Scapa Flow Historic Marine Protected Area - designation proposal: final business and regulatory impact assessment – 18 July 2025

Section 3: Costs, impacts and benefits

Industry costs

Option 1 – The ‘do nothing’ option

There are no additional costs associated with this option. The key stakeholders with direct socio-economic interests are the dive charter operators and the owners of the wrecks.

As far as the dive charter operators and others who wish to dive on the wrecks are concerned, scheduling does not affect existing rights of access or navigation in Scapa Flow, as managed by Orkney Marine Services. Scheduled monument consent (SMC) from HES is required for works to scheduled monuments. SMC has previously been required for activities such as scientific sampling of the wrecks, recovery of artefacts, and buoyage. This would continue. However, as HES does not charge for administration of SMC, it imposes few, if any costs on this industry.

At both HES’ and Scottish Government consultations, and via the Scottish Government’s 2024 engagement, the agent of the owner of four German wrecks claimed that the status of these wrecks as scheduled monuments is preventing the owner from realising the scrap value of these wrecks or generating a return by sale of the wrecks for this purpose. ^[6] The effect of scheduling is to require that salvage on these wrecks, which falls within the definition of ‘works’ to a scheduled monument’, cannot proceed without SMC from HES. Each application for SMC is considered by HES on its own merits against the HES Policy for Scheduled Monument Consent for which the overall policy aim is that, ‘works on scheduled monuments should normally constitute the minimum level of intervention that is consistent with conserving what is culturally significant in a monument.’ If an application for SMC is refused, the applicant can appeal under section 4B of the 1979 Act. Sections 7-9 of the 1979 Act provide compensation powers where a person who has an interest in a monument incurs expenditure or otherwise sustains any loss or damage in consequence of the refusal of their SMC application. The circumstances under which compensation is payable are limited. No application for SMC in respect of salvage has been received by Historic Scotland or HES, since the decision to schedule the wrecks in 2001. The owner’s agent also expressed concern regarding potential implications of the present scheduled monument status regarding the liabilities of an owner. This is a matter on which the owner should seek their own legal advice. However, HES considers that scheduling under the 1979 Act neither imposes additional requirements on the owner or other parties to ensure a safe environment and protection of persons’ accessing the wrecks, nor does it have additional implications for the owner’s liabilities.

The requirement to obtain both scheduled monument consent and a marine license for certain activities involves some duplication of consenting regimes, involving some additional administrative costs for businesses and the public sector. This is one of the main reasons for moving towards the marine protected area regime.

Continued costs to the public sector should be anticipated. Since 2001, Historic Scotland/HES worked with a wide range of partners, investing £208k on the investigation, management, promotion and enforcement of wartime underwater heritage in Scapa Flow, with a particular focus on the wrecks of the German High Seas Fleet. This includes site monitoring costs for which we currently have no estimate.

As designation of Historic MPAs is a discretionary power, there is no risk of penalties being imposed on the Scottish Government if it decides not to designate the Scapa Flow Historic MPA. There may however, be some economic and societal costs in terms of the continued degradation of the underwater heritage resource. Any such costs are however, very difficult to quantify.

Option 2 – Designate the site as a Historic MPA (preferred option)

Costs have been evaluated based on the predicted management measures. Where feasible, costs have been quantified; where this has not been possible costs are stated qualitatively.

If the scheduling remains in place for a transitional period of up to 1 year, there will be some potential duplication of consenting (as is the case now – whereby works within the scheduled areas may require both scheduled monument consent and marine licenses). Experience to date indicates that this burden is likely to fall primarily on the diving sector/academic community in relation to activities targeted at the wrecks (e.g. sampling or recovery of artefacts). The costs would also apply in respect of works involving salvage. The costs of these options have therefore been considered under these headings.

