The Future of the Environment Agency's Navigations

Issue date: 3rd July 2013

The announcement of the Government's Comprehensive Spending Review during the last week of June brings about an even more challenging climate to progress IWA's aspiration of the Environment Agency's navigations to be transferred to management by Canal & River Trust, as the next step to achieve Aickmans's visionary National Waterways Conservancy.  Most government departments saw cuts to their budgets with the Department for Environment Food & Rural Affairs having to take a 10% cut. Support for the Environment Agency swallows about one third of Defra's budget, and discretionary spend on areas such as navigation are therefore particularly susceptible to grant cuts. The future for the Agency's navigations is therefore particular bleak if the promised transfer to Canal & River Trust fails to materialise.

On 28th June, Government announced the outcome of its triennial reviews of the Environment Agency and Natural England, and has decided not to merge the two bodies.  The report says, however, that further economies and efficiencies for both bodies are essential.  The Review states that an initial assessment found no need for navigation to remain under the control of a non-departmental public body, such as the Environment Agency, but as the proposed transfer arrangements are being reviewed separately by Defra it looked at the matter no further, but said that further announcements would be made shortly.  The full Review report is available on theGovernment website

As part of the Comprehensive Spending Review announcements, the Government also announced that English Heritage was to be split into two separate bodies. The part that undertakes regulatory activity and provides advice on historic structures and archaeological matters will remain in public ownership, but under a new name (the current working name is 'National Heritage Protection Service', but something more user-friendly is to be sought).  The part that looks after 420 historic properties is to transferred to the charitable sector under arrangements that appear to be almost identical to Canal & River Trust.  A new charity is to be set up, which will take on the name 'English Heritage' and inherit the current English Heritage's 'membership' arrangements and initially be funded with an £80 million grant over a period - but after that, there is likely to be no more government money. The properties will stay under public ownership, as is the case for the former British Waterways canals and rivers, but management of them will be vested in the new charity. The copying of the Canal & River Trust arrangements for English Heritage may give some indication of Government's view of the success of the new CRT, and therefore its suitability to manage the Environment Agency's navigations too.  There is further information on theEnglish Heritage website.

Key points of IWA's lobby for the Agency's navigations to be transferred to Canal & River Trust are:

  • IWA strongly supported the formation of the Canal and River Trust (CRT) as it opened up new sources of income and provides greater financial flexibility and stability.
  • The financial deal to set up CRT was very good given the financial climate and better than other areas of the public sector. Furthermore it is insulated CRT from further government cuts.
  • The government has indicated that it wishes to see EA navigations transferred to CRT in 2015 subject to affordability and agreement of CRT Trustees. IWA strongly supports such a transfer.
  • EA navigations are heavily dependent upon government subsidy with 65% of income coming from government grant and 35% from boaters. The level of grant is under pressure and may well reduce further. If new income streams are not found boaters will have to pay much more.
  • Inclusion of EA navigations in CRT will provide a more secure future for them and potentially open up new sources of income. This together with the economy of scale could protect the boaters' pocket.

It was as long ago as the mid 1950s that IWA co-founder Robert Aickman argued that the inland waterways should be managed as a conservancy outside of direct government control. This was a time of great decline and waterway closures as the freight role of most waterways disappeared. However Aickman was a visionary and he recognised the leisure potential of the green corridors running across the country. Largely due to IWA campaigns the closure programme was halted by the end of the 1960s and growth in leisure use resulted in a renaissance of our waterways. However most waterways remained under government control and funding was always a hand to mouth affair, for example in the early 1980s Blisworth tunnel had to be closed for over four years as there was not enough money to repair it. More recently breaches on the Brecon & Abergavenny Canal resulted in British Waterways (BW) leaving the Cotswold Canals restoration project. Even before the recent financial crises there was a steady drop in government funding of waterways, but the recent austerity era has not just introduced cuts but has led government to question how much the taxpayer should subsidise leisure pursuits. IWA will continue to argue that some government funding is necessary given the wider benefits waterways bring to communities but the Association realised that a new model was necessary. 

IWA strongly supported the formation of Canal & River Trust (CRT) a year ago. Handing over the former BW waterways to a specially created charity is a first step towards realising the Aickman vision. The lucrative investment property portfolio has been locked into the charity and the 15-year financial settlement with government is generous compared with what has happened elsewhere in the public sector. More importantly it provides a known and secure income from government whilst CRT looks to develop new sources of income. Had BW still been in existence the latest austerity round would have certainly led to more cuts.

Where does this leave the Environment Agency's (EA) navigations? Although they remained outside the formation of CRT the government has made it clear that it wishes them to be transferred in 2015 subject to affordability and the agreement of CRT trustees. IWA strongly supports such a transfer. EA navigations are in a generally good condition resulting from investment over many years; this is particularly true of the Thames but less so in East Anglia. However, the long term sustainability is precarious as they are even more dependent upon government grants than BW was. 65% comes from the taxpayer and only 35% from boaters, even worse there are currently no other sources of significant income. If nothing changes then the inevitable fall off in government grant will have to be met by further cuts in running costs (and hence service standards) together with higher than inflation licence/registration charges. The EA knows that it has to find new sources of income but there are limits of what a government body can achieve. By joining the CRT EA navigations will benefit from economy of scale with a large marketing organisation geared towards raising money including that from the charitable sector. The Thames in particular is a very lucrative waterway corridor where the potential for charitable fundraising is huge. Inclusion of EA navigations in CRT will move much closer to full realisation of the Aickman vision.

The government review of whether to push for a transfer of EA navigations is about to get underway. Money is very tight to enable a dowry that will satisfy the CRT trustees and there may have to be consideration of innovative financial solutions. IWA will give every support and encouragement to government and CRT and it will be a major campaigning activity.

Defra also asked the Environment Agency to look at alternative arrangements for its three ports (Rye Harbour, Dee Conservancy and Lydney Harbour), which would not be transfered to Canal & River Trust, over a year ago.  The first two are understood to be commercially viable and may be sold off, but Lydney Harbour may be transferred to a not-for-profit body for £1 along with a dowry.  Proposals are with the Agency's board for consideration, and are likely to become public knowledge shortly now that the future of the Agency is more settled.  The Agency is still awaiting the outcome of a Harbour Revision Order for the Dee, to modernise its powers, which has been under consideration by Government since 2005.