Inland Waterways - Political Update

Issue date: 7 July 2010

Policy being made by the new coalition Government which has direct or indirect implications for the inland waterways has been developing at such a pace that IWA has conducted an analysis of these developments, including the scope for waterways stakeholders to provide input to emerging policy.   

The Public Budget Deficit

The Conservative/Liberal Democrat coalition Government formed after the 6 May General Election has announced that it regards the most urgent issue it has to face is to reduce the public budget deficit.

It has already announced cuts for the current financial year (2010/11). On 24 May the Chancellor revealed that £6.2bn is to be cut from spending plans. Defra, which sponsors the British Waterways and Environment Agency navigations, is to contribute some £162 million this year. Other spending departments are suffering greater cuts but in percentage terms Defra is the third hardest hit, losing about 5.6% of current budget.

There was an Emergency Budget on 22 June. The full consequences for public expenditure by individual government departments and their sponsored bodies and agencies over this Parliament will not become clear until the outcome of the Spending Review, which will cover the years 2011/12-2014/15, is announced on 20 October. However, Defra reported to a meeting of the Inland Waterway Stakeholder Forum which was held on 30 June that on the basis of their current knowledge spending decisions for this current year are a £5.8 million cut for the Environment Agency and £1.5 million less for British Waterways. The intention is for the reduction in grant to impact upon revenue rather than capital expenditure. The target for spending reductions through to 2014/15 is 25% savings to be achieved.       

However, the situation appears to remain fluid with the media reporting that Departments are being asked to plan on the basis of both 25% and 40% cuts. The SOS campaign which was launched at the 2009 National Festival in response to the Labour Government’s cuts of 16.7% in funding for BW in 2010/11 will have raised the profile of waterway funding. So the Government will be looking at waterways funding in the full knowledge of IWA’s position as a national stakeholder.

Government Waterways Policy

Until recently the Government has had no publicly stated position on the waterways. There was a complete absence of waterways policy in the Conservative and Liberal Democrat manifestos before the election. Since the election, the coalition Government has published its policy agenda – The Coalition: Our Programme for Government (http://www.cabinetoffice.gov.uk/media/409088/pfg_coalition.pdf). This is no more revealing on specific waterways policy.

However, much of stated coalition Government policy within this document sits extremely well with the IWA proposals for the establishment of an Inland Waterways Conservancy. For example, the Programme for Government section on social action includes support for the creation and expansion of mutuals and charities; it also encourages volunteering. Extracts from this document include:  

·     We will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and enable these groups to have much greater involvement in the running of public services.

·     We will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services.

·     We will take a range of measures to encourage charitable giving and philanthropy.

·     We will introduce National Citizen Service. The initial flagship project will provide a programme for 16 year olds to give them a chance to develop the skills needed to be active and responsible citizens, mix with people from different backgrounds, and start getting involved in their communities.

·     We will use funds from dormant bank accounts to establish a ‘Big Society Bank’, which will provide new finance for neighbourhood groups, charities, social enterprises and other non-governmental bodies.

·     We will take a range of measures to encourage volunteering and involvement in social action, including launching a national day to celebrate and encourage social action, and make regular community service an element of civil service staff appraisals.

The Government has quickly developed its proposals for public expenditure. The Spending Review Framework, published on 8 June (http://www.hm-treasury.gov.uk/d/spending_review_framework_080610.pdf), details the process that Government will follow before concluding the review in the Autumn, and that demonstrates even greater potential for Government policy symmetry with an Inland Waterways Conservancy. The policies underlying the review are stated to include:

·         Protecting as far as possible spending that generates high economic returns.

·         New and radical approaches to public service provision.

·         Can activities be carried out by non-state providers.

·         Contracting out where assets do not need to be held in the public sector.

·         Funding allocations to be set on a longer term basis than the life of the Parliament to provide greater certainty to service providers.

·         When Government objectives depend on more than one department, departments to work closely to deliver in the most cost effective manner.

Specific waterways policy is also gradually emerging from Government. On 21 June Richard Benyon provided a written statement to Parliament which included:

“I am familiar with the public benefits the waterways provide and I am making this statement to set out how I intend to take forward inland waterways policy for England and Wales. The Government consider civil society has a very valuable role to play in delivering public services as part of our commitment to creating a big society. We will therefore be continuing to look in detail at whether a third sector model would be appropriate for British Waterways, including the possible inclusion of the Environment Agency's navigations as the other navigation authority grant aided by Government. My Department will be engaging a wide range of stakeholders in this work, and liaising with the Scottish Government. However I must make clear that, given the Government's overriding objective of reducing the financial deficit, no decisions on such a change will be taken until after the forthcoming spending review.”

Furthermore, in reply to questioning in June from MPs supportive of the inland waterways, in the context of the third sector and British Waterways property, he said:

“For the third sector model to work BW will have to have access to its estate, or a large proportion of it, for it to gear up funding for sustainable funding in the future.  ….it will not proceed unless [the estate] is [charity] locked in that way.” and;

“Treasury understands the need to provide BW with the endowment it needs to gear up for the necessary repairs and maintenance of canals”.

Stakeholder Representations

The Government has indicated formal opportunities for inland waterway stakeholder input. Defra is holding a workshop in July for stakeholders and and expects to consult. The Treasury itself has scheduled into its Spending Review programme “external engagement” during August.

It remains open to stakeholders to seek further avenues for policy input such as direct communication or through their representatives in Parliament.