Aquaculture (finfish and shellfish)

There are no current finfish or shellfish aquaculture farms within the boundaries of the proposed Historic MPA. Operational installations within 500m of the boundary are finfish aquaculture installations at Toyness, Orphir, close to the wreck of the Bremse, at Pegal (close to the west coast of Rysa Little), and South Cava. It is understood that a seabed lease from the Crown Estate, now Crown Estate Scotland, was held to harvest mussels from the Clestrain Hurdles, but discussions with the Orkney Fisheries Association indicate that no harvesting has taken place in recent years and the lease may have lapsed.

Potential economic costs of designating the Scapa Flow Historic MPA to the aquaculture sector

Assumption for cost impacts

• No other known aquaculture developments are being planned within the areas proposed for designation.
• Proposed boundary areas should be avoidable through development planning.
• Any proposals to develop new aquaculture installations or to extend existing facilities within the proposed boundary (for example, around the German High Seas Fleet anchorage) would be expected to undertake seabed surveys to map marine historic assets and to demonstrate that impacts can be avoided.

Description of one-off costs

• Cost of seabed surveys for applications for new installations within the proposed boundaries/to extend existing facilities into the proposed protected area (an estimate of £5k - £15k per application).

Description of recurring costs

• N/A

Non-quantified costs

• Cost of uncertainty and delays in planning applications.

Total quantified costs (2024-2039)

• The number or likelihood of such applications is not clear at the time of writing, so it is not possible to quantify costs over a 15-year time horizon.

Coastal defence and flood protection

The blockships at Churchill Barrier 2 are located within an area where coast protection works were undertaken in 2015-17 to install a caisson (marine license 05667/15/0) in order to address ‘over-topping’ of the barrier by seas during easterly storms that have prevented safe vehicle transport on the road over the barrier.

Economic costs of designating the Scapa Flow Historic MPA to the coastal defence and flood protection sectors

Assumption for cost impacts

• Existing permissions at Barrier 2 would remain unaffected by the designation. HES understands that it is likely that the existing caisson will need to be removed/replaced as it is temporary.
• No other coast protection/flood defence works are being planned within the areas proposed for designation but given the location of the boundaries, the Churchill Barriers are the most likely location where such works may be required in the future.
• As the Churchill Barriers themselves are not included within the designation, no changes should be required in terms of the Local Authorities ongoing maintenance of the roads that cross the barriers.
• Proposals for coast protection works within the proposed boundaries would be expected to undertake seabed surveys to map marine historic assets and to demonstrate that impacts can be avoided/minimised by careful design/location of defences.

Description of one-off costs

• Cost of seabed surveys for coast defence works within the proposed boundaries/to extend existing infrastructure into the proposed protected area (an estimate of £5k - £15k per application).

Description of recurring costs

• N/A

Non-quantified costs

• Cost of uncertainty and delays in licensing/planning applications.

Total quantified costs (2024-2039)

• The number or likelihood of such applications is not clear at the time of writing, so it is not possible to quantify costs over a 15-year time horizon.

Mineral extraction

Sand that is accreting on the east side of Churchill Barrier 4 (across Water Sound) – the Ayre of Cayra - is the subject of extraction works granted by the local authority (see 18/289/PP issued 4/10/2018) with a condition that no excavation or any other operations should take place within 25 metres of blockships buried in the dune system.

Economic costs of designating the Scapa Flow Historic MPA to the mineral extraction sector

Assumption for cost impacts

• Existing permissions at Barrier 4 would remain unaffected by the designation as the operational advice reflects existing planning conditions.
• The areas proposed for designation are otherwise not currently subject to any maintenance dredging, and there are no known live development proposals for capital dredging.
• Proposed boundary areas are mostly small and should be avoidable through development planning.
• Any proposals to develop new areas for mineral extraction/dredging within the proposed boundary would be expected to undertake seabed surveys to map marine historic assets and to demonstrate that impacts can be avoided.

Description of one-off costs

• Cost of seabed surveys for applications for new areas of mineral extraction/dredging within the proposed boundaries/to extend existing works into the proposed protected area (an estimate of £5k - £15k per application).

Description of recurring costs

• N/A

Non-quantified costs

• Cost of uncertainty and delays in licensing/planning applications.

