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THE Prime Minister has introduced a paper—'Putting the Frontline First: Smarter Government'. Contained within that paper were outline plans for British Waterways and its property portfolio.
Allan Richards asks 'How safe is the property?'
Putting the Frontline First
The three sentences which will dictate the future of British Waterways are as follows:
'The Government recognises that there may be benefits in considering alternative structures for BW's business as a whole, including its property portfolio. We will therefore consider alternative models for the business as a whole, such as mutual or third sector structures. As part of any such future structure for BW, therefore, there may be opportunities for the private sector to invest in the portfolio'.
At risk?
Was there really a risk of BW losing its portfolio in the 'Smarter Government' paper or the pre-budget speech? It would seem not.
Elsewhere in 'Putting the Frontline First' it states:
'We will develop criteria on social assets by 2010 Budget, to determine whether alternative delivery structures such as cooperatives or third sector entities would offer the greatest value for public assets'.
This would imply that the property portfolio would only be lost in a move to the third sector announced in the Budget or later.
New funding model
Currently, Government provides grant funding to some third sector organisations in a similar fashion to that provided to BW. However, 'Putting the Frontline First' suggests that Government grant may be may be replaced by a pilot scheme of Social Impact Bonds as a new way of funding the third sector to provide services.
Social Impact Bonds offer third sector organisations the opportunity to attract finance for projects backed by the promise of a Government payout to bond holders based on the success of the project.
Also a Social Investment Wholesale Bank will be created, providing capital to organisations delivering social impact and ensuring the long-term sustainability of social enterprises.
There is no mention in the document of providing funding to the third sector via property dowries.
Fat Cats
The Taxpayers Alliance has very recently published its yearly rich list showing that 806 people in the public sector now earn more than £150,000 and again the media is picking up the story that four of BW's executives earn more than the prime minister.
Gordon Brown, perhaps noting that he is 324th on the list, has admitted there is a 'culture of excess' in the public sector, and promised to curb the salaries paid to civil servants, quango chiefs, council leaders and BBC executives. This follows similar pledges from both the Conservatives and the Lib Dems. Whilst this may be copycat rhetoric, it is easy to see a move to the third sector without a property dowry as a means of bringing salaries under control.
Safe?
It is fairly obvious on reading the whole document that, whilst government will give active consideration to moving BW towards 'third sector', it does not currently view a property dowry as a means of funding. It may also use the move as a means of getting runaway salaries under control. A Conservative government would probably act no differently.
It looks as if the property is not safe in the medium term but does that matter to anyone except BW directors? The future of our waterways depends on good governance and adequate funding. It is as simple as that! If a 'third sector' BW is able to deliver on both counts then the sooner it is implemented the better.
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