MPs have slammed the Crown Estate for lacking in transparency and managing its urban and marine estates too commercially.

In a scathing report published today, the House of Commons Treasury Committee says the Crown Estate has neglected its public service remit, having adopted an overly commercial approach to managing its £5bn portfolio.

Following the first inquiry into the Crown Estate in 20 years, the Committee says:

• 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 owns 50% of the partnership, which owns the Fort Kinnaird retail park near Glasgow (pictured);
• 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.

“The Committee has also made a number of recommendations relating to our role in respect of the wider public interest; we have always taken that aspect of our role very seriously and we will study carefully the Committee’s various recommendations in consultation with the Treasury.”

Further revelations from the report include news that the Exchequor Secretary to the Treasury, Sarah McCarthy-Fry, is to launch a review of the Crown Estate’s monopoly position in the marine environment.

In the last 10 years, The Crown Estate has generated over £1.8bn for the Consolidated Fund, a general fund that the government uses for public expenditure.

The report questions whether benchmarking itself against private sector property management is the best way to run the portfolio.

It recommends the Crown Estate works more closely with public sector partners in London and marine development to achieve socio-economic goals such as affordable housing or renewable energy.

Sub-committee chairman Michael Fallon said:

“Although they operate under the terms of 50 year old legislation, the Crown Estate  have more flexibility to accommodate wider public interests than either they or the Government appear to realise.

“Whilst we recognise the organisation’s core financial task is to maintain and enhance the value of the Crown Estate, we urge the them to take more account of the wider public interest in their activities, such as providing urban housing or developing the marine environment. And we urge the Government to step up to the mark and advise the Crown Estate on those wider public interests.”

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