Total quantified costs (2024-2039)

• The number or likelihood of such applications is not clear at the time of writing, so it is not possible to quantify costs over a 15-year time horizon.

Commercial fisheries

Discussions with Orkney Fisheries Association indicate that Scapa Flow is used by around 10-12 commercial vessels, and is particularly important as a fishery during winter or bad weather. Within the proposed area, scallop diving takes place and static gear (e.g. creels and buckie pots) is in use around the wrecks, particularly close inshore around Cava. There is little use of mobile gear around the German wrecks for fear of snagging and damage to fishing gear. The exception is a localised trawl fishery for queenie scallops by around four vessels, working between the German wrecks at the north end of the island of Cava but avoiding the wrecks themselves. Outside the proposed area, there is further trawling for nephrops in the deeper anchorage to the east of the High Seas Fleet, and there is also some close to the Strathgarry, though avoiding the wreck. There is a brown crab fishery on the south side of Scapa Flow.

Economic costs of designating the Scapa Flow Historic MPA to the commercial fisheries sector

Assumption for cost impacts

• No change to existing practices as regards scallop diving and use of static gear – hence no cost impacts on Gross Value Added (GVA) are envisaged either in terms of loss of value of catches, or displacement impacts.
• Operational advice is for mobile gear vessel owners to take steps to avoid damage to marine historic assets (and risk of damage to gear) by avoiding wrecks, structures, and areas of foul ground within the MPA. As little activity of this sort takes place and fishermen normally try to avoid such seabed hazards (for risk of losing gear), this operational advice is thought unlikely to result in cost impacts.
• HES will work with the Orkney Fisheries Association and Orkney Sustainable Fisheries Ltd with a view to sharing survey data and vessel tracks so that the queenie fishery around the wrecks at the north end of Cava can continue without risk of any damage or disturbance to marine historic assets, thereby also avoiding loss of income.

Description of one-off costs

• N/A

Description of recurring costs

• N/A

Non-quantified costs

• N/A

Total quantified costs (2024-2039)

• N/A

Energy generation and energy/communications transmission

There is no current generation activity in the areas proposed for designation. However, Scapa Flow is generally seen as being a place of high potential for marine renewables (both storage of infrastructure and generation). The only places within the boundary of the proposed Historic MPA where energy generation/storage is understood to have been considered are where there are blockship remains adjacent to Churchill Barriers 1 & 2. Consultants have previously estimated that with tidal energy turbines installed at Barrier No.1 it would be possible to generate an estimated 16.7MW when the tide is running at full flow, whilst 8.6MW could be generated at Barrier No.2.^[7] At the time of this assessment, there are no live development proposals.

The only charted cabling that runs through the area (either power or communications) may be up to 5 cables which run into the sea from the north east coast of Flotta (see Oceanwise charting data). These appear to terminate offshore and are likely to be redundant wartime cables.

Networks are considering upgrading of the electricity transmission connections between Caithness and the Orkney Island, and the grid connection infrastructure on Orkney. Pre-application discussions with HES indicate a preferred route for the interconnector from Dounreay to Billia Croo, Warbeath (this would avoid any of the proposed areas for designation). There is potential for the route options for the terrestrial infrastructure upgrade to pass through the proposed areas for designation, or close to them around Churchill Barrier 4, and across Hoy Sound (where the wrecks of S54, UB121 and HMS Strathgarry are located; an alternative proposal crosses between Clestrain and Quoyness on Hoy, close to the site of the Clestrain Hurdles. At consultation, a respondent indicated that there are local discussions regarding a route option across Scapa Flow from Orphir to Flotta.

