and leased to mining operators.^[12][13]

Historically, Crown Estate properties were administered by the reigning monarch to help fund the business of governing the country. However, in 1760, George III surrendered control over the Estate's revenues to the treasury,^[4] thus relieving him of the responsibility of personally paying for the costs of the civil service, defence costs, the national debt, and his own personal debts. In return, he received an annual grant known as the Civil List. By tradition, each subsequent monarch agreed to this arrangement upon his or her accession. However, from 1 April 2012, under the terms of the Sovereign Grant Act 2011 (SSG), the Civil List was abolished and the monarch was thenceforth provided with a stable source of revenue indexed to a percentage of the Crown Estate's annual net revenue (currently set at 15%). This was intended to provide a long-term solution and remove the politically sensitive issue of Parliament having to debate the Civil List allowance every ten years. Subsequently, the Sovereign Grant Act allows for all future monarchs to simply extend these provisions for their reigns by Order in Council.^[2] The act does not imply any legal change on the nature of the estate's ownership, but is simply a benchmark by which the sovereign grant is set as a grant by Parliament.

History

Crown land in England and Wales

The history of the Crown lands in England and Wales begins with the Norman conquest.^[8] When William I died, the land he had acquired by right of conquest was still largely intact.^[14] His successors, however, granted large estates to the nobles and barons who supplied them with men and arms.^[15] The monarch's remaining land was divided into royal manors, each managed separately by a seneschal. The period between the reigns of William I and Queen Anne was one of continuous alienation of lands.^[16] The Crown lands were augmented as well as depleted over the centuries: Edward I extended his possessions into Wales, and James VI & I had his own Crown lands in Scotland which were ultimately combined with the Crown lands of England and Wales.^[17] However, the disposals outweighed the acquisitions: at the time of the Restoration in 1660, the total revenue arising from Crown lands was estimated to be £263,598 (equal to £35,690,675 today).^[18] By the end of the reign of William III (1689–1702), however, it was reduced to some £6,000 (equal to £886,054 today).^[19]

Before the reign of William III all the revenues of the kingdom were bestowed on the monarch for the general expenses of government. These revenues were of two kinds:^[20]

• the hereditary revenues, derived principally from the Crown lands, feudal rights (commuted for the hereditary excise duties in 1660), profits of the post office, with licences, &c.
• the temporary revenues derived from taxes granted to the king for a term of years or for life.

After the Glorious Revolution, Parliament retained under its own control the greater part of the temporary revenues, and relieved the sovereign of the cost of the naval and military services and the burden of the national debt. During the reigns of William III, Anne, George I and George II the sovereign remained responsible for the maintenance of the civil government and for the support of the royal household and dignity, being allowed for these purposes the hereditary revenues and certain taxes.^[20]

As the state machinery expanded, the cost of the civil government exceeded the income from the Crown lands and feudal rights; this created a personal debt for the monarch.

On George III's accession he surrendered the income from the Crown lands to Parliament, together with abrogating responsibility for the cost of the civil government and the clearance of associated debts. As a result, and in order to avoid pecuniary embarrassment, he was granted a fixed civil list payment and the income retained from the Duchy of Lancaster.^[21] The King surrendered to parliamentary control the hereditary excise duties, post office revenues, and "the small branches" of hereditary revenue including rents of the Crown lands in England (which amounted to about £11,000, or £1,499,917 today), and was granted a civil list annuity of £800,000 (equal to £109,084,906 today) for the support of his household, subject to the payment of certain annuities to members of the royal family.^[21]

Although the King had retained large hereditary revenues, his income proved insufficient for his charged expenses because he used the privilege to reward supporters with bribes and gifts.^[22] Debts amounting to over £3 million (equal to £216,265,586 today) over the course of George's reign were paid by Parliament, and the civil list annuity was then increased from time to time.^[23]

Every succeeding sovereign down to and including Elizabeth II renewed the arrangement made between George III and Parliament and the practice was, by the nineteenth century, recognised as "an integral part of the Constitution [which] would be difficult to abandon".^[20][24] Nevertheless, a review of funding arrangements for the monarchy led to the passage of the Sovereign Grant Act 2011, which according to HM Treasury, is:^[25]

A new consolidated grant rounding together the Civil List, Royal Palaces and Royal Travel grants-in-aid. It is intended that future funding will be set as a fraction of The Crown Estate revenue and paid through the annual Treasury Estimates process, and subject to full National Audit Office audit. . . .

