Minister Announces Increased Funding for Canal & River Trust

Issue date: 1st February 2012

IWA has welcomed the announcement by the Waterways Minister Richard Benyon MP on Tuesday 31st January 2012, that his Department had reached a negotiated settlement with the transition trustees of the Canal & River Trust over the amount of Government funding that it will receive when it takes over responsibility for the management of the waterways currently run by British Waterways in England and Wales.

The issues that Government has addressed in this settlement are: – the original settlement has been substantially increased from £390million over ten years to potentially, £800m over 15 years according to Defra if you add indexation. There is also the full property portfolio of commercial premises and land worth an additional £460m.

The ‘core deal’ is for a payment of £39million per year, however; 

  • Starting in 2015/16, there is also an extra £10 million per year conditional grant (with a capping arrangement for the last 5 years).
  • There is now indexation on the core grant.
  • The contract term has now been increased by a third, giving financial certainty for 15 years.
  • On service pension liabilities -an additional £25m this year with a government guarantee of last resort (i.e. – should the charity become insolvent) for 19 years.
  • A one off payment of £6.2m this year to cover repayment of national loans.

The IWA campaign strategy has clearly been effective. This year’s funding offer from government has been raised from £39 million to over £70 million, and much of what we asked for in our lobbying and submissions has resulted in concessions being made.

IWA has lobbied hard for a sensible deal from government. The Defra consultation – A New Era for the Waterways – was issued in March 2011. IWA swiftly analysed these proposals and it was clear from the outset that the £39m per annum from Government wasn’t going to give the CRT a fighting chance. IWA came up with a package of measures for Government to consider and submitted these early so that Government and other waterways stakeholders could fully reflect on the IWA suggestions. IWA’s Preliminary Analysis was submitted in May last year. Elements that we believed should be incorporated into a sustainable funding package included for Government to:

  • Meet the past service pension liabilities of British Waterways.
  • Provide a transition fund both to cover the increased costs needed for a successful launch of the charity and the costs of promoting broad based local ownership of our waterways, including finance to pump prime locally determined projects. 
  • Index the indicative funding. 
  • Provide certainty of funding beyond 10 years.
  • Find funding for the cost of bridge repairs which have risen exponentially for British Waterways given the nature and axle weight of today’s commercial traffic, including the option of transferring responsibility for maintenance of road bridges to the relevant local highway authorities.

These representations were all included in the full IWA response to consultation, with the additional proposal that the liability for financing any duties to deliver environmental objectives beyond the scope of the CRT Trust Declaration and charitable purposes should fall to central government to fund.

In the autumn these representations were followed up by a well supported IWA members campaign, under which members wrote to their MPs raising key issues for them to take up with Richard Benyon. He received a pretty full mailbox. Centrally IWA made sure that big ticket funding issues were given a public airing – in Parliament through Parliamentary Questions and through the media – and these included pension liabilities, inadequate dredging, the deterioration in the waterways as a navigation, and British Waterways inability to fund properly bridge repair and maintenance. IWA also made representations on funding through the All Party Parliamentary Waterways Group hearings on British Waterways Funding, and had a private briefing with the Waterways Minister on our concerns.       

Moving forward, IWA will continue to remain vigilant. We need to ensure that any early teething problems are no more than that, and not symptoms of greater problems, and we will want to convey any issues of substance arising to Government before it conducts its 2 year review in 2014. We will also keep an eye on progress towards the absorption of the EA navigations in 2015/16 to ensure that no last minute hitches derail the transfer.

It is always possible to look for more – but in times of tight fiscal restraint – Seeing the original settlement be substantially increased together with retention of the full property portfolio of commercial premises and land has to be regarded as a relatively good deal.

We would like to thank all of our supporters who have played an important part in supporting this negotiation process, and we sincerely hope that all waterway supporters will now continue in supporting the CRT by providing volunteer support and assistance at local and national level, especially in the critical first three years before much of the additional funding kicks in.

See DEFRA funding notes