Economic costs of designating the Scapa Flow Historic MPA to the energy generations and energy or communications transmission sectors

Assumption for cost impacts

• The areas proposed for designation are not currently subject to any live development proposals for energy generation/transmission.
• Proposed boundary areas should be largely avoidable through development planning.
• Energy generation/transmission proposals within the proposed protected areas would be expected to undertake seabed surveys to map marine historic assets and to demonstrate that impacts can be avoided/minimised.
• The Churchill Barriers themselves are not included in the MPA. If energy generation proposals are taken forward at these locations, developers would be required to undertake seabed surveys to record marine historic assets, and to consider, through the EIA process, impacts to the blockships, with a view to demonstrating how these impacts could be avoided/minimised. In response to the consultation undertaken by HES in 2019, a respondent suggested that renewable energy installation at these locations would be likely to involve removal of the blockships. If this were to be the case, cost impacts associated with mitigation should be anticipated.

Description of one-off costs

• Cost of seabed surveys for applications for new developments within the proposed boundaries/to extend existing infrastructure into the proposed protected area (an estimate of £5k - £15k per application).

Description of recurring costs

• N/A

Non-quantified costs

• Cost of uncertainty and delays in the necessary licensing/EIA consideration processes;
• Potential costs of a detailed archaeological investigation as required under section 83 (7) of the 2010 Act in circumstances where an applicant satisfies the licensing authority that the benefits of the proposed development outweigh the risk of damage to the marine historic asset that will be created by proceeding with it.

Total quantified costs (2024-2039)

• The number or likelihood of such applications is not clear at the time of writing, so it is not possible to quantify costs over a 15-year time horizon.

Oil and gas

The oil and gas installation of Flotta Oil Terminal is located on the island of Flotta in Scapa Flow. None of the proposed designated areas are located within the charted prohibited entry area around Flotta terminal (the closest marine historic assets proposed for designation are around 300m away). Crude oil is imported to the Flotta Oil Terminal from several offshore installations in the North Sea through a subsea pipeline which passes through Water Sound – approximately 700m - 1km south west and southeast of the proposed designation of blockships at Churchill Barrier 4. The pipeline crosses Hoxa Sound and passes approximately 200m to the north of UB-116 before making landfall at Flotta.

Economic costs of designating the Scapa Flow Historic MPA to the oil and gas sectors

Assumption for cost impacts

• The areas proposed for designation do not currently overlap with any oil and gas interests.
• Proposed boundary areas are mostly small and should be avoidable through development planning.
• There are no currently known proposals for new developments that might interact with the area. Cost estimates are provided for one-off costs should such applications be required in the future.

Description of one-off costs

• Cost of seabed surveys for applications for new development within the proposed boundaries/to extend existing infrastructure into the proposed protected areas (an estimate of £5k - £15k per application).

Description of recurring costs

• N/A

Non-quantified costs

• Cost of uncertainty and delays in planning applications.

Total quantified costs (2024-2039)

• The number or likelihood of such applications is not clear at the time of writing, so it is not possible to quantify costs over a 15-year time horizon.

Marine traffic

The boundary of the proposed MPA lies within the area of responsibility of Orkney Marine Services as statutory harbour authority. Scapa Flow is northern Europe’s preferred location for Ship to Ship transfer operations of crude oil, gas and other products, long term storage and lay up of tankers and accommodation rigs. Orkney Marine Services considers it imperative to maintain unrestricted access to Scapa Flow for future operations. Ballast-water controls aim to minimize risk of pollution and introduction of alien/non-native species.

None of the areas proposed for designation lie within ship anchorage priority zones. However, some of the proposed areas for designation lie within shipping channels: the wreck of HMS Strathgarry lies in the centre of Hoxa Sound, within the main shipping channel into Scapa Flow from the south, while the anchorage area for the German High Seas Fleet lies on the ferry route from Lyness to Houton.

Cava sector light is operated by Northern Lighthouse Board on the north coast of Cava.

Economic costs of designating the Scapa Flow Historic MPA to the marine traffic sector

Assumption for cost impacts

No cost impacts are envisaged on this sector:

• Although some marine historic assets (e.g. wreck of Strathgarry) are located within shipping channels, designation does not affect surface navigation.
• Priority areas for shipping anchorage/ship-to-shore are not located with the area proposed for designation.

The designation should not affect routine maintenance of the lighthouse on Cava providing that vessels do not intend to anchor into the wrecks.