The Grant is to enable The Queen to discharge her duties as Head of State. i.e it meets the central staff costs and running expenses of Her Majesty’s official Household – such things as official receptions, investitures, garden parties and so on. It will also cover the maintenance of the Royal Palaces in England and the cost of travel to carry out royal engagements such as opening buildings and other royal visits. . . .

While the amount of the Grant will be linked to the profits of the Crown Estate, those profits will continue to be paid in to the Exchequer; they are not to be hypothecated. Setting the Grant at a percentage of profits of the Crown Estate will help to put in place a durable and transparent framework.

In April 2014 it was reported that the Crown Estate is proposing to sell about 200 of its 750 rural homes in the UK & was evicting tenants in preparation.,^[26][27]

Crown land in Ireland

In 1793 George III surrendered the hereditary revenues of Ireland, and was granted a civil list annuity for certain expenses of Irish civil government.^[21]

As in Scotland, the Crown lands in Ireland comprised a miscellany of feudal dues, land acquired for forts, and forfeitures especially after 1688. In the early 1830s the Crown Estate resumed possession of land in Ballykilcline following the insanity of the head lessee. The occupational sub-lessees were seven years in arrears with their rent and the result was the Ballykilcline "removals" – free emigration to the new world in 1846. There is evidence of Crown Estate public work schemes to employ the more distressed in improving drainage etc.^[28] In 1854 a select committee of the House of Lords concluded that the small estates in Ireland should be sold.^[29] 7,000 acres (2,800 ha) were subsequently sold for circa. £25,000 (equal to £2,116,215 today) at auction and £10,000 (equal to £846,486 today) by private treaty: a major disinvestment, with reinvestment in Great Britain.^[19]

From 1 April 1923, as regards the Irish Free State, Irish land revenues have been collected and administered by the Irish government. At the time of handover to the Irish Free State, quit rents totalled £23,418 (equal to £1,204,548 today) and rent from property £1,191 (equal to £61,261 today).^[19] The estates handed over mostly comprised foreshore.^[30]

Crown land in Scotland

It was not until 1830 that King William IV revoked the income from the crown estates in Scotland.^[31] The hereditary land revenues of the Crown in Scotland, formerly under the management of the Barons of the Exchequer, were transferred to the Commissioners of Woods, Forests, Land Revenues, Works and Buildings and their successors under the Crown Lands (Scotland) Acts of 1832, 1833 and 1835.^[32] These holdings mainly comprised former ecclesiastical land (following the abolition of the episcopacy in 1689) in Caithness and Orkney, and ancient royal possession in Stirling and Edinburgh, and feudal dues.^[30] There was virtually no urban property. Most of the present Scottish estate excepting foreshore and salmon fishing is due to inward investment, including Glenlivet Estate, the largest area of land managed by the Crown Estate in Scotland, purchased in 1937,^[33] Applegirth, Fochabers and Whitehill estates, purchased in 1963, 1937 and 1969 respectively.^[34]

After winning the 2011 Scottish election, the Scottish National Party (SNP) called for the devolution of the Crown Estate income to Scotland.^[35] In response to this demand, the Scotland Office decided against dividing up the Crown Estates. However, plans have been developed to allocate some of the Crown Estate income to the Big Lottery Fund, which would then distribute funds to coastal communities.^[35] These plans have also been criticised by the SNP.^[35]

