Registered Charity No. 702429
Your chairman invited me to say a few words tonight about the new Canal & River Trust that is taking on from BW the role of caring for our waterways. He kindly wrote some words about me in the last magazine but let me re-iterate that I have a long waterways history. I’ve been an IWA member for 50 years – OK, I joined when very young! – was their General Secretary for 3 years in the 70s and was involved in many of the restorations of that time. I now own an old BCN tug which draws 3 ft so I know when the bottom is too close to the top. And I like the wildlife and flowers, the industrial buildings, the towns and villages – and the pubs! And I’ve been a member of this Trust for many years.
I am one of ten new Trustees of the new Trust. Others bring knowledge of running other large charities or large organisations. One runs English Heritage and another ran the Ramblers Association. We have civil engineering skills through a trustee who was the chief operating officer at Thames Water. Two of us are IWA members and two of us are boat owners and others have been on boats. The new Trust will be the 13th biggest UK charity. It will have about 1500 staff; have an endowment fund of about £450m and an income of about £150m a year. The actual transfer is still subject to what I hope will be formal Parliamentary approval which is expected later this month
In the past, BW management reported to the BW board which were responsible to a waterways minister in DEFRA. Sometimes the Minister was keen – as with the present minister - sometimes they were not. By and large, the Defra civil servants kept their heads down and pressed BW to cope with a lower grant.
In future, BW management will report to the Trustees. The Trustees are accountable to the national Council of some 35. We shall also have the Waterways Partnerships with about a dozen people in 13 areas. All these people are volunteers – the Trustees are not paid – and so they all care about the waterways. At present, 7 of the national Council are elected but we have said we want to work towards 50% being elected by groups large enough to have voters and 50% nominated by smaller interests. We’ve said we’ll review this in 3 years.
What happens to the Government grant? The Government offered a formal legally binding contract of £39m a year for 10 years and no protection against inflation. This wasn’t for boats but for the other benefits the waterways bring – the land drainage, public and health benefits from free towpath access on foot, tourism etc – you guys of all people know the benefits waterways bring to an area! The Trustees publicly said £39m wasn’t enough. Well, after a lot of amicable argy-bargy, the offer of £390m spread over 10 years became about £800m over15 years (including an assumed 2.5% inflation). Over the first 10 years, we’ve got about 33% more. We shall have some measure of protection against inflation. There will be a review after the first 10 years - by when the Trust should be well-established - as to whether the contract will be extended.
Is this enough?
Let’s put it into context. In the last published accounts, BW had about £147m income (ignoring ins and outs of third party works). This included about £100m of non-Government income, split roughly equally between boats, property rents and utilities (that’s rent from letting cable companies use the towpath and from water sales etc). We’ll start off with only £39m from Government – we get another £10m per annum in 3 years for the following 7 years – but the £8m gap will be met partly from various savings – such as £1m as charities don’t pay business rates and another £1m from moving the HQ to Milton Keynes when the Watford and Paddington leases expire later this year – but particularly from the outcome of the Wood Wharf property deal in Canary Wharf. BW bought the freehold some years ago and leased the site to a joint venture with the Canary Wharf property company. BW have now sold the joint venture interest and have got back the £50m they invested and have granted a 250 year ground lease to Canary Wharf Ltd which gets to £6m a year – quite a chunky amount.
So … is it enough? The Trustees reckon it’s enough for the Trust to be viable. But it’s not enough for the waterways to be in pristine condition – no one expected that. We shall still need the waterways to be enterprising in the way they generate income and we still need voluntary income and we shall still need voluntary help – not just physically but also in the offices etc.
The Trust will have an endowment fund – made up of the property and other investments. May I make one point clear? I was asked why the £50m back from the Wood Wharf deal couldn’t be used for maintenance. The reason is that good husbandry means there is an investment pot on the mantelpiece and a spending or maintenance pot. Income from the investment pot goes into the spending pot, along with boat and other income. The investment pot is not for spending – that way lies long term ruin as the rental income would reduce. That’s not to say none of the properties can be sold – they can be, but the sale proceeds are then invested in something else.
Overall, good news or bad news?
I reckon the new set up is good news – well, I would, wouldn’t I? So what are my reasons?
1. Freedom from Government grant cuts. We can - at last – plan long term, being pretty sure about our income over the next few years. Not so long ago, 55% come from unreliable Government grants The 15 year initial funding contract with government is the first time the waterways have ever had long term financial security. An example is that in the West Midlands there are plans to spend £1m on the Lapworth Flight in 2013-4 with a mass of works over the 20 locks.
2. Freedom from Government interference. Defra officials’ target has been to keep the Minister’s backside safe. So money has gone towards aqueducts and embankments and culverts and other things which cause trouble. Now the Trust can decide; that’s not to say aqueducts etc aren’t important – just that the Trust can look at things in the round.
3. More say for users. Via the national Council and the Waterway Partnerships, users can have more influence on what the Trust does
4. In future, all savings or extra income will be kept. In the last few years, that’s just resulted in a reduced Defra grant!
5. Ability to raise charitable money – not just from companies and charitable trusts but also from people. Did you know that earlier this month about 7,000 people queued to look at Bingley 5 Rise Locks in Yorkshire when they were drained for new gates? As did 2,000 at Worcester when Diglis Lock was drained for the first time in 20 years? People wanted to make donations – next year they will be able to! Now, it won’t be easy to raise money and we are only targeting £10m a year after 10 years. It’s been re-assuring for me to hear from my fellow Trustees involved with Oxfam and the WRVS that this is a cautious target.