Description of one-off costs

• N/A

Description of recurring costs

• N/A

Non-quantified costs

• N/A

Total quantified costs (2024-2039)

• N/A

Recreational boating

Yachting is also popular in Orkney waters. The only areas proposed for designation that are advertised as providing anchorage opportunities for yachts in Cruising the Islands of Orkney (2016) are Kirk Sound, East Weddell Sound at the east of Scapa Flow, although it seems likely that any yachts anchoring in these bays would be likely to want to avoid the blockships^[8]. Sea angling is understood to take place in the vicinity of the wrecks.

Economic costs of designating the Scapa Flow Historic MPA to the recreational boating sector

Assumption for cost impacts

No cost impacts are envisaged on this sector:

• The areas proposed for designation lie generally outside charted anchorage areas.
• No changes required to surface navigation or sea angling practices.

Description of one-off costs

• N/A

Description of recurring costs

• N/A

Non-quantified costs

• N/A

Total quantified costs (2024-2039)

• N/A

Dive industry

Around 6 dive charter vessels operate from Stromness, taking recreational diving trips to visit the wrecks of Scapa Flow (around 3000 visiting divers every year). A recreational diving school regularly uses the wrecks at the Churchill Barriers for shore diving (particularly barriers 2&3). A small number of other diving vessels visit Scapa Flow on occasion. The only site proposed for inclusion in the Historic MPA where access is currently restricted by Orkney Marine Services is the site of SS Prudentia, as a consequence of the proximity of the wreck to the Flotta Oil terminal.

Economic costs of designating the Scapa Flow Historic MPA to the diving sector

Assumption for cost impacts

• Designation would not alter existing ability to dive on the wrecks and doesn’t change existing permit requirements (through Orkney Marine Services) – hence no additional costs are envisaged for this sector for diving on the wrecks.
• The only potential costs fall in relation to activities targeted at the wrecks (for example where permission is required to carry out sampling or to recover artefacts).
• If the scheduling designation of the seven wrecks of the German High Seas Fleet is removed when the MPA comes into force, scheduled monument consent would no longer be required for works on these wrecks. Permissions would be dealt with primarily through marine licensing, and direct authorisation from HES (for example, recovery of artefacts where these activities fall below the threshold for marine licensing).
• If the scheduling designation remains, SMC would be required for works to the seven wrecks, but not elsewhere within the MPA. Although scheduled monument consent for works on these wrecks would satisfy authorisation requirements under the Historic MPA regime, other types of license (e.g. marine license) may also be required – hence there is some duplication of consenting, and additional burden involved.

Description of one-off costs

• HES does not charge for SMC applications, if the scheduling designation stays in place. The administrative costs to applicants are likely to be small.

Description of recurring costs

• N/A

Non-quantified costs

• Uncertainty in delay during applications, whether for scheduled monument consent, or other types of application (e.g. marine licenses).

Total quantified costs (2024-2039)

• The number or likelihood of such applications is not clear at the time of writing, so it is not possible to quantify costs over a 15-year time horizon.

Salvage

The last commercial-scale salvage of wrecks is understood to have taken place in Scapa Flow around 1979 and HES is not aware of any current proposals to carry out salvage work. However, the agent of the owner of four German wrecks has claimed that their existing status as scheduled monuments is impacting on the owner’s salvage interests by restricting opportunities for salvage or sale of the wrecks for this purpose, interests that the agent claims would be further affected by designating a Historic MPA in Scapa Flow. The following section therefore considers potential economic consequences in relation to salvage.

