CRT funding deal ‘the best way forward’
The CRT funding package is now thought to be the best way forward for the UK’s inland waterways network
INLAND WATERWAYS: British Waterways directors Robin Evans, Simon Salem and Jim Stirling, with Canal & River Trust trustee John Dodwell, have given more details of the CRT funding deal, writes Harry Arnold.
At a briefing on 2 February it was announced the contract with the government, via Defra, has an initial time span of 15 years – from April 2012 to April 2027 - and it can’t be rescinded on the whim of a future minister or official, only by a full Act of Parliament.
In 2021/2022 there will be a government agreed review – “To examine the ongoing public benefit case for government funding beyond 2026/27.”
There is a core grant of £39m a year from 2015/16 index linked to inflation based on a forecast figure determined by the Office of Budget Responsibility, which is issued every three years.
There will also be a conditional grant of £10m per year for seven years, April 2015 to April 2022 reducing gradually to £4m by 2027, over the last five years of the grant agreement. From April 2022 the £10m reduces by the same amount as the core grant increases with inflation; in effect being flat cash from 2022.
The conditional grant is tied to three performance measures - satisfactory condition of principal assets (tunnels, aqueducts, embankments, etc.), satisfactory condition of towpaths and satisfactory flood risk management measures.
Each of these will be measured by a network stewardship score performance system based on BW’s current Asset Management programme which is peer reviewed and Defra is happy with.
Within this Defra will also ensure the CRT trustees spend monies wisely on such things as the waterway track and infrastructure, not on what might be called ‘frivolities’ (fast cars were quoted as an example!).
Civil servants are required to show ‘value for money’ to government and the latter also worries about this. One of the things they required to be enshrined in the conditional grant is public access to towpaths.
BW pension fund
The BW pension fund deficit – similar to other company funds – has been a stumbling block in negotiations. To solve this the government will make a one-off reduction grant of £25m, spread across the next few months, and a ‘last resort’ guarantee of £125m for 19 years.
The CRT will create a pension fund partnership with the BW pension fund and place £125m of assets in to this partnership. The assets will come from BW’s £460m commercial portfolio already transferred to the CRT, ensuring that the trust will be able to cover any pension liabilities, which the pension fund trustees have agreed to.
BW also borrowed £6m from the government in the 1970s to fund improvements to the commercial waterways in the North East - a loan that would become repayable by the CRT in the next two to three years. The government has agreed to write this loan off.
Within the agreement the CRT has agreed to publish annual statistics (in effect similar to BW’s annual report) covering the network stewardship score, strategies for each waterway partnership, condition of SSSIs, data on heritage sites, housing forecast figures (this is to do with houses built on property sites), volunteer numbers, safety performance and towpath use and condition.
The government has agreed measures on certain national policy provisions which might impact on the CRT, such as abstraction under the Water Framework Directive, dredging obligations under the 1968 Transport Act, which particularly affects remainder waterways, and reduction of weight restrictions on bridges.
The CRT has agreed to publish a policy on access for pedestrians and other towpath users such as cyclists, and also to have financial and performance reviews with Defra three times a year.
Environment Agency
One of the major questions was that regarding bringing the Environment Agency (EA) waterways into the CRT. It has been agreed that the government will review whether this can happen in 2014/15. This cannot be changed without the CRT’s agreement.
EA navigations can only be transferred with the CRT’s agreement, and it will require the CRT trustees to be confident EA navigations are properly funded. We were told that currently both the present CRT trustees and the Waterway Minister Richard Benyon are keen that EA navigations should be included in the CRT.
Subject to satisfactory conclusion of outstanding issues, the government plans to lay the transfer order in parliament during February and - subject to parliament’s scrutiny and approval – it is now planned that the new charity will be launched in June, instead of April.
It is obvious there have been some hard negotiation between the officers of BW and Defra to achieve this funding agreement which has received both the agreement of the CRT trustees and government ministers. Trustee John Dodwell said the funding agreement was good enough to make the CRT viable.
Both the Inland Waterways Association (IWA) and – for the industry – the British Marine Federation (BMF) have issued statements welcoming the agreement. There are bound to be many questions of detail to be asked and answered and problems to be solved, but I came away from the briefing now very confident that this is the best way forward for the future administration of the waterway network in England and Wales.
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