On the other hand ...
No Government funds of last resort. I used to think this was important. But then someone pointed out that Government hasn’t helped with major breaches for years – if it came to it, it would have forced BW to sell off properties. And what do breaches cost? The recent ones on the Caldon and the Stourbridge were under £1m each. Even the Mon & Brec at c £8.5m was paid for out of current income – see it in the context of a £140m income. So whilst finding these funds from existing budgets is an uncomfortable mission for us, if it really came to it, well, a property could be sold off.
What’s been achieved?
It’s no part of my brief to defend BW – I want to look forward with the new Trust. But I can’t help noticing a few positive things about the past 10 years and yes, not everything else has gone right. The positives which hit me are the Droitwich restoration, Liverpool Link, Bow Back Rivers and the restoration of the historic Stourport basins at the junction between the Staffs & Worcester canal and the river Severn navigations. Some of these build on what volunteers have started. With the Droitwich, BW led the Partnership for the last phase costing about £10m, with some serious civil engineering including a brand new staircase flight. Millions of people use our towpaths, taking account of multiple visits – e.g. dog-walking – there were some 300 million visits last year In addition, boat numbers have increased by 10,000 to 35,000; non Government income has gone from £60m a year to £100m. The property investments were not sold off, despite great Treasury pressure. And instead of resignedly accepting Government cuts and opting to coast to retirement, management stuck out their necks and went for the Trust idea – even though they knew pay levels in the charity world were likely to be less!
Which brings me nicely to the controversial subject of pay levels! Lots of people tell me top management is paid too much. But when I ask how much they think top management is paid and what they think they should be paid, people get less vociferous! I began looking around and found a survey of charity CEO pay levels, ranging from £710k for Nuffield Health via £400k for Welcome Trust to under £50k Salvation Army. National Trust is £210-220k and Oxfam is £110-120k. Network Rail, by the way, is £560k. By comparison with all that, BW’s CEO last year was £234k. You won’t be surprised to hear that the Trustees have commissioned research on the right pay levels needed to attract and retain the right calibre staff. One of the big questions is what do you compare with? National Trust has old buildings but doesn’t have “nasty” water which can escape – with potential disastrous consequences. Network Rail has lots of civil engineering but again no “nasty” water. Oxfam has no similar infrastructure or commercial activities. Remember that the Trust will have £100m of non-Government income and needs to employ the right type of staff. All this is under discussion. Already our chair has said that performance related pay (bonuses) in the charitable sector are at lower levels than within BW and they are payable more by exception. Watch this space!
You’d expect me to say something about restoration. The new Trust is reviewing past BW policies in various areas and one is restoration. In asking the executives to submit proposals, the Trustees said that as we believe in the value of waterways, it follows that we believe in extending the network. The question is how and where.
My personal view is that restoring both the Lichfield and Hatherton is a no brainer. Both will help to revitalise the northern parts of the BCN and ease the movement of boats around one of the busiest part of the navigation network Did you know that 7,000 boats pass through Fradley each year? That makes it the second most popular spot after the top end of the Llangollen. Restoration is therefore an attractive proposition. It will help to improve and regenerate local communities as well as the areas through which the restored canals will pass.
As you know very well, it’s largely a question of money. How can it be raised? Dear old John Smith is no longer with us but we do have David Suchet. It seems to me that some of the buzz words with Government at present include creating employment, improving infrastructure and localism. I can fit canal restoration into that! I was with the Higher Avon Trust people a couple of weeks ago and had similar discussions. They emphasised the need to have everybody locally on board before seeking such funding. I know you here generally have local authority support and that you are trying to increase it. I suspect that the funding will come via local councils or the new Local Enterprise Partnerships (we’ve seen how the Chesterfield has recently got £2.4m for works at the Chesterfield Waterside development via the Sheffield City Region Local Enterprise Partnership (LEP) Growing Places Fund. This will take a largely vacant edge of town centre waterside site and create a vibrant new environment of buildings and open spaces. This will be home to a thriving new community of businesses and residents and will become a major attraction for visitors. Tony Harvey is the CRT’s local expert and may be able to help steer you in the right direction. Tony, by the way, has reminded me of the time he worked for the regional development agency when the M6 toll road builders finally relented about the new aqueduct. And if there’s anyone here in the audience who’d like to help, then I’m sure Brian and the Committee would be grateful.
So back the new Trust. Soon we shall be launching it officially. We shall be asking people to become Friends of the Trust – not just the usual waterway supporters but that mass of the public who enjoy the waterways but don’t pay. Did you know it’s estimated that nearly 11m people visited the English and Welsh waterways last year?
We shall continue the BW idea of asking for volunteers. Last financial year there were 39k volunteer days – up from 24k the year before. Some are in offices. Others help at locks. Some clear offside trees. Recently, people from the Derbyshire Wildlife Trusts laid coir roll bank protection on the Erewash Canal. And later this year the new Trust and WRG will be working to repair two accommodation bridges on the north Oxford.
I see great opportunities in the future – chances to get involved in how the waterways are run by joining in its governance; chances to volunteer; chances to become a financial supporter – by joining the Friends’ scheme. Great opportunities to work together for what brings us together – the waterways. Bickering over the right way to do things won’t disappear overnight but at least we have a common objective.
How have we together achieved this? Many in BW will point to BW’s efforts over the last 10 years or more – and they’d be right. But those same people pay tribute to what IWA and other societies did to get the nation to the stage that BW could itself change track. Thank goodness for enthusiasts – they don’t understand the meaning of “it can’t be done! “
Canal & River Trust
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