Present day

Crown Estate Act 1961

The Crown Estate now is a statutory corporation run on commercial lines by the Crown Estate Commissioners under the provisions of the Crown Estate Act 1961. Under the Crown Estate Act 1961 the Crown Estate Commissioners have a duty "while maintaining the Crown Estate as an estate in land [...] to maintain and enhance its value and the return obtained from it, but with due regard to the requirements of good management".^[36] The Act provides among other things that (Section 1(5)) "The validity of transactions entered into by the Commissioners shall not be called in question on any suggestion of their not having acted in accordance with the provisions of this Act regulating the exercise of their powers, or of their having otherwise acted in excess of their authority, nor shall any person dealing with the Commissioners be concerned to inquire as to the extent of their authority or the observance of any restrictions on the exercise of their powers".

Summary of the Act^[37]

• The Crown Estate is an estate in land only, apart from cash and gilts holdings necessary for the conduct of business.
• The Crown Estate Commissioners, who comprise the main board, are approved by the Monarch on the advice of the Prime Minister. They are limited to eight persons.
• The board of Commissioners have a duty to:
  • maintain and enhance the capital value of the estate and its revenue income; but at the same time –
  • take into account the need to observe a high standard of estate management practice.
• When selling or letting its property the Crown Estate should always seek to achieve the best consideration (i.e. price) which can reasonably be obtained in all the circumstances, but discounting any monopoly value (mainly from ownership of the foreshore and seabed).
• The Crown Estate cannot grant leases for a term of longer than 150 years.
• The Crown Estate cannot grant land options for more than ten years unless the property is re-valued when the option is exercised.
• The Crown Estate cannot borrow money.
• Donations can be made for religious or educational purposes connected with the estate or for tenants’ welfare. Otherwise, charitable donations are forbidden.
• The character of the Windsor estate (Park and Forest) must be preserved; no part of the estate may be sold.
• A report should be submitted to the Queen and to Parliament annually, showing the performance of the estate over the previous year.
• The Crown Estate should observe professional accounting practices and distinguish in its accounts between capital and revenue.
• Money received as a premium from a tenant on the granting of a new lease should be allocated between capital and revenue as follows:
  • where the lease is for a term of thirty years or less it must be treated as revenue;
  • for leases of more than thirty years it must be treated as capital.

In 2010 a UK Parliament Treasury Committee report on the Crown Estate, the first for twenty years, reported that

• it is “alarmed” that the Crown Estate in 2007 started investing in joint ventures such as the Gibraltar Limited Partnership, which it says is in “grave” financial difficulties. The Crown Estate owns 50% of the partnership, which owns the Fort Kinnaird retail park near Edinburgh;
• the Crown Estate has a monopoly over the marine environment, and has focused too strongly on collecting revenues rather than acting in the long-term public interest around ports and harbours;
• the quality of residential property management in the urban estate falls short. Consultation processes have lacked transparency, and the Committee was “particularly concerned” that the Crown Estate had failed to consult local bodies which had rights to nominate key workers;
• some non-commercial historic properties should be reviewed with a view to transferring management to conservation bodies such as English Heritage;
• Ministers should take a greater interest in the Crown Estate, because its overall management struggles to balance revenue generating with acting in the wider public interest.

Crown Estate chief executive Roger Bright said: “We welcome the Committee’s recognition that we run a successful business operation.”^[38]

Holdings

Urban portfolio

This includes the entirety of Regent Street and around half of St James's in London's West End as well as retail property across the UK in locations including Oxford, Exeter, Nottingham, Newcastle, Harlow and Swansea.^[39]

In 2002 The Crown Estate began implementing a £1 billion investment programme to improve Regent Street's commercial, retail and visitor facilities and public realm. In addition, they are investing £500 million in St James's, including a number of major redevelopments.

