A Scottish Government agency has been criticised after handing £100,000 in Covid-19 bailout funds to a luxury golfing development on land owned by the Earl of Moray.
The fourth largest coronavirus grant handed out by Highlands and Islands Enterprise (HIE), to date, went to Castle Stuart Golf LLP, the firm that operates a prestigious golf course near Inverness on a 99-year lease from the Earl.
As well as owning that land, Companies House records show that the Earl, whose development company has £66.5m in assets, holds a direct financial stake in the operating company that received the grant.
In light of The Ferret’s investigation, critics suggested this use of public funds is at odds with a commitment from the Scottish Government to prioritise community wellbeing.
However, the operators of the resort said the grant helped the golfing firm to retain around 100 workers who are employed at the site.
Critics of the grant included Angus Hardie, director of the Scottish Community Alliance, who said public money spent on Covid-19 responses “should not be used to enrich private landowning interests”.
“I have long been struck by how the community and voluntary sector are so often characterised as being ‘addicted to grant’ and ‘subsidy junkies’, but when it comes to government support for private sector interests and landowners in particular, it’s all about ‘strategic investment’ and ‘tax incentives’,” he said.
Hardie argued that government investment should be treated as a form of public ownership. “In relation to Covid, what has essentially seen the nationalisation of large parts of the economy, shouldn’t be disregarded when or if the economy starts to pick up.
“If government has taken a stake in this golf resort that is how it should remain – an equity stake – until the owners buy the stake out,” he added.
Dr Craig Dalzell, head of policy and research at think tank Common Weal, said this kind of public investment was not fitting with the government’s ambitions to promote a wellbeing economy.
Dalzell said: “The Scottish Government should consider its bailout packages carefully, not just in light of what is happening to the economy now, but also with a view towards the kind of economy we want to build towards.
“When recessions happen they too often impact the poorest in society the hardest and yet they are also the least able to take advantage of bailouts and support. This is the opposite of what a government that champions inclusion and wellbeing should be seeking to achieve.”
Speaking to The Scotsman in June, general manager of Castle Stuart, Stuart McColm, said that despite facing a deficit, he fully expected the resort to “survive this year” thanks to “partners who are digging very deep into their pockets to keep it going” and ensure no redundancies would be made.
Scottish Green Highlands and Islands MSP John Finnie said the commitment to preventing redundancies was “to be welcomed, but there must be some transparency and conditionality around the use of public funds”.
Finnie added: “Emergency support grants during the pandemic were supposed to be about protecting the jobs and livelihoods of those most at risk from the economic shock of lockdown.
“I hardly think the multi-millionaire laird falls into that category, especially if, as his general manager suggested, he was ‘digging deep’ to cover the losses himself or other partners.”
Highlands and Islands Labour MSP Rhoda Grant said she would be writing to HIE to confirm all checks and balances were carried out for businesses which secured Covid-19 funding.
“I know from my postbag that many companies and individuals are receiving no help at all, many having to give up their businesses, so it is therefore imperative that those who receive help really need it as there is obviously not enough to go around,” Grant said.
She continued: “In some cases small businesses only needed a few thousand pounds to keep afloat, but fell between the cracks of government imposed criteria.”
Speaking to The Ferret, a partner in Castle Stuart Golf LLP and Castle Stuart Resort Ownership LLP called Grant Sword said the Earl’s estate had “a very small investor interest, less than 10 per cent, in the business itself”.
Golf brings significant benefits
Sword said the business was “hit extremely hard by restrictions placed by the UK and Scottish Governments”.
“Those lost revenues have had to be funded by the business save for support received from government support measures. We can be very clear that the bulk of the hit has had to be taken by the business itself,” he continued.
“The award of this funding not only protected many jobs, both direct and indirect, but also recognises the significant benefit Castle Stuart has brought to the local and regional economy in the last ten years.”
Sword added that Moray Estates had provided a 100 per cent rent free period during the pandemic. Moray Estates said it had nothing to add to Sword’s response.
An HIE spokesperson said the grant to Castle Stuart Golf LLP had been given “to support the business in its recovery from the impacts of the Covid-19 pandemic”.
The spokesperson continued: “Tourism is central to our regional economy and a vital source of employment. Castle Stuart is an important employer in the area, with 40 full time employees as well as a further 60 employees working part-time and on flexible contracts.
“The course was forced to close to the public during the crisis with the majority of staff furloughed and this funding ensures the business is able to continue to operate and retain its staff.”
A Scottish Government spokesperson said: “Throughout this unprecedented economic crisis we have listened to businesses and business organisations and acted quickly to offer support which now exceeds £2.3 billion.
“Alongside the support provided by the Scottish Government, Highlands and Islands Enterprise is working hard to help businesses recover from the impacts of Covid-19 and rebuild the region’s economy by using its budget flexibly to respond to local needs and circumstances.
“As HIE has made clear, it has acted to support the vital tourist sector and jobs.”
Castle Stuart Golf Course Title Deeds
Moray Estates Development Company Ltd Accounts
Castle Stuart Golf LLP Accounts
Cover photo credit: Valenta | CC | https://www.geograph.org.uk/photo/6510117