Has CaRT’s government bid for £220m extra funding failed?

iN ANSWER to the question ‘Where is that £800,000,000 coming from?’, CaRT hopes that £220m will come from additional government funding over the next five years.

The money will be used to supplement the £250m that it will receive under the grant agreement administered by Defra with the major portion being spent discharging CaRT’s statutory duties as a navigation authority rather than its other charitable objectives.

In a narrowboatworld exclusive, Allan Richards provides details of the funding bid.

£50m per annum is not enough

Following Toddbrook, CaRT’s trustees are now aware that its critical infrastructure is failing through lack of maintenance. Its £50 million a year grant from Defra is insufficient and it is suffering falling revenue from investments. The response has been to quietly bypass Defra and apply direct to the Treasury for an 88% uplift in funding over the next five years.

This comes less than a year after Chief Executive, Richard Parry, claimed that the Trust had sufficient funds to maintain its reservoirs and other high risk assets in a safe condition.

The initial pitch

In early June 2020 CaRT Chairman, Allan Leighton, and Chief Executive, Richard Parry, wrote to the Chief Secretary to the Treasury, Steve Barclay MP, with a funding proposal (called a ‘pitch letter’ by the Trust). The objective was to gain treasury agreement to significant extra funding over a five year period. This would be in addition to its annual Defra grant (currently £52m per year but set to decrease).

The pitch letter set out a proposition for a £200m programme of capital projects over five years. The letter claimed that many of the projects were aligned to 'key government policy agendas' with some shovel-ready (i.e. ready to start immediately).

The chase-up

On the 24th August, Allan Leighton wrote again expanding on the proposals and increasing the amount requested.  The initial pitch of £200m was revised upwards to £255m with CaRT saying that it would contribute £35m to that amount.

The letter told that CaRT were already in discussion with Department of Transport regarding £45m for (yes, you have already guessed!) towpath improvements.

In addition to this £45m, CaRT requested a further £40m for three classes of ‘green recovery schemes’.

• renewable energy schemes
• freight schemes
• biodiversity and natural infrastructure schemes

That’s £95m so far!

Critical infrastructure

However, the main thrust of the second letter was to expand on funding required for a substantial £160m ‘critical waterways infrastructure resilience programme’.  The suggestion was that the Treasury contribute £125m over the five year timescale with CaRT providing a further £35m to:

• Reduce public safety risks at CaRT’s 72 reservoirs
• Repair critical high risk embankments and cuttings
• Refurbish culverts
• Repair other critical assets such as aqueducts and tunnels.

So £255m over five years with government contributing £220m and CaRT £35m

Defra

CaRT has kept everyone in the dark regarding the pitch to the Treasury.  It does not appear to have thought it necessary to tell its council either.  Furthermore, it has not told Defra about the ‘critical waterways infrastructure resilience programme’.

Under its grant agreement with Defra, CaRT has to provide figures showing what percentage of principal assets fall within the two worst condition classes (D—poor and E—bad). In eight years, CaRT has produced figures showing that it has reduced the percentage of principal assets in poor or bad condition by 25% . Over the same time frame it figures show it has halved the number of high-risk culverts and embankments in poor or bad condition.

Perhaps, its Trustees are concerned about the fallout should Defra start wondering why CaRT’s figures show the condition of critical assets are improving but at the same time is asking for additional grant to make them more resilient to failure.

Perhaps it is because CaRT do not want to appear as having failed dismally.  It is an agreed objective under the grant agreement that government funding for CaRT will reduce or cease by 2027.

A review to determine post 2027 funding is currently underway with Defra shopping for consultants to investigate the Trust.

So has the bid failed?

The status of the bid is not known.  However, it has been six months since the initial approach to the Treasury.  Perhaps the bid has been rejected.  Alternatively, consideration might have been delayed due the ongoing coronavirus situation.

What is known is that a couple of days back CaRT announced that it was spending £5m rebuilding the spillway of Harthill Reservoir (the spillway is understood to be one of several with a flawed design similar to Toddbrook).  Almost certainly this project was included as ‘shovel ready’ in CaRT’s ‘critical waterways infrastructure resilience programme’ bid. However, in CaRT’s announcement there was no mention of government funding.

If the £220m is not provided by government, will CaRT be forced to start selling off its non-operational assets to maintain its operational ones?

Further reading: Second letter to the Treasury