Economic costs of designating the Scapa Flow Historic MPA to salvage

Assumption for cost impacts

• The owner’s agent claims that adverse economic consequences would arise from the designation of the Historic MPA as it means that the owner would be unable to generate an economic return through a) salvage of his assets if this were prevented or significantly curtailed through consent procedures, and/or b) through sale of the wrecks for the purpose of salvage, which in turn might impact on asset values. The owner’s agent has termed this as ‘loss of opportunity’. The agent has also indicated that the owner is concerned that designation might potentially introduce additional responsibilities on the owner for public safety. As far as any salvage implications for the owner are concerned, these should be considered on two categories of asset in his ownership:
  • the wrecks Konig, Karlsruhe, Markgraf, Kronprinz Wilhelm – which are already scheduled monuments. The view of HES is that the Historic MPA would be delivering effectively the same level of protection on these sites as is currently the case given their status since 2001 as scheduled monuments. It follows that there would not be an additional impact to that already perceived by the owner’s agent to be the case through scheduling; and
  • the currently undesignated site of Bayern turrets - including this site in a Historic MPA extends statutory protection for the first time.
• Potential costs on the owner to comply with regulatory requirements: before undertaking salvage within a Historic MPA, an owner would be required to obtain a marine license under Part 4 of the 2010 Act (NB - this would be required whether or not the Historic MPA is designated), permits from the statutory Harbour Authority, and for salvage on wrecks that are scheduled monuments, Scheduled Monument Consent. Section 83 of the 2010 Act introduces certain requirements for public authorities responsible for authorising activities that are capable of affecting marine historic assets within a Historic MPA, as would be the case with salvage of the wrecks. This includes under Section 83(7), a power to require an archaeological investigation.
• Potential costs on the public sector through administration of licensing, any appeal processes in the event of a refusal to issue consents/licenses, and if/while the scheduling remains in place, the possibility of a successful claim for compensation made under sections 7-9 of the 1979 Act.

Description of one-off costs

• The cost of applying for a marine license is set out in https://www.gov.scot/publications/marine-licence-application-fees/ and varies depending on the scale of work. As an example, the fee in 2024-25 for a project of £50k-£2 million in value is £2,880. Such costs would fall for salvage works, regardless of whether a designation is taken forward.
• HES does not charge for Scheduled Monument Consent applications.

Description of recurring costs

• N/A

Non-quantified costs

• The owner has never submitted any applications to Historic Scotland/HES for salvage since the wrecks became scheduled monuments in 2001. It is not possible to estimate the number or likelihood of SMC/marine license applications for salvage in the future.
• Uncertain outcome and potential delays for the owner in the event that an application is submitted, whether for SMC or other types of application (e.g. marine licenses), and uncertain costs of appeal procedures in the event that an application for SMC/marine license is refused.
• For as long as the scheduling remains in place, uncertain costs falling on the public sector in the event of a successful claim for compensation under section 7-9 of the 1979 Act.
• Uncertain costs of an archaeological investigation under section 83 (7) of the 2010 Act.

Total quantified costs (2024-2039)

• The agent of the owner has claimed the following costs relating to ‘loss of opportunity’:

a) continuing impacts by preventing the owner from realising the scrap value of what remains of the four scheduled wrecks estimated at £10 million in 2019 prices and estimated by the agent of the owner in 2024 as £17 million, and through recovery and sale of circa £500k of collectable items within the wrecks (see explanation of these costs in earlier footnote ⁶), or through sale of the wrecks for these purposes

b) additional ‘loss of opportunity’ of the Bayern turrets amounting to circa £180k. This figure is based on a scrap value of approx. £765k less an estimate of costs for breaking-up and recovery.

Updating the above 2019 prices to 2025 prices using GDP deflators^[9] yields a scrap value of £12.7 million, £635,000 in collectible items, and a £229,000 ‘loss of opportunity’ of the Bayern turrets.

Public sector costs

The decision to designate the Scapa Flow Historic MPA would result in costs being incurred by the public sector. These costs include preparation of management plan and/or supplementary guidance, which HES have estimated at £24,500 in 2011/2012 prices (£35,000 in 2025 prices), promotion of public understanding and other support (e.g. research and conservation) at £15,000 in 2019 prices (£19,000 in 2025 prices) and regulatory and advisory costs at £15,000 (£19,000 in 2025 prices). Please note that costs to prepare a management plan and/or supplementary guidance would be incurred only once, whilst the other costs would likely be incurred on an ongoing basis.

It's likely that other costs are incurred by the public sector, such as costs to perform site monitoring as well as compliance and enforcement. However, due to a lack of reliable data, these costs have not been estimated.

Some of these costs will fall at the national level (for example to HES or the Scottish Government); some (e.g. issuing dive permits) are existing costs at the local level which will need to take account of the Scapa Flow Historic MPA.

The sparsity of historic cost data associated specifically with Historic MPAs means that these costs are based on a variety of internal estimates at SG or HES, some of which were applicable to other types of MPAs and/or the wider MPA network. As such, they should be treated with a degree of caution.

Net present costs

Due to the lack of reliable data regarding the potential costs and the uncertainty regarding the frequency in which they would be incurred, the net present costs have not been calculated.

Other impacts

No other impacts have been identified for the proposal within this BRIA.

Scottish firms’ international competitiveness

The proposal discussed within this BRIA will not impact Scottish businesses ability to compete internationally. The HES consultation exercise sought views from any businesses potentially affected, including some small and micro-size firms, and larger companies. No respondents indicated that they anticipated impacts on their interests.

Benefits

Option 1 – The ‘do nothing’ option

There are no additional benefits as the existing position remains the same.

Option 2 – Designate the site as a Historic MPA (preferred option)

This option appropriately recognises the importance of the surviving underwater heritage in Scapa Flow as revealed through surveys over the last 20 years, which are a testament to the key strategic importance of the naval harbour during both the First and Second World Wars. It is one of the most important wartime marine historic sites in the UK if not in Northern Europe.

The designation also contributes to the Scottish Government’s work to create a network of MPAs in the seas around Scotland and aligns the protection of Scapa Flow’s marine heritage with the system used to protect Scotland’s other nationally important marine historic assets. Screening and appraisal of options has concluded that designation of the Scapa Flow Historic MPA represents the most desirable and viable/feasible option for managing Scapa Flow’s wartime underwater heritage within the scope of the laws and policies available, with the potential to balance effective protection for Scapa Flow’s wartime underwater heritage with the sustainable economic growth of Orkney; and to provide opportunities for beneficial management of the heritage in the context of the wrecks’ deteriorating condition.

Although the Historic MPA is intended to replace the existing scheduling of seven wrecks of the German High Seas Fleet, and should provide an equivalent degree of protection, HES consulted on two options a) the scheduling would be removed when the Historic MPA comes into force thereby minimising duplication of consenting; or b) the scheduling would remain in place for a transition period of 1 year. Some respondents to the consultation observed that retaining scheduled monument status for the seven wrecks for a transitional period would be helpful to give stakeholders time to get used to how the new designation works.

Scapa Flow’s marine heritage was viewed as very important/important by >90% of the c.450 respondents to HES’ online survey. The number of responses from the recreational diving sector highlighted the high level of use values that the wrecks of Scapa Flow to this sector. Forbes (2007:5) estimated that some 3,000 divers visit Scapa Flow, conducting almost 30,000 dives a year, about 60% of which are on what’s left of the German High Seas Fleet. However, Staiano and Matthew 2017:15^[10] indicates that, more recently, the sector was not experiencing growth (by comparison with tourism generally on Orkney).

As designation of a Historic MPA would not alter existing access arrangements to the wrecks of Scapa Flow, and should help to conserve the underwater heritage, designation should help to support the existing dive tourism industry and its efforts to promote Scapa Flow as a dive tourism destination in the longer term (86% of 450 respondents to a survey by HES were supportive of the principle of ‘look but don’t touch’ access to the Scapa wrecks). To a significant extent, this relies on the survival of interesting marine historic assets to dive, with the draw of the underwater cultural heritage of Scapa Flow the principal attraction. While effective stewardship of this resource may actively enhance the tourism offer, potentially attracting additional diving visitors, if we do not look after these marine historic assets, the tourism offer will be diminished as a result. This will affect jobs directly associated with the industry (e.g. dive charter operators), but also those benefiting indirectly (e.g. accommodation and food/drink providers).