Rural portfolio

Holdings consist of around 144,000 hectares (356,000 acres) of agricultural land and forests, together with minerals and residential and commercial property.^[40]

Windsor Estate

The Windsor Estate covers approximately 6,300 hectares and includes Windsor Great Park, the Home Park of Windsor Castle, extensive forests, residential and commercial properties, golf courses, a racecourse and let farms.

Marine holdings

The Crown Estate's marine holdings consist of:

The Crown Estate plays a major role in the development of the offshore wind energy industry in the UK. Other commercial activity managed by the Crown Estate on the seabed includes wave and tidal energy, carbon capture and storage, aggregates, submarine cables and pipelines and the mining of potash. In terms of the foreshore, The Crown Estate issue licences or leases for around 850 aquaculture sites and owns marina space for approximately 18,000 moorings.

Other rights and interests

Other rights and interests include:

Finances

In the 2015/2016 fiscal year, the Crown Estate's property evaluation was £12 billion with a £304.1 million net revenue profit (up 6.7%).^[46]

Governance

Historical

Previous officials responsible for managing what is now the Crown Estate were:^[47]

• Surveyor General of Woods, Forests, Parks, and Chases and Surveyor General of the Land Revenues of the Crown, 17th century to 1810
• Commissioners of Woods, Forests and Land Revenues, 1810–1831
• Commissioners of Woods, Forests, Land Revenues, Works and Buildings, 1832–1850
• Commissioners of Woods, Forests and Land Revenues, 1851–1924
• Commissioners of Crown Lands, 1924–1954

Chairmen and chief executives of the Crown Estate Commissioners

Chairmen (First Commissioner)

• 1955–62 – Sir Malcolm Trustram Eve (later Lord Silsoe) (1894–1976)
• 1962–77 – The Earl of Perth (1907–2002)
• 1977–80 – Lord Thomson of Monifieth (1921–2008)
• 1980–85 – The Earl of Crawford and Balcarres (born 1927)
• 1985–95 – The Earl of Mansfield and Mansfield (1930–2015)
• 1995–2002 – Sir Denys Hartley Henderson (born 1932)
• 2002–2009 – Sir Ian David Grant (born 1943)
• 2010–2016 - Sir Stuart Hampson (born 1947)
• 2016- Robin Budenberg (born 1959)

Chief executives (Second Commissioner)

• 1955–60 – Sir Ronald Montague Joseph Harris (1913–1995)
• 1960–68 – Sir Jack Alexander Sutherland-Harris (1908–1986)
• 1968–78 – Sir William Alan Wood (1916–2010)
• 1978–83 – Sir John Michael Moore (born 1921)
• 1983–89 – Dr Keith Dexter (1928–1989)
• 1989-2001– Sir Christopher Howes (born 1942)
• 2001–2011 Roger Martin Francis Bright (born 1951)
• 2012– Alison Nimmo (born 1964)

The chairman (formally titled "first commissioner") is part-time. The chief executive (the "second commissioner") is the only full-time executive member of the Crown Estate's board.^[48]

See also

• Crown Estate Paving Commission
• Duchy of Lancaster
• Duchy of Cornwall
• Prince's Coverts – Area of managed woodland in Oxshott, Surrey
• Regent Street
• Windsor Great Park
• Balmoral Castle
• Sandringham House

Notes

References

• Annual Reports of Commissioners of Woods and Forests 1811, 1853 and 1855
• Best, G. Percival (writing as "G. Percival"), "The Civil List and the Hereditary Revenues of the Crown", The Fortnightly Review, London, March 1901
• Commissioners of Enquiry into the Woods, Forests and Land Revenues of the Crown, Twelfth Report, London, 1792
• Crown Estate, The, Annual report and accounts 2009, accessed July 2009
• Pugh, R B., The Crown Estate – an Historical Essay, London, The Crown Estate, 1960

External links

• Official website
  • Crown Estate annual report of assets
• Text of the Crown Estate Act 1961 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk

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