Non-use values of the marine cultural heritage are the benefits people get simply from being aware of the richness of this heritage, even if they do not themselves use it. The story of Scapa Flow is told through museums in Stromness and Lyness, and is visible in its landscape and seascape. It is commemorated in literature, poetry, film, and in events that remember the loss of service personnel who served at Scapa Flow. It is expected that some degree of non-use value will be derived from designating the Scapa Flow Historic MPA, but it is difficult to monetise this.

Non-use values are commonly underestimated using traditional market valuation techniques. For example, a local community might assign importance to a certain asset that provides a distinctive characteristic to their local area. A natural capital approach attempts to account for this issue by using non-market valuation techniques – i.e. non-use values.

The UK Government’s Department for Culture, Media and Sport (then, the Department for Digital, Culture, Media and Sport) produced a rapid evidence assessment to gain a better understanding of valuation techniques and obtain reliable values across the arts, museums and heritage sectors^[11].

• One such study analyses visitors’ willingness to pay for various aspects when visiting the Roman archaeological site of Vindolanda, near Hadrian’s Wall. It was estimated that visitors would be willing to pay £14.60 per visit (£17.64 in 2025 prices) for continued excavation and research at the site – which can be broadly defined as a non-use value given the beneficiaries are not the visitors, but the discovery and existence of the cultural assets now and for future generations.
• Similarly, Danish citizens were willing to pay £8.96 more in annual income tax to ensure permanent protection of archaeological artefacts from Stone Age villages buried in the topsoil, or £12.17 to ‘reduce the destruction’ of these sites (£10.82 and £14.70 in 2025 prices, respectively). This is despite these Stone Age settlements not being visible or open to the public (similarly in many ways to the Scapa Flow for a large proportion of the Scottish public).

In 2023, there were 2.54 million households in Scotland^[12]. If each household in Scotland was willing to pay e.g. between £10.82 and £17.64 annually for the protection of Scapa Flow, it could be argued that this could accrue non-use benefits of between £27.5 million to £44.8 million annually. Due to the uncertainty of these estimates and their limited relevance to Scapa Flow, they are not used as estimates for non-use benefits.

Small business impacts

The wrecks are an important economic marine resource and many are very popular for recreational diving. It is expected that designation will help to promote the heritage value of the area, while also fostering understanding and enjoyment, and encouraging responsible behaviour by divers and others.

Investment

The proposal discussed within this BRIA does not impact Scotland’s potential for global investment.

Workforce and Fair Work

The proposal discussed within this BRIA does not directly affect inclusive recruitment/job satisfaction.

Climate change/Circular Economy

The proposal discussed within this BRIA does not impact on businesses ability to contribute to climate and circular economy targets.

Competition Assessment

Designation of the proposed Scapa Flow Historic MPA will not affect the ability or incentives of suppliers to compete, or impact on any factors considered by the Competition and Markets authority as appropriate for assessment.^[13]

Competition filter questions

Will the measure directly or indirectly limit the number or range of suppliers?

Not anticipated. It is unlikely that designation will directly limit the number or range of suppliers.

Will the measure limit the ability of suppliers to compete?

Not anticipated. Designation could affect the preparation of applications, location of marine developments and activities, or requirements for marine developments but this would apply to any developer of an affected activity, both new entrants to the market and existing suppliers.

Will the measure limit suppliers’ incentives to compete?

Not anticipated. Designation of the proposed site is not expected to limit suppliers’ incentives to compete.

Will the measure affect consumers’ ability to engage with the market and make choices that align with their preferences?

Not anticipated. For example, the designation does not place restrictions on access to charter boat diving operators and makes use of existing permit requirements (through Orkney Marine Services).

Will the measure affect suppliers’ ability and/or incentive to introduce new technologies, products or business models?

Not anticipated. Designation of the proposed site is not expected to affect suppliers’ ability and/or incentive to introduce new technologies, products or business models

Consumer Duty

The proposal discussed within this BRIA will not have any